Kina Securities Ipo

Also received some info on this one from Morgans.

Kina Group set for listing in Australia

• by: Rowan Callick
• From: The Australian
• June 08, 2015 12:00AM

Papua New Guinea is on the verge of its first non-resource listing in Australia since the heydays of the Pacific trading conglomerates including Burns Philp and Carpenters many decades ago.

It is significant for the reshaping of prospects for the country — whose population will overtake that of Australia some time in the middle of this century — that the company involved is diverse finance house Kina Group.
Building a vibrant and dependable finance sector is a crucial step towards more diverse growth.

Earlier this year another PNG finance company shifted up a gear, with Port Moresby-based South Pacific Bank taking over some of Westpac’s islands operations, catapulting it into the major competitor in that region to ANZ.

Syd Yates is an Australian who has played a crucial role in Kina’s growth — a corporate player capable of rising above the immense day-to-day challenges that can limit ambitions in PNG, to retain a vision for growth as well as managing those mundane issues.

Kina, formed 30 years ago, was until recently a diversified non-bank financial services group, the largest in PNG. Now it is something more.
It has funds under management to the value of 4.7 billion kina (about $2.34bn), and 150,000 people in its superannuation business.

Its Kina Securities offshoot is a foundation member of the Port Moresby Stock Exchange — which is heading for a shake-up later this year aimed at making it more open to further listings, commensurate with the growing ambitions of the country’s business community.

It provides traditional stockbroking, trustee services, corporate advice and finance. It is a major provider of leases and mortgages. It has about 200 staff, of whom 92.5 per cent are Papua New Guinean, with more than half, including in management ranks, women.

Kina’s chairman is Sir Rabbie Namaliu, who was one of PNG’s top public servants, then capped a political career by becoming prime minister, and is now a leading company director.

Mr Yates told The Australian that the major missing link in Kina’s platforms had been a bank. Last week it acquired a banking licence by buying the PNG subsidiary of Malaysian institution Maybank, which has been operating chiefly in the commercial sector in Port Moresby and Lae.

“It’s a pretty good internal fit,” he said, “with only one overlap. It gives us a complete range of services and products under one roof,” as it becomes PNG’s fourth-largest bank, after Bank of South Pacific, Westpac and ANZ.
Maybank set up in PNG in 1994, chiefly to serve its big Malaysian clients, especially in forestry and other rural industries. Kina will inherit a quantum of Asian clients and about 60 new staff.

Maybank’s parent has recently acquired a banking licence in Myanmar, thus in part its need to realise some assets.
“The PNG market has grown substantially for Asian corporations,” Mr Yates said, with Chinese construction firms and Korean, Indian and Pakistani businesspeople now highly active alongside the Malaysians and Taiwanese who have been living in PNG for generations.

The newly acquired entity will be called Kina Bank, meaning Money Bank.
The Kina Group plans to follow up its acquisition by listing on the Australian Stock Exchange, with Morgans acting for it.

“We’ve had a long-term partnership with Morgans,” Mr Yates said. “They have provided us a lot of help. They have a big client base, and we get on well with them, we have the same customer-driven philosophy.

“We believe that investors will find Kina a good way to gain an exposure to PNG, which is a fast-growing economy” likely to hit double digits in this first full year of liquefied natural gas production.

“If we make a success of a float, it helps provide opportunities for other PNG firms to follow.”
Mr Yates believes further opportunities are at hand for expansion within PNG, partly as a result of tightening regulations and increased compliance costs.

“The Bank of PNG (the central bank) is recognised as a competent regulator by the multilateral institutions such as the IMF, and is considering stepping up to the Basel III framework. Smaller PNG institutions may find it impossible to comply.”

He said that if Kina goes ahead with an ASX float, it would hold its fire for a year while it establishes a sound track record for delivering on promises before considering further expansion, which could involve realising opportunities elsewhere in the Pacific.

Despite the fall in commodity prices, the expansion of output through further LNG operations and mining projects such as Newcrest’s Wafi, “helps provide a level of comfort in continued economic growth going forward”, Mr Yates said.