The 30 per cent jump in the value of Kina Securities when it listed jointly on the Australian Securities Exchange and the Port Moresby Stock Exchange last Thursday ‘exceeded our expectations’, Chief Executive Officer Syd Yates tells Business Advantage PNG.

KSL’s debut on the ASX. Credit: Bloomberg

Shares in the company closed at A$1.30 (K2.60) a share on debut, A30¢ (60 toea) higher than its A$1 (K2.08) offer price. Its market value was A$212.9 million (K429.4) at the close of trade on the first day. Kina Securities has also become the 22nd listing on POMSoX.

‘The success of the launch reflects confidence in Papua New Guinea by international investors and in Kina Securities,’ CEO Syd Yates told Business Advantage PNG.

‘Investors have had an opportunity to look in-depth at PNG’s growth prospects. We’ve had many years of growth and are highly ranked for that to continue over the next few years.

‘And, when compared with similar organisations through out the region, Kina Securities was seen as very competitive,’ he said.

‘We have a good yield, the PNG banking sector is well regulated and we had a very good stable of advisors assisting us.’

Yates said he didn’t really have a launch price expectation, so it was ‘quite a surprise’ to see the initial closing price at A$1.30 (K2.60). Since then, he adds, the volumes of sales on the ASX have been ‘very good’.

Syd Yates (centre) with Kina Securities staff. Credit: Kina Securities

Quality investors

Rob Douglas, Director of Equity Capital Markets at Morgans Financial Ltd, which oversaw and underwrote the float, says he was pleasantly surprised by the quality of PNG and international retail and institutional investors.

There were 35 institutional investors from Hong Kong, Malaysia, New Zealand and Australia, he told Business Advantage PNG.

The float has raised A$97 million (K195 million), of which about A$77m (K155m) will go towards the purchase the PNG assets of Malaysian financial company, the Maybank Group, and to cover the costs of listing.

Maybank purchase imminent

The Maybank purchase is due for completion on the last day of August.

‘My next focus is to ensure the acquisition of Maybank and to integrate it with Kina, and deliver on what we said we would do,’ Yates said.

The purchase of Maybank will allow Kina to have a full banking licence.

‘We will have access to wholesale money at a lower cost and be able to pass those benefits on to our customers,’ he said.

‘We see the strong growth trend continuing for banking and financial services, particularly given the sector’s exposure to multinational corporates, the growth in small-to-medium enterprises, and the country’s growing middle class,’ he said.

About A$22 million from the July raising will go to the company’s largest shareholder, Hong Kong-based investment company Fu Shan, in a partial sell-down.