Stocks performing well

THE country’s banking and financial sector stocks have performed well through the year and is likely to continue through to next year, according to Kina Bank funds management’s market review for the third quarter.
According to the report released on Friday, Kina noted that the company anticipated a boost to the mineral and mining sector stocks in the fourth quarter as the Government was likely to give the all-clear to two major resource projects.
The Government’s fiscal position will accelerate borrowing in the fourth quarter, the bank said.
However, Kina anticipated that this would be done primarily through treasury bill issuances in the domestic market.
Bank of Papua New Guinea (BPNG) has slightly devalued the PNG kina by 0.17 per cent over the third quarter.
Through the course of the year, the kina was devalued by US$0.003 (K0.0099).
BPNG has also reinstated foreign exchange (FX) rationing as a US$500 million (K1.65billion) boost to the country’s FX reserves from the Sovereign Bond was fully utilised.
Treasury had reported higher taxation revenue from import duties and company taxes over the first half of the year.
This came as companies were able to greater satisfy their import requirements, as well as being able to declare and repatriate profits overseas.
According to the September Monetary Policy statement (MPS), BPNG had foreign reserves amounting to US$2.046 (K7.069) billion on June 30.
This is sufficient for 5.3 months’ total import cover and 11.3 months non-mineral import cover.
The tightening of FX controls continues to dampen an already-slowing domestic economy.
In the MPS, BPNG also anticipates the receipt of the proceeds of foreign loans to aid the country’s FX position, however the drawdown of these loans are yet to occur.
BPNG continues to urge Government to secure more foreign currency inflows from mining projects through provisions in the Project Development Agreements that allow for a portion of mining revenue to be kept on shore to assist with the economy’s FX requirements.