Lack of laws affecting market

By CLARISSA MOI
THE lack of appropriate regulations supporting the Capital Market Act 2015 has prevented the development of the country’s debt market for trading, according to the Papua New Guinea National Stock Exchange (PNGX).
Chairman David Lawrence told The National that last July, the PNGX had released draft rules for a proposed new PNG debt market.
“PNGX is proposing to establish a new debt market for trading of Government and private sector debt securities which will operate alongside the existing PNGX equity market,” Lawrence said.
“PNGX has continued working with Treasury, Bank of PNG and the International Finance Corporation (IFC) on the establishment of debt securities market for Papua New Guinea.
“While rules for the market were finalised in 2019, the ongoing lack of appropriate regulations supporting the Capital Market Act 2015 has prevented the market’s commencement.”
Lawrence noted that following the announcement by the Commerce and Industry Minister William Duma on Oct 30 of the reform of the PNG Securities Commission and the international search for a new chairman, PNGX was hopeful that the proposed market could be launched in the first half of 2021.
“In addition to the debt market, PNGX is hoping to further develop the equities market and grow participation in it,” he said.
“We are presently rewriting our listing rules and business rules to modernise them and encourage more listings and traders into the market.
“We are also working with the small medium enterprises (SMEs) sector to explore new avenues for training entrepreneurs and assisting them to raise capital.
“While PNGX is itself a small business, it is also a key part of the financial infrastructure of Papua New Guinea.
“It is important to the development of the PNGX market that PNG has a strong and vibrant SME sector and we wish to promote that while also recognising that it is a higher risk sector for investors than the market for larger companies.”