Biweekly News Collection No.15

No.15 (February 24, 2020)

Market Industry Trends

Rubber Export Increases 17%. Cambodia exported 27,445 tons of rubber worth $40 million in the first month of 2020, up 17% compared to the same period in 2019, according to the Ministry of Agriculture, Forestry and Fisheries official Khuon Phalla. The [rubber] production also increased last month. An increase in global demand was the main driver of the industry’s growth, as China remains the largest market for the Kingdom’s rubber. The average price last month was $1,433 per ton, up $207 from December. (Phnom Penh Post)

Collective Noodle Brand Gets Backing from Ministry. The Ministry of Commerce has called on more local businesses to join the Phnom Penh Kuyteav collective business system, which was created by the Cambodian Chefs Association to promote local products under the brand. A collective business system is an organisation composed of businesses, merchants and professionals from the same industry or geographical region. It typically pools resources, shares information and provides other benefits for its members. (Phnom Penh Post)

Cambodia Benefits from Japanese Tech. Minister of Economy and Finance Aun Pornmoniroth has encouraged the Japanese-owned Kirirom Institute of Technology to seek more Japanese technology companies to aid the establishment of the Eco-Technology Park at the Kirirom resort in Kampong Speu province. The park aims to develop human resources in order to materialise the government’s vision to transform into a digital economy and digital government. Pornmoniroth said Cambodia has been implementing a Friendly Business Environment policy to attract more foreign investors by making them feel confident and secure with their investments. A2A Town and the Kirirom Institute of Cambodia should work with the newly-established Decho Startup Centre to seek new innovations and establish start-up programmes, he said. (Phnom Penh Post)

Organic Vegetable Retailer Unveils QR Code Scheme for Origin Sources. Organic vegetable retailer Natural Agriculture Village has introduced QR codes on its product packaging, which will allow consumers to see where their produce comes from. According to Natural Agriculture Village president Bun Sieng, who is also a member of local distributor Green Gold, their suppliers produce safe vegetables and follow Good Agricultural Practice (GAP) guidelines. Their produce will bear QR codes provided by her company and be registered with the provincial departments of agriculture. The departments of agriculture have issued GAP certificates to 42 farmers in eight provinces, including Kandal, Battambang, Pursat, Siem Reap, Tbong Khmum, Kampong Chhnang, Prey Veng and Banteay Meanchey. Green Gold supplies an average of between 300 and 400kg of vegetables per day on the market. The company has signed an agreement with some of those farmers, pledging to buy vegetables from them at a price of around 2,000 riel [$0.50] per kilogramme. More than 400 farmers have signed on with Green Gold, which distributes produce to Lucky Supermarket, Makro Cambodia, Aeon Mall Phnom Penh and local markets such as Central Market, Doeum Kor market, Phsar Depot market and Russian market. Cambodians consume 500 tons of vegetables per day, at a daily cost of between $200,000 and $300,000, data from the Cambodian Centre for Study and Development in Agriculture shows. The Kingdom is also estimated to import fruits and vegetables worth more than $300 million annually. (Phnom Penh Post)

PPC Bank Posts Net Profit of $17.4 Million, Up 40.5%. Phnom Penh Commercial Bank’s (PPC Bank’s) net profit last year rose 40.5% to $17.4 million [compared with 2018], the company announced. Total loans were $630 million, up 24.1% compared to 2018. The growth has slowed down due to capital regulation and high competition in the commercial bank industry and it is significant that the bank managed to pull off a strong profit by expanding its customer network and fortifying digital services. The bank said it lowered costs by delivering local capital instead of bringing them from South Korea. According to NBC as of the second quarter of 2019, there were 45 commercial banks, 15 specialised banks, and 81 microfinance institutions, of which seven are microfinance deposit-taking institutions (MDIs). It said there were also 254 rural credit operators, 15 leasing companies and 16 payment service providers. (Phnom Penh Post)

