Double-digit returns for asset management firm

THE year 2023 was a positive one for Kina Asset Management (KSM) with the company delivering a creditable full year financial performance bolstered by stronger global markets.
According to a market release, global equity markets ended 2023 on a high note, with many international benchmarks delivering strong double-digit returns.
This strong performance was led by a cooling off in global inflation fears and higher expectations of rate cuts by the United States Federal Reserve and other central banks.
“Given the diversity of its portfolio, the company achieved a net profit after tax of K12.7 million for the full year ending Dec 31, 2023,” the statement said. “A key driver of the result was a strong investment return of 18.6 per cent for the full year.
“The fund’s net assets stood at about K81.8 million as at Dec 31, 2023, compared with K74.2 million as at Dec 31, 2022, an increase of 10.2 per cent.
“Net tangible asset backing per share as at Dec 31, 2023 was K1.61 (2022: K1.49), after payment of a dividend of K0.12 per share to shareholders in October.
“This represented an 8.1 per cent increase over the year.”
According to the statement, the performance in 2023 highlighted the prudence and robustness of the fund’s strategic investment approach, which continues to focus on diversification and long-term holdings in leading Papua New Guinea and Australian companies in addition to international funds.
The strategy provides a buffer from any impacts of the local PNG economic cycle on the fund’s earnings and also provides greater industry sector diversity and access to asset classes other than those available in the home market.
The key components of the result included the company’s international funds, the BlackRock iShares, and Vanguard International Shares were the best performers in 2023, with returns of +31.1 per cent and +31.2 per cent respectively.
The fund’s Australian equities also performed strongly in 2023, despite economic conditions moderating under the weight of rising interest rates.
The best performers (in PNG Kina adjusted terms) were Suncorp (+27.4 per cent) and ANZ (+24.6 per cent).
The fund’s cornerstone position in Bank South Pacific Financial Group Limited (BSP) maintained its position as the largest contributor to the company’s return.
The company’s PNGX-listed BSP shares rose 10.4 per cent from K12.41 to K13.70 at Dec 31, 2023, and total returns were boosted by dividends of K1.77 per share (14.3 per cent).
The company’s Australian Stock Exchange-listed BSP shares rose from A$4.90 (about K12.57) to A$5.42 (about K13.90) at Dec 31, 2023, a return of 18 per cent, inclusive of currency gains from appreciation of the Australian dollar.