The big mover this month was palm oil, which was up 20.5 per cent for the month, as reported by Kina Securities. Oil prices have continued to hold up but LNG prices have eased. Business Advantage PNG’s monthly overview of commodity and financial markets.

An LNG ship.

Liquefied natural gas (LNG) prices have eased over the last month, falling by 7.1 per cent, according to Kina Securities. Japan/Korea LNG prices are US$5.56 per million British Thermal Units (BTU), 19.8 per cent below the level of a year ago. The recent weakness is being blamed on the end of the Northern winter.

By contrast, oil prices are showing signs of strength, a positive for the global majors. West Texas Intermediate is trading at US$48.10 a barrel, according to Kina Securities. This is up 12.1 per cent for the month and up 31.2 per cent for the year.

There are reports that top OPEC exporter Saudi Arabia’s crude oil shipments fell in December, which has increased investor optimism. But this has been tempered by rising output from the United States.

Metals and agriculture

Gold rose slightly 1.3 per cent over the month to US$1346.10 an ounce. The precious metal is up by 26.8 per cent for the year. Silver prices fell by 3.1 per cent for the month to US$19.07 an ounce, but the price is up 36.9 per cent for the year.

The copper price is down 4.5 per cent over the month, according to Kina, but only down 0.9 per cent for the year.

The 1 year palm oil price. Source: Index Mundi

‘Both PNG indexes have done better than the Australian bourse.’

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Palm oil has surged, according to Kina. Malaysian palm oil prices are up 20.5 per cent over the month and 22.6 per cent for the year. There are reports that poor weather in the main production regions of Southeast Asia has slashed output, affecting the supply/demand situation.

Cocoa prices rose 6.6 per cent over the month but they are still down 5.9 per cent for the year. Coffee prices continue to be strong. They are up 2.6 per cent for the month and 17.5 per cent for the year.

Equities

The KSi Home Index (stocks listed only in PNG) is up 3.8 per cent for the month and 6.2 per cent for the year. However, the KSi index (which includes dual listed stocks) is up 40.4 per cent for the year. Both PNG indexes have done better than the Australian bourse. The All Ordinaries Index is up only 4.5 per cent for the year.

A standout stock for the month was Bank South Pacific, whose share price rose 4.5 per cent over the month and is up 15.2 per cent for the year, according to Kina. Newcrest Mining shares were up 2.2 per cent over the month and are up 76.9 per cent over the year.

Half year Treasury Bills are trading at 4.72 per cent, while full year Bills are trading at 7.69 per cent. Kina reports inscribed stock for 2019-2021 has an interest yield of 10.95 per cent.