The Fund's domestic cash portfolio comprises Interest Bearing Deposits (IBDs) and Treasury Bills (TBills) with maturities up to 90 days. As at 31 December 2009 the Fund held a total of K334.4 million in this sector which represented 12.2% of the total portfolio.

The Fixed Interest Portfolio comprises government, semi government, corporate securities and debt including development loans beyond 90 days. As at 31 December 2009 the value of fixed interest securities in the Fund was K462.4 million, which represented 16.8% of the total portfolio.

The Domestic Equities Portfolio comprises listed and unlisted equities. As at 31 December 2009 the Fund's equity portfolio stood at K1,306.7 million. This represented an increase of K97 million or 8% over the K1,209.7 million total for 2008.

Listed Equities

As at 31 December 2009 the domestic listed equities portfolio was valued at K771.5 million. The portfolio increased by K21.2 million for the year. The listed equities portfolio experienced sluggish growth

Unlisted Equities

The portfolio increased from K358 million ending 2007 to K459 million ending December 2008, resulting from capital growth from valuations and additional investment of K13 million representing a 5% stake in B mobile through Capital Way Holdings Limited and acquistion of Morbe Front Holding Limited for K3 million. The revaluation of the portfolio was carried out by an independent valuer.

Income generated in this sector for the year is K117 million comprising K29 million as dividend received and K88 million achieved through revalution.

A new unlisted investment strategy and comprehensive investment selection criteria was adopted during the year to enable the assessing and undertaking of unlisted investments. These criteria emphasise various sound business benchmarks including solid earnings, good cash flow, quality management, good corporate governance. Minimum entry level, visibility of exit and community and social impact are also included as added desirable features of preferred investments.

Table: Unlisted companies that Fund holds together with percentage holding:

Unlisted equities	Industry	% holding
Alotau International Hotel Ltd	Hospitality/ tourism	33
Nationwide Rent A Car Ltd	Motor Vehicle Hire	6
Big Rooster (PNG) Ltd	Fast Food	100
Brian Bell & Co. Ltd	Wholesale Retailing	34
Coastwatchers Court Ltd	Property - residential	65
Capital Way Holding Ltd	Telecommunication	10
Gazelle International Hotel Ltd	Hospitality	65
Hunter Ltd	Property - commercial	30
Kumul Hotels Ltd	Tourism & Hospitality	55
Marsh Ltd	Insurance Broker	10
Moki No. Ltd	Property - commerical	100
PNG Water Ltd	Utilities	30
Pacific Building Services Management Ltd	Lift Service	50
Paradise Food Ltd	Food & Snacks	85
Post Courier Ltd	Media	21
SP Brewery Ltd	Manufacturing	20
Toyota Tsusho (PNG) Ltd	Motor Vehicle	4
Westpac Bank Ltd	Banking & Finance	7
Morobe Front Holdings Ltd	Property - Development	100

In light of the prevailing elevated demand for premium commercial and residential properties, a significant effort by KFM, NSL and its facility manager to improvements in both the physical condition and financial results together with savings in outgoings in most of the properties.

The NSL Property Portfolio in 2008 saw major new projects undertaken and continuation of projects that were on-going. KFM is working closely with NSL and other reputable consultants to develop existing commercial properties in Port Moresby, Lae and Kokopo.

The major new developments included the commencement of construction of the new multi storey development at Hunter Street in March 2008 and sixty-two (62) low-set residential houses at Malolo Estate, 8 Mile. The development of 4 apartments in L22 S43 on Taurama are in documentation stage while the redevelopment of former IPI Building in Lae is in tendering stage for construction.

NSL has also acquired a number of properties in Lae and Kokopo as diversification from Port Moresby portfolio.

Table: Property portfolio as at 31 December 2008