Biweekly News Collection No.11

No.11 (July 8, 2019)

Market Industry Trends

Cambodia’s rice exports to China exceed those to EU. Cambodia exported more rice to China than the EU for the first time during the first half of this year. The Kingdom’s rice exports during the first six months of this year amounted to 281,538 tons – up 3.7% from the same period last year. Among the 50 export destinations during the period, the Kingdom exported 118,401 tons to China or 42.06 per cent. The EU, which was the leading market for Cambodian rice exports, imported 93,503 tons (33 per cent). Cambodia exported a total of 626,255 tons of rice last year, of which 43 per cent, or 269,127 tons, was exported to the EU while some 17,000 tons (27 per cent) was exported to China. (Phnom Penh Post).

EuroCham Cambodia Launches White Book. The European Chamber of Commerce in Cambodia (EuroCham Cambodia) has launched the third version of its White Book for 2019 to advise European investors doing business in the Kingdom. The White Book is a set of recommendations on trade and investment policies compiled by EuroCham Cambodia. It will submit the book to the government for it to consider the regulatory and structural constraints faced in doing business in the Kingdom. (Phnom Penh Post).

Net Profit Margin up on all CSX listed stocks. The net profit margin of all stocks listed on CSX showed a significant increase last year, with an average of 20.89 %, led by the Phnom Penh Autonomous Port (PPAP). PPAP topped the rank with a 39.09 % increase, followed by Phnom Penh Water Supply Authority (PWSA), Phnom Penh Special Economic Zone (PPSP) and Sihanoukville Autonomous Port (PAS), whose figures stand at 27.77 %, 19.86 % and 16.54 % respectively. Grand Twins International (Cambodia) Plc (GTI), on the other hand, had the lowest net profit margin with 1.2 %. Compared to 2017, the average net profit margin of all listed stocks increased by more than 40 %. Net profit margin is equal to how much net profit generated as a percentage of revenue. All stocks have shown a positive performance during the last three years, in terms of revenue and net income, except for GTI, which saw a drop in net income in 2017. (Phnom Penh Post & CSX).

EU signed trade deal with Vietnam. The EU signed the trade deal with Vietnam on July 7, 2019. The accord was negotiated back in December 2015, but EU member states only gave their approval last week at a ministerial meeting. The deal will remove virtually all customs duties on trade between the two countries. EU-VN trade represents equivalent value of Euro50B in goods and Euro4B in services. EU investors will now have the opportunity to take advantage of a rising economy like VN and are keen to secure access to 95 million consumer. Beyond the clear economic benefits, this deal also aims to strengthen respect for human rights as well as protecting the environmental and workers’ rights in Vietnam. (Phnom Penh Post).

Global Supply Chains to be re-routed to Asean region. Chinese investment in the region’s manufacturing sector will intensify in the upcoming decade as China uses its Belt and Road Initiative (BRI) to re-orientate the global supply chain towards Asean in response to its trade battle with the US, a geopolitical expert predicts. (Phnom Penh Post).

Market Deals

CP all negotiates for 7-eleven stores in Cambodia and laos.. Thailand’s largest convenience-store operator CP All Plc released a report to the Stock Exchange of Thailand (SET) on Monday on its negotiations for a Master Franchise agreement in relation to the establishment and operation of 7-Eleven stores in Cambodia and the Lao People’s Democratic Republic. The company said the contractual parties are in the process of negotiating the terms of the Master Franchise Agreement and have agreed to an extension of the negotiation for a period yet to be agreed. This original period was due to expire by the second quarter of this year. (Phnom Penh Post).

AMRU inks $15M deal with International Finance Corp. (Phnom Penh Post). Amru Rice (Cambodia) Co Ltd, a local rice exporter and leading organic paddy producer, signed a more than $15 million loan agreement with the International Finance Corporation on June 26. The loan would be used to expand milled rice warehouses, drying silos, as well as to strengthen its packing standards, processing, quality and safety, and to increase capital to purchase paddy. The company plans to export 20,000 tonnes of organic milled rice to the EU, US, China and Hong Kong this year, and 40,000 to 50,000 tonnes next year. In the first six months of this year, the company exported more than 4,000 tonnes of organic milled rice, earning nearly $4 million. It expects to export 10,000 tonnes by the end of the year. (Phnom Penh Post).

KrisEnergy Starts 3D Seismic survey. Singapore-based firm KrisEnergy Ltd, which operates Cambodia’s Block A offshore oil development project, has started a 3D seismic survey in the area, a company press release said on Tuesday. It announced the commencement of a 1,200sqkm survey in the offshore Cambodia Block A concession, where KrisEnergy is developing the Apsara oil field. It claimed in late March that it will meet its schedule to extract its first drop of oil late this year. KrisEnergy first became a stakeholder for Block A in 2010, before buying the stake owned by Chevron for $65 million. It owns 95 per cent of the Apsara oil field in Block A, with the government owning the remainder. Minister of Economy and Finance Aun Pornmoniroth said in August 2017 that Block A is believed to hold about 30 million barrels of oil, which could be extracted over the course of nine years. (Phnom Penh Post).

SECC issues first of new license to CIC partners. Cambodian Investors Capital Partners Plc (CIC Partners) on Thursday announced that it obtained a license from the Securities and Exchange Commission of Cambodia (SECC) as the first “fund management company” in the Kingdom. CIC Partners is a subsidiary of Cambodian Investors Corporation Plc, a group of about 300 local investors, which was established in early April 2013. During the acceptance ceremony on Thursday, CIC Partners board director Kuy Vat said the firm would contribute to solving the challenges facing the Kingdom’s small and medium enterprises, particularly receiving finances from institutions. He added that CIC Partners will create a mechanism with quality, effectiveness and efficiency for investors and he expect many more to join the group. (Phnom Penh Post).

Macro-economy

CDC Approves $1.8B investment. The Cambodia Development Council (CDC) has approved more than $1.8 billion in investment projects during the first six months of this year, research by The Post has shown. According to its calculations, the CDC’s data shows that during the period from January to this week, there were 102 investment projects approved, which can create up to nearly 130,000 jobs upon their completion. The projects are mostly investments in garments, footwear, bags, hotels, commercial centers and entertainment venues. Secondary projects include plastic manufacturing plants, medical equipment, solar panel components, and rubber processing plants, fruit processing plants, toys, carton processing plants, construction material factories, agro-industry farms, husbandry, cigarette factories, and yarn and electric wires. The ongoing trade war between the US and China has made many foreign companies, especially Chinese-owned ones, search for manufacturing sites outside China to avoid tariffs imposed by the US. (Phnom Penh Post).

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