Koreans Eying Bank IPO. Korean investors are looking forward to investing in the local stock market as it prepares to welcome Acleda Bank Plc into its main board. With Acleda Bank, one of the largest banks in the Kingdom, scheduled to go public in upcoming weeks, hundreds of Korean businesspeople and investors joined a seminar in Phnom Penh on Wednesday entitled ‘Acleda Bank Plc is going IPO’. (Phnom Penh Post)

Regulator Touts Achievements of Local Stock Market. The Cambodia Securities Exchange (CSX) continues to go from strength to strength, with the average trading value growing nearly five-fold from 2018 to 2019 to surpass $157,000, the latest report from the market regulator shows. The Securities and Exchange Commission of Cambodia (SECC) issued a report highlighting some of the achievements of the local bourse in its eight-year history. By the end of last year, CSX had attracted 22,446 investors, raising nearly $151 million for all five companies in the main board and the three companies that have issued bonds, the report shows. (Phnom Penh Post)

Dual Currency Payment System Launched. Cambodia’s Acleda Bank Plc and Thailand’s Siam Commercial Bank Pcl (SCB) have teamed up to launch an innovative payment system that will allow customers to pay in either country using their own currency. The system uses QR codes to allow customers to conduct cashless transactions. The move comes after the National Bank of Cambodia (NBC) signed a memorandum of understanding with the Bank of Thailand on cooperation in financial innovation and payment systems. The agreement aimed to create an ‘Interoperable QR Payment’ system to promote the use of the Cambodian riel and the Thai baht. NBC selected three local banks to participate in the new cross-border payment service – Acleda Bank, Foreign Trade Bank of Cambodia and Cambodian Commercial Bank Ltd. Acleda Bank, Cambodia’s largest locally-owned bank, and SCB launched the new cross-border, QR code-based payment system, which will help Cambodia and Thailand achieve their goal of attaining $15 billion in two-way trade in 2020. Recent data from the Thai Embassy in Cambodia shows that two-way trade was worth about $9 billion last year, an increase of 7.14 per cent from 2018. (Phnom Penh Post)

Market Deals

Singapore Company Eyeing Business Opportunities in Kampong Speu. Singapore-based company PLMP Holding Pte Ltd has expressed its intention to invest in various sectors in Kampong Speu province, despite the EU’s partial withdrawal of its Everything But Arms (EBA) scheme, provincial governor Vei Samnang said. The company currently owns 115ha in the province’s Kong Pisei district and with its huge capital investment, is eyeing the construction sector and has expressed its interest in establishing special economic zones (SEZs), fruit packaging plants and steel mills. Improved political stability, a vast young labour force and well-organised infrastructure make the province an attractive option for investment.(Phnom Penh Post)

Two Japanese Firms Move into Internet Banking. Two Japanese firms will team up to provide internet banking services in the Kingdom. Recycling firm ReNet Japan Group Inc and Soramitsu Holdings AG, a Japanese venture based in Switzerland, are set to launch their service by spring next year at the earliest, ReNet Japan said in a statement. The two firms will set up a joint operation in the Kingdom by April, with ReNet Japan holding an 80% stake and Soramitsu the rest. The group plans to develop a credit-scoring system by combining the payment data of Soramitsu and the loan data of ReNet Japan. Soramitsu developed “Project Bakong” – essentially a quasi-form of a central bank digital currency (CBDC) – for the National Bank of Cambodia (NBC) and has been testing it in a live and confined environment since July 18. The blockchain-based, peer-to-peer payment and money transfer platform will be launched in the next few months, NBC director-general Chea Serey told The Post last month. So far, she said, the scheme already has the support of 11 banks, with many more expected to join soon. Serey described the system as “the national payment gateway for Cambodia”.(Phnom Penh Post)

