The Pacific Balance Fund (PBF) and other Unit Trust/Investment Schemes in Papua New Guinea (PNG) must improve to help grow the capital market and support domestic investments, says Minister for International Trade and Investment, Hon. Richard Maru.
Minister Maru raised concern that PBF had regressed in its growth while other similar unit trusts managed by Mineral Resources Development Company (MRDC) grew tremendously from K680 million in 2008 to K7 billion net worth to date and Mineral Resources Lihir Ltd (MRL) has also grown fund from K60 million in 2009 to K700 million today while PBF’s net assets was K556m in 2018 and it was KK584 million at end the end of 2021. PBF fund established in 1973 but has not grown to expectation over the years.
“Financial institutions are a key sector that our nation will rely on in the future when mineral deposits and other non-renewable resources run out at some point. Our economy can be built at the back of financial institutions with sound monetary policies and prudent financial management. Many strong and successful economies around the world is backed by financial institutions,” said Minister Maru.
PBF is one of the Papua New Guinea’s largest equity funds that is owned by nearly 20, 000-unit holders (PNG citizens). PBF was created as a commercial unit trust from the Investment Corporation Fund of Papua New Guinea in 2001 during the privatization of state-owned enterprises.
“PBF was initially invested by our fathers and mothers way back in 1973. Some have already passed on and most contributors are in their 60s and 70s. Whether they were paid with the dividend in full or not is the question that needs to be answered by the trustee and fund manager of the fund,” said Minister Maru.
Minister Maru has directed the Securities Commission of PNG (SCPNG) to take stock of all the Unit Trusts and Investment Schemes in PNG.
“PBF is a key investment driver that can provide liquidity and meet investment needs domestically instead of looking for capital and investors outside that are associated with many setbacks and costs involved. As Minister responsible, I would like to know why it has not grown and who is responsible for it, so I have tasked the Securities Commission to look into the management of PBF.
“SCPNG must conduct thorough investigations on the PBF and ascertain the management approaches undertaken on the fund’s portfolios by the trustee and fund manager,” said Minister Maru.
“The National Government needs full report of the PBF as to how it has grown, who are the trustee and fund managers, and what are the objectives and investment portfolios that can contribute and attribute value to the investee,” added Minister Maru.
