Alchemy Capital - PNG Limited

23/01/2026

Our Client intends to purchase a block of six to eight units/apartments preferably around Korobosea, East Boroko, Town or Gordons 5 areas.

Our budget is K6 million maximum depending on the condition of the property.

We prefer to deal directly with the owner of the property. Do let us know if you have something similar for sale.

15/09/2020

13,000 followers & counting. Thank you all. Couple of investment tips coming up soon.

01/05/2019

Thank you! We've reached 10,000 'Likes'. Like our Page & stay in tune for more updates and ideas on investments! :)

10/12/2017

The Cryptocurrency Era. A High Risk High Return Investment.

By Charles Lee

There has been so much interest as of late regarding cryptocurrencies which has been disrupting global currency markets and is poised as a possible global currency, enabling an ease of transactions and security across sovereignties and financial jurisdictions. The Bitcoin, seemingly the most common type of cryptocurrency threatens seasoned global currencies such as the greenback and the euro and is a possible competitor for gold which is widely traded and held as a storage of value.

Recent stockmarket reports show an astronomical rise in the value of Bitcoins in excess of $17,000 before subsiding to $14,000. The rule of thumb for stockmarket investors and traders alike is that a general rise or fall in the value of any stock by 40% within a year either way may signal a pending counter measure to correct any possible irregularities in the market and hence before that happens they would swiftly profit by either buying or selling the stock before an impending market correction. Such has not so much been the case for cryptocurrencies and Bitcoin.

A key reason could be that the total value of all cryptocurrencies traded are less than $400 billion compared to the rest of the stockmarket which is in excess of $40 trillion. Hence there is still possibly room for more growth. But these figures also tell us that investors as opposed to traders represent a commanding position in excess of 90% of the market and are still not comfortable to bankroll cryptocurrencies.

Investors are long term and wary of volatility, something which has plagued cryptocurrencies. The common feel among investors is that regulators and central banks around the world are yet to formally accept it as a medium of exchange. They're also worried about security issues and its registry systems.

Cryptocurrencies could possibly redefine the functions of bank treasuries throughout the globe as exchange rates would not apply to it when used to transact. Bearers are only exposed to foreign exchange risk when they purchase and sell cryptocurrencies but not when they use it to purchase goods and services in different financial jurisdictions across the globe.

At Alchemy Capital we are of the view that cryptocurrencies must be backed by physical storage of value be it gold or diamond, whichever is widely acceptable. Until then, its value will remain fluid and subject to volatility fueled by speculation.

Only when the above condition is met, we would recommend institutional investors to consider no more than 5% capital / asset allocation for cryptocurrencies for the mid to long term but we also caution those who have a low tolerance for risk to avoid investing in cryptocurrencies as losses can be severe in the short to medium term due to its speculative nature especially at this stage.

Ends/.

14/08/2017

What PNG can Learn from the Global Financial Crisis of 2007 and 2008.

By Charles Lee.

There are in fact two spheres of influence in any country; (1) the financial and (2) economic spheres. The former is driven by an increase in risk appetite of the financial market and its participants while the latter is driven by fiscal and monetary policy.

As countries develop, it's markets will tend to redefine risk. Acceptable levels of risk will gradually increase such that they will demand a higher leveraged products than what the market is offering.

For instance, the market will demand higher yielding products than traditional bank deposits and IBDs. This will then cause banks to realign their exposures in order to offer that product. Banks could potentially reallocate capital invested in domestic bonds to other higher yielding products domestically or overseas to be able to provide the returns that their customers and clients alike seek. In effect both parties have moved away from their traditional and acceptable levels of risk to a higher level of risk as risk is proportionate to return. A bubble has started to take shape so to speak. These are all happening in the financial sphere.

The above will create a vacuum between the financial sphere and the economic sphere. How developments within the financial sphere feed into the economic sphere can have drastic consequences, some of which we have seen during the global financial crisis and therefore should be handled carefully.

Politicians as policy makers have some control over the economic sphere but no so much of the financial sphere. This is because they can set monetary / fiscal policies through Treasury and the Central Bank but they can't control financial markets and it's participant's free will to decide on what constitutes their level of perceived acceptable risk.

Right now in PNG, we have a thriving financial system. Superfunds have grown exponentially and banks have been able to recapitalize their balance sheets but we still have a lagging economy. Only one conclusion can be drawn. The distribution of capital is not evenly spread to key household markets.

How we bridge the gap between our financial and economic spheres is what is critical.

Follow our Alchemy Capital Page on Facebook for more discussions.

02/03/2017

Superfunds in PNG use marked-to-market revaluations for their property and bond portfolios to provide an appraisal of the realistic financial position of the assets concerned.

Our argument is that marked-to-market revaluations can only achieve their true intent and purpose in developed markets where the relevant asset classes concerned are liquid (buyers and sellers are many and readily available and where the settlement process is efficient).

The same cannot be said for PNG. There is no guarantee that prices in which certain assets are revalued at and held can be sold easily. Hence capital gains derived from those assets remain unrealised until it is physically sold and cash is received.

It is therefore very risky to include unrealised gains as profit and pay them out of cash and cash equivalents.

25/02/2017

When comparing investments within the same asset class, use the yield return formula to decide which business (s) to go for. This helps better manage scarce capital among competing business opportunities.

Formula:
Yield Return Per Annum (%) = Total Income Per Annum (Kina) ÷ Total Capital Required for Investment (Kina) × 100

The higher the yield, the better the returns. In saying that, a precondition should be that you are happy and can manage the level of risk associated with the business concerned.

25/07/2016

2,980 Likes in under three months! Thank you all!

23/06/2016

Many businesses and high net worth individuals in Papua New Guinea either directly or indirectly, carry some form of investments. Most of these are in the form of property, cash and or interest bearing deposits. Very few have shares and treasury bills.

We have found that they are cost conscious and have little time to effectively and properly manage their investments because apparently their core day-to-day activities from which they are measured against by their board and shareholders can be something else, for instance construction, mining, charity, education, health services, agriculture, etc.

The common problem we understand is that they do not get their asset allocation mix right and hence do not achieve organic growth leading to desired results in their investments. Staffing and administration costs to manage these investments is another deterrent. Their investments therefore remain stagnant and they get frustrated by this.

Are you one of them? We can help provide independent advice and help you harness these "outlying" investments to achieve greater steady income and growth while you concentrate on managing your core business.

Talk to us now!

21/06/2016

Our view is that the Biotech stocks will find support at the 2,600 mark on NASDAQ hence we would recommend a BUY at that point. We will follow this index to see if our analysis holds.

We recommend e-trade platforms for PNG investors who are keen to buy biotech stocks overseas.

http://www.bloomberg.com/news/articles/2016-06-20/biotech-stocks-tumble-in-longest-selloff-in-two-decades-chart

The Nasdaq Biotechnology Index fell Friday for a ninth straight day, marking its longest selloff since June 1996. The group has tumbled 10 percent since June 6, dragged down by an 18 percent decline in Biogen Inc. after the company said an experimental drug for multiple sclerosis failed in a mid-sta...

15/06/2016

"The Crowne Plaza hotel in Port Moresby has gone on the market. Located in the heart of ‘Town’, the four-star hotel has ‘sweeping’ views over the Coral Sea and Fairfax Harbour and is a PNG institution. The current owner is Kumul Hotels Ltd, itself co-owned by SPHC Management Limited (part of Intercontinental Hotels Group), Nambawan Super Limited and Melanesian Trustee Services Limited. The hotel is being marketed internationally by JLL and in PNG by Deloitte". [Source: Business Advantage PNG]