South Korea’s Woori Bank Merges Cambodian Units. South Korea’s leading Woori Bank on Sunday announced that it has officially merged its two subsidiaries in Cambodia – WB Finance Co Ltd and Woori Finance (Cambodia) Plc. The new company – dubbed “WB Finance” – is part of Woori Bank’s plans for business expansion in the Kingdom’s crowded financial sector. The merge comes after the two institutions received approval from the National Bank of Cambodia (NBC) and the Ministry of Commerce. The new institution is currently the Kingdom’s fifth largest savings bank, which “in the mid- to long-term, will become a commercial bank offering comprehensive financial services in Cambodia. WB Finance will integrate several financial products and services including savings, loans, mobile banking and money transfers. Customers’ accounts at Woori Finance have been transferred to WB Finance under the same terms and conditions. (Phnom Penh Post)

Transport Minister Unveils New Port for Preah Sihanouk Province. With assistance from Japan, the government is planning to build a new container seaport in Preah Sihanouk province, Minister of Public Works and Transport Sun Chanthol revealed on Friday. Speaking at a press conference, he said a 14.5m deep port will soon be built in the southern province with the financial assistance of the Japanese International Cooperation Agency (JICA). “We will be able to ship directly without having to stop at Singapore or Hong Kong,” he said. The ministry’s General Directorate of Logistics director Chheang Pich told The Post that the project is now underway after JICA recently completed the study. Sihanoukville Autonomous Port (PAS) director-general Lou Kim Chhun in a previous interview said the new port will cost around $203 million. (Phnom Penh Post)

Rules and regulations

CXS to Change Trading Method. The daily price limit for buying shares at the local stock market through the negotiated trading method (NTM) has been set at 10% of the previous closing price. According to a sub-decree issued last week by the market regulator, starting Monday (Feb.24), transactions negotiated through NTM have a daily price limit of 10% of the previous closing price. The purpose of the amendment is to “protect investors and the market from unfair trading”, said the sub-decree. Trading at the Cambodia Securities Exchange (CSX) is conducted via two methods – the auction trading method (ATM) and NTM. ATM is for investors who lack a counterparty. NTM, on the other hand, allows a pair of investors to place and execute their confidential orders in a single large transaction after successful negotiation on the conditions of the transaction. NTM was officially launched in the CSX in January 2018. Six transactions (equaling 14,864,114 shares) have so far been executed through this method. (Phnom Penh Post)


Moody’s Revised Prediction on Cambodian Economic Growth 2020. Moody’s Investors Service Inc has maintained its forecast for Cambodia’s real gross domestic product growth for 2020 at a moderate 5.5%. This is underpinned by the European Commission’s (EC’s) recent decision to suspended one-fifth of the Everything But Arms (EBA) scheme awarded to the Kingdom, and the potential adverse effects on tourism and spending incurred from the outbreak of Covid-19 – the disease caused by a new strain of Coronavirus, Moody’s said. It also maintained Cambodia’s credit rating at B2 with stable outlook. The global credit ratings agency’s 2020 projection is disparately conservative compared to the Kingdom’s 6.5% forecast, Asian Development Bank’s 6.8% and the World Bank’s “slightly below seven per cent” expansion. All three revised their forecasts earlier this year with the EBA predicament in mind. Coupled with the partial suspension, Cambodia’s growing minimum monthly wages will weigh against its competitiveness, which will diminish its attractiveness as a production base and will deter new foreign direct investment (FDI), Moody’s said. (Phnom Penh Post)

Migrant Remittances Total $2.8B in 2019. Cambodia migrant workers last year sent $2.8 billion back home in remittances, according to the latest report by the Ministry of Labour and Vocational Training. Speaking at an annual gathering last week, Minister Ith Sam Heng said the ministry continues to manage the employment and labour markets, which comprise of around 10 million workers. Of those, around 1.28 million are working abroad. Srun Theareach, a Cambodian working in a factory in Japan, told The Post on Sunday that he sent his family in Stung Treng province around $500 a month. The 32-year-old migrant says he has been working in Japan for more than two years, earning about $1,300 a month. “Due to the money I sent home, my family, who are farmers, enjoy a better life and have been able to expand our house.” (Phnom Penh Post)

