Palm oil was the biggest mover in the month, while gold, coffee and oil prices remain strong. Gas prices, however, continue to be weak and in the currency markets, the kina continues its slide against the yen. Business Advantage PNG’s monthly overview of commodity and financial markets.

Demand trends in Asia for LNG Source: US Energy Information Administration

Oil prices continue on their upward path. According to Kina Funds Management, West Texas Intermediate, which is trading at US$48.10 per barrel, is up 12.1 per cent for the month and 31.2 per cent for the year. Brent Crude, which is trading at US$49.96 per barrel, is up 11.3 per cent for the month and 36.5 per cent for the year.

LNG prices continue to slide, however, on the back of weakening demand in Japan (see graph above). Japan/Korea LNG prices are US$5.56 per million British Thermal Units (BTU), down 7.1 per cent for the month and 19.8 per cent for the year, according to Kina.

The copper price has been weak.

Energy Voice is reporting that ExxonMobil is looking to agree sales contracts for spot cargoes to soak up excess production from its liquefied natural gas project in PNG.

Minerals

The five year gold price. Source: Infomine

Gold appears to have established a temporary ceiling at US$1346.10 per ounce. It is up only 1.3 per cent for the month but has risen 26.8 per cent for the year. Continuing uncertainty in the global financial markets seems likely to maintain the upward price pressure.

The copper price has been weak. It is trading at US$2.13 per pound, according to Kina Funds Management, which is down 4.5 per cent for the month. Over the year, however, the copper price has been stable. It is down just 0.9 per cent for the year.

‘Palm oil prices have surged. They are up 20.5 per cent for the month.’

Silver prices have been volatile. The precious metal is trading at US$19.07 per ounce, which is down 3.1 per cent for the month. However, it is coming off a strong surge: the price is up 36.9 per cent for the year.

Agricultural commodities

Palm oil prices have surged. They are up 20.5 per cent for the month, and 22.6 per cent for the year.

In other good news for PNG’s farmers, coffee prices are up 2.6 per cent for the month and 17.5 per cent for the year.

‘There continues to be a disparity between PNG companies only listed on the Port Moresby Stock Exchange (POMSoX) and PNG stocks listed in more than one domicile.’

Cocoa prices are also showing signs of recovering. They are up 6.6 per cent for the month. Over the year, however, they are still down 5.9 per cent.

Equities

There continues to be a disparity between PNG companies only listed on the Port Moresby Stock Exchange (POMSoX) and PNG stocks listed in more than one domicile.

The KSI Home Index (stocks listed only in PNG) outperformed the dual listed stocks over the month, rising by 3.8 per cent in the month, compared with the KSI Indexes (dual listed stocks) rise of only 2.1 per cent.

‘Bank South Pacific shares continue to rise.’

Over the year, however, the KSI Index (made up of dual-listed stocks) continues to outperform, rising by 40.4 per cent compared with 6.2 per cent for the PNG stocks listed only on POMSoX.

Bank South Pacific shares continue to rise. They were up 4.5 per cent for the month and 15.2 per cent for the year. Credit Corporation shares moved sideways, but are still down 25.3 per cent for the year. Oil Search shares rose 2 per cent in the month and are up 24.5 per cent for the year.

Bonds and currencies

With bonds, six month Treasury Bills are unchanged at 4.72 per cent, while full-year Bills are slightly up at 7.69 per cent.

On the currency markets, the biggest move was in the kina-yen cross rate. The kina was down 4.2 per cent against the yen for the month and is down 21.2 per cent for the year. Japan is now PNG’s largest trading partner.