This follows after the Dow Jones in the New York Stock Exchange market experienced its first ever drop of 1,179 points in a single day on Monday since 2011 affecting global markets in Asia and Europe.
The stock markets in the US have now picked up, however will come with growing expectations that interest rates will start increasing in the US as a result developing market countries will find it difficult to sell their sovereign bonds.
This was according to an Australian commentator and former advisor to government, Paul Flanagan.
Mr Flanagan said any PNG sovereign bond will now be less attractive relative to higher returns from markets with a much better credit rating than PNG.
“PNG has a poor credit rating and this was downgraded during recent years.
“This will make the PNG sovereign bond both harder to sell and therefore require a higher interest rate which will make it more expensive.
TheGovernment should seek budget financing from much cheaper sources as it repairs its budget,” he said.
He said although there were big changes over the course of the last few das of the share market itself, this will disappear id a longer term perspective is taken.
“Oil Search shares are now worth K24 (AUD7.50), the same level as 9 November 2017. They fell to K22 (AUD7) by November end 2017, reached K25 (AUD8.00) by 4 January, down to K24.70 (AUD7.65) by 19 January, then up and fell over the course of the big stock market collapse but back at K25 (AUD7.50).
“These shares had fallen to K20.70 (AUD6.40) in August 2017, but well down from the K31.60 (AUD 9.80) back in June 2014,” he explained.
“Underlying movements in oil prices will be more important than short-term movements in share market sentiments.” Statement