PNGX Group’s Chairman on acquisition plans, capital market reforms and regional partnerships
David Lawrence is chairman of PNGX Group, the owner and operator of Papua New Guinea’s national stock exchange, PNGX. In this interview with Business Advantage PNG, he expands on the proposed acquisition of PNG Registries, potential government reforms, and opportunities to collaborate with Fiji’s SPX.
PNGX is looking for greater synergies with Fiji’s SPX. Credit: Torsten Asmus
Q
Pacific Lime and Cement listed on PNGX just before Christmas - the first listing in some time. What listing activity do you anticipate over the coming 12 months?
A
The market is awaiting the previously announced listing of Pacific Balanced Fund.
We are currently in discussions with more companies listed in offshore markets which have significant operations in PNG and which see the value in listing as part of the social and political licence to operate in the country.
We are anticipating at least one corporate bond this year and have hopes of also attracting our first green bond to the market.
Attracting other forms of investment vehicles will depend upon further tax reform to remove existing barriers and provide incentives. We are also encouraged by recent comments made by Richard Maru, Minister for International Trade and Investment, regarding the potential listing of selected quality state-owned enterprises.
“We see this year as a year for re-investment into the stock exchange and to set the platform for greater local ownership of PNGX later this decade.”
Q
The process of reforming PNG's capital markets is ongoing. What are you own hopes and expectations for the coming year?
A
As Minister Richard Maru has stated, we would be hoping for an improved tax environment including:
- pass-through tax relief for trusts, which would encourage the listing of Real Estate Investment Trusts and other forms of collective investment vehicles;
- tax incentives for listing to shift the reliance on debt financing and encourage companies to come to the public market; and
- more progress on the full or partial listing of quality SOEs.
From a market operator perspective, we see this year as a year for re-investment into the stock exchange and to set the platform for greater local ownership of PNGX later this decade.
Q
Pacific Capital Markets Development, the majority owner in PNGX, now has a minority stake in Fiji's SPX. What do you see as the potential synergies between the two Pacific exchanges?
A
There are a range of potential synergies. Technology infrastructure is a major synergy. Technology infrastructure is the largest operating cost of both exchanges. We are exploring opportunities to operate both markets, both pre- and post-trade, on the same shared operating platform to make the exchanges more sustainable. This opens opportunities for greater visibility of the PNG market in Fiji and visa-versa.
Another is dual listings: a significant number of PNG companies have (or want) operations in Fiji and, likewise, a significant number of Fijian companies have (or want) operations in PNG. Think BSP, City Pharmacy, Credit Corp, Amalgamated Telecom.
Operating efficient markets is all about scale. Working to create a regional market allows economies of scale to flow to both the Fijian and PNG economies. This then allows further investment in market infrastructure and new products and services to further develop the markets.
Q
PNGX Group is proposing to acquire the PNG Registries business from MUFG Corporate Markets (AU) Limited, subject to regulatory clearances. What is the strategy underpinning this acquisition?
A
PNGX’s David Lawrence
For an exchange in an emerging market, acquiring a share registry is not about scale for its own sake. It represents a deliberate move to anchor market infrastructure locally. It is critical to the successful implementation of a local Central Securities Depository (CSD).
A CSD relies on trusted registries to support dematerialisation, settlement finality and automated corporate actions. By integrating one credible domestic registry into its infrastructure, an exchange can accelerate the transition to modern post-trade processes.
The strategic value extends well beyond resilience. An integrated registry and CSD enable new services – including streamlined issuer and investor services – that directly support liquidity.
In markets competing for capital, this combination strengthens sovereignty, enhances investor confidence and creates the conditions for deeper, more sustainable trading activity, even in the shadow of global competitors. It also represents an opportunity for PNGX to invest in the development of the domestic registry sector, a sector which has been under-invested in for over 20 years.
