Listing on PNGX gives investors ability to share wealth: Official

The National Business

By DALE LUMA
A LISTING on the Papua New Guinea Stock Exchange (PNGX) gives Papua New Guinean investors the ability to directly share in the wealth generation of local industries, chairman David Lawrence says.
Lawrence said when responding to queries from The National that it also simultaneously supports the development of robust national savings and investment that underpinned the development of the nation’s capital markets.
Commenting on Australian energy company Santos’ listing on the PNGX this week, Lawrence said a public company with significant activities in an emerging country such as PNG demonstrated its commitment to development in that country by listing on its stock exchange.
“It sends a strong signal of support for the emerging local capital market,”he said.
“It signals a clear, long-term commitment to the country.”
Lawrence said the Papua New Guineans could participate in the large scale commercial activities and wealth of the country in two ways:

  • INDIRECTLY via Government or State-owned enterprise (SOE) ownership of stakes in, or participation in royalty streams from, commercial activities; or,
  • DIRECTLY via purchase of shares in the companies which engaged in the commercial activities.

“Papua New Guineans should have a readily accessible opportunity to invest in the wealth of the country,” he said.
“There are a number of companies listed on stock markets in the region and which have major, if not all, their activities in PNG.
“By not listing in PNG they make it difficult for PNG investors to invest in their country,” Lawrence said.
“In a country which is increasingly sensitive about offshore ownership, this is important.
“Most of these types of companies are currently in the extractive industries (oil, gas and minerals).”
Lawrence said there was increasing retail investor interest in PNG for investing in quality companies, whether domestic or foreign.
“There are stockbrokers in PNG who would be willing to assist the companies and to increase the number of PNG shareholders.
“We are hopeful of more listings in 2022.
“We have had a number of discussions with potential new listings.
“In general, the more companies that list on the market, the more that tends to attract further listings,” he said.
Lawrence said companies listed on stock markets in the region and which had major activities in PNG could support the country by listing on PNGX and build the market to a “critical mass” size to attract more domestic listings.
“If they build a local investor base by issuing shares to local investors that starts building liquidity in the market, which also attracts further listings,” he said.
“Those foreign companies are familiar with the requirements of being listed and can give local companies the confidence to come to the market.”