Following the successful launch of Papua New Guinea’s first sovereign bond, the International Finance Corporation is intending to issue a AAA bond as part of its efforts to deepen the financial markets in Papua New Guinea. John Vivian, IFC’s Resident Representative for Papua New Guinea, tells Business Advantage PNG that it can also assist corporate funding.
The US$500 million sovereign bond raising will improve foreign exchange cash flows, according to Robin Fleming, Chief Executive of Bank South Pacific. He tells Business Advantage PNG that it represents an ‘important milestone’ for Papua New Guinea’s financial system.
The success of Papua New Guinea’s first US$500 million bond issue will depend on the government’s spending focus, according to Paul Barker, Director of PNG’s economics research think tank, the Institute of National Affairs. He tells Business Advantage PNG that the private sector has to get access to foreign exchange because of extended delays.
The Papua New Guinea government has begun spruiking its sovereign bond issue with a series of meetings with investors in Singapore, Hong Kong, London and the US, led by Treasurer Charles Abel. However, while Standard and Poor’s has given the issue a ‘B’ stable rating, others say the government may have to offer a premium to attract investors.
LNG prices have jumped sharply and the cocoa price has been volatile. Business Advantage PNG’s monthly review of Papua New Guinea commodity and financial markets.
How do Papua New Guinea’s two largest super funds, Nambawan Super and NASFUND, make investment decisions on behalf of their members? Two senior executives provide their investment guidelines, which have led both funds to perform well in difficult economic conditions.
Copper has weakened, but oil and gas prices are showing strength. Business Advantage PNG’s monthly review of Papua New Guinea commodities and financial markets.
The Governor of the Bank of Papua New Guinea, Loi Bakani, has told an APEC conference on improving financial literacy that the use of mobile phones for financial services is increasing sharply. But he said there is a need to strengthen consumer digital financial literacy and awareness in the country.
ANZ Bank and Kina Bank have announced they have entered into an agreement for ANZ to sell its retail and commercial/small-to-medium-sized enterprise (SME) banking businesses to Kina for K24.2 million. Both banks claim the move is in line with their strategies.
Offshore investment by Papua New Guinea companies remains comparatively small, but there are opportunities. One banking executive suggests it as an important way local financial institutions can diversify.