(NO.3, JANUARY 29, 2019)MARKET INDUSTRY TRENDS
Lack of awareness and Investment hampering local fintech sector. Insiders of the National Bank of Cambodia said at an annual conference to fulfill its potential in the Cambodian economy, fintech must overcome a number of challenges, including lack of consumer awareness, a weak regulatory framework, and scant funding and investment. Additionally, other areas of fintech, like Artificial Intelligence and Big Data are still largely unexplored in Cambodia, while smartphone and internet-related technologies are flourishing. A lot of Cambodian are using smartphones, mostly in urban areas, but they still lack understanding on fintech. At the same time local investors do not seem interested in the sector either. (Khmertimes)
Japanese firms see opportunity in South East Asia garbage. Rapid economic development across SE Asia has created a serious garbage problem, as growing volumes of rubbish highlight a shortage of disposal sites. But in this problem lies an opportunity for Japanese companies with incineration expertise to begin the urgent task of constructing badly needed disposal facilities. Large scale incineration project in SE Asia such as one located about 150 km from Jakarta of Indonesia is support by JICA project. State-of-the-art facilities built by Japanese companies, including Hitachi Zosen Corp and JFE Engineering Corp, also generate power in the incineration process, which allows an early recovery of construction costs. (About 30% of the existing facilities in Japan- approximately 1,100 in total)- are capable of generating power. Japanese companies have increasingly received orders from Europe and other regions and SE Asia in this promising market, amid the Chinese competition. In Thailand, Chinese companies have received an increasing number of orders by offering lower prices. However, there have been complaints about failure, insufficient power-generation capacity and other problems at the incineration facilities built by Chinese companies. (Phnom Penh Post)MARKET DEALS
Gold Tower 42 to be completed by 2020.After years of delays in construction, building Gold Tower 42 is scheduled to be completed in early 2020. Yon Woo Cambodia, the company that owns the building, reached an agreement in November 2017 with Shenzhen Hongtao Decoration and Weimin Construction & Engineering, which will be in charge of completing the project. The project began in 2008 and has already been delayed three times: first in 2009, following the global financial crisis, and again in 2012. Construction resumed in 2013 and then stopped again in 2017. Yon Woo Cambodia announced in 2018 that Gold Tower 42 construction has already cost $100 million so far and another $140 million will be spent to complete the whole project. (Khmertimes)
Hyundai joins venture with Vietnamese auto firm. A joint venture of Hyundai and Vietnamese firm Thanh Cong Group JSC was singed to boost sales in the merging market. Two parties signed an initial agreement to establish a sales joint venture with the goal of selling 100,000 vehicles in Vietnam by next year. Sales of Vietnam’s automobile sector jumped 27% to 287,949 units in 2018 from 226, 120 in 2017. In order to achieve the sales goal, Hyundai will increase production to 100,000 vehicles in the second half of the next year from 60,000. (Yonhap News Agency).
Chip Mong Group bank unveiled. President of Chip Mong Commercial Bank Plc, Yew Wan Kup said the bank obtained an in-principle license from the National Bank of Cambodia in May 2018 and has been building up its team since then. The bank will begin operations by offering banking products and then gradually move to the latest digital banking ones. (Phnom Penh Post).LEGAL AND REGULATIONS
Ministry of Commerce to lose $60M a year in revenue. The ministry of Commerce will lose $60 million in revenue annually after the government eliminated export procedures in a campaign to boost competitiveness. (Phnom Penh Post).
Ministry of Commerce is drafting the Law on Customer Protection. The law is expected to promote the fair competition among business people and improve customers’ welfare. (Ministry’s annual report 2018).
Cambodian government reveals the team to construct the draft of the Digital Economy Policy. The team consists of 23 people mostly from the Ministry of Economy and Finance and Supreme National Economic Council. (Sub-decree).MACROECONOMY AND POLICIES
Trade deficit grows once more. Cambodia’s trade deficit with the rest of the world continued to widen last year to $5.2 billion, as the imports outstripped the exports once again, according to a report of the National Bank of Cambodia. A total import in 2018 was at $18.8 billion of goods and a total export was at $13.6 billion. The annual growth rate of import was at 21.3% and export was 21% in 2018. Increasing demand for goods such as construction materials, vehicles, food-related goods, as well as increasing price of imported oil and more demand for raw materials for manufacturing sector are the main causes of accelerating imports. Business Research Institute for Cambodia (BRIC) chief economist Hiroshi Suzuki said it is common for developing countries like Cambodia to see a trade deficit increase during high growth stages because to maintain high growth it is necessary to improve new equipment and raw materials for production – same situation of Japan in high growth period between the 1950s and 1960s. Cambodian trade account deficit has been completely offset by the surplus of service accounts – mainly in tourism- official development assistance, and foreign direct investment. (Phnom Penh Post).