Kina Asset Management was incorporated on 9 October 2007.
The Company aspires to provide investors with a way to participate in investment opportunities identified by the Manager. The Company has a wholly owned subsidiary Kina Asset Management No 1 Limited which will hold the Company’s investments. Kina Asset Management No 1 Limited was incorporated on 29 November 2007.
The Company invests in a Portfolio of Permitted Investments as outlined in Section 3.5, which will be predominantly PNGX and ASX listed securities.
The Company’s investment objectives are to:
- provide a positive rate of return to Shareholders via a combination of capital growth and income;
- provide Shareholders with regular dividends; and
- preserve the capital of the Company.
The underlying principle of the Investment Strategy is to invest in opportunities that the Manager believes have good prospects for steady capital growth, and a history of paying regular dividends. The Manager will be a stock picker, not a market timer.
The Investment Strategy mandates that the Portfolio will normally be fully invested in equity securities and not normally invested in fixed interest securities. Cash will normally be held only for operational purposes.
Initially, investments will be made predominantly in equities issued by entities operating in PNG. Over time, it is intended to diversify into equities issued by entities operating outside PNG of up to 40% of the Portfolio value.
Up to 25% of the Portfolio value may be held in unlisted securities.
Initially the Portfolio will not be leveraged. The Board will review this strategy periodically in consultation with the Manager.
The Manager intends to identify companies which meet the Company’s Investment Strategy, and then make an investment in each of those companies on the Company’s behalf. Therefore, it is unlikely that the Company will hold an interest in more than 15 – 25 companies at any one time.
The Manager anticipates rebalancing the Portfolio to ensure overexposures to individual investments are eliminated and brought within the normal limits under the Investment Strategy such that not more than 20% of the Portfolio will be invested in securities of a single entity.
The concentration of the Company’s Portfolio in this way may result in a reduction of the benefits of diversification and may increase the risk profile of the Company when compared to a more diversified portfolio.
Under the terms of the Management Agreement, the Manager is only permitted to invest the Company’s funds in the following investments:
- listed securities, being any security listed on PNGX, ASX or any other recognised securities exchange;
- unlisted securities that the Manager considers to be suitable for investment;
- managed investment schemes including index funds;
- cash and interests in cash management trusts;
- bills of exchange, promissory notes or other negotiable instruments accepted, drawn or endorsed by any bank; and
- other financial products as permitted by the Investment Strategy.
Pursuant to the Management Agreement, the Manager is permitted to undertake investments without Board approval, provided they are within the parameters of the Investment Strategy. The Manager must seek approval from the Board to undertake investments outside the parameters of the Investment Strategy.
Dividends may be payable to Shareholders annually in arrears as a final dividend each year where the Board feels it is prudent to do so and the distribution is permitted by the Companies Act. A dividend reinvestment plan may also be offered to Shareholders.
Reports to Shareholders
In accordance with the PNGX Listing Rule 4.12, within 14 days of the end of each month the Company is required to release to Shareholders via PNGX a statement of the net tangible asset backing of its Shares at the end of that month.