GDT Says Revenues Up 15% in January. The General Department of Taxation (GDT) collected about 956.76 billion riel ($239.19 million) in tax revenue in January, up 14.74% compared to the same period last year. This is a positive step towards its target of collecting more than $2.885 billion by year’s end, the GDT said in a statement on Monday. GDT director-general Kong Vibol said in the statement that his department achieved remarkable growth last month. However, he called on his officials to gauge the direct and indirect impact of Covid-19 on the Kingdom’s economy. (Phnom Penh Post)

Meng: FTA with China Will Help Us Forget EBA. The loss of trade preferences in Europe would be more than offset if Cambodia manages to enter a free trade agreement (FTA) with China, said Cambodian Chamber of Commerce (CCC) president Kith Meng. Meng. Landing an FTA with the second-largest economy in the world will boost all sectors of economic activity in the Kingdom, allowing Cambodians to finally forget the losses incurred by the EU’s recent decision to partially withdraw the Everything But Arms (EBA) scheme. He was speaking at the Cambodia Customs Forum, an event organised by CCC in collaboration with the General Department of Customs and Excise of Cambodia (GDCE). (Phnom Penh Post)

Electricity Tariffs. The government will invest some $50 million to reduce electricity tariffs by $0.01 per kilowatt-hour for the industrial and agricultural sectors from this month, Ministry of Mines and Energy senior official Victor Jona said on Sunday. (Phnom Penh Post)


Biweekly News Collection No.7

NO.7 (APRIL 17, 2019)


AGRI BUDDY AIDS THE ENTIRE PRODUCTION CHAIN. Agri buddy, a Japanese-owned start-up, is the first agricultural facilitator working with the entire production chain in the Kingdom’s agricultural sector. Launched in 2015 with $730,000 in venture capital funding, the Siem-Reap-based “agritech” company currently provides services to 20 districts comprising some 300 villages and reaches more than 50,000 farmers as Agri buddy members. (The Phnom Penh Post).

ACLEDA’S BANK ANNUAL PROFIT DIP 10 PERCENT. The decrease was against 2017 based on the audited financial report. Acleda’s profit in 2018 is $84,009,268 and it was $92,527,998. The bank’s CEO highlighted the stagnant growth in the first six months as the reason. (The Phnom Penh Post).

NBC SET TO LEAD BLOCKCHAIN USE. NBC will be one of the first central banks to use blockchain technology in its national payment systems for use by consumers and commercial banks. The expected implementation is in the second half of 2019 as the experiment in supporting financial inclusion and greater banking efficiency. (The Phnom Penh Post).

ASEAN PAYMENT CONNECTIVITY A MAJOR STEP TOWARD CUTTING TRANSACTIONS COSTS. Migrant workers, tourists and small and big businesses will be able to cut the cost of their financial transactions in Asean after regulators, bankers and non-bank operators decided to integrate and upgrade their financial services across the region. Eight Asean countries agreed on Asean Payment Connectivity during the meeting of Asean Finance Ministers and Central Bank Governors in Chiang Rai. (The Phnom Penh Post).

FOREIGN INVESTORS EYE IDLE VN BANKS. Foreign financial institutions eye up poorly-performing Vietnamese banks after being given the green light to acquire stakes in local institutions in a move to speed up the restructuring of the country’s banking industry. Mergers and acquisitions in the banking industry had remained quiet for the past two years after witnessing a record from 2011 and 2016. The Vietnamese financial market holds a lot of potentials, but license applications to establish a bank are very difficult, so purchasing shares in local banks or acquiring a 100 percent share in ailing institutions are the best options, according to a local expert. J Trust Corp expressed an interest in acquiring a stake in the Construction Bank (CB). (The Phnom Penh Post).

VN STEPS UP THE FIGHT AGAINST FAKE GOODS ONLINE. With the rate of growth of more than 30% in 2018 and the expected growth continue in 2019 and 2020 on the e-commerce market in the size to reach 13 billion, the Vietnamese relevant authority is seeking the solutions to stop fake goods appearing on e-commerce websites. (The Phnom Penh Post).


GUANGBO GROUP STOCK TO OPEN STATIONARY AND SPORTS PRODUCTS FACTORY. China-based Guangbo Stock Co Ltd plans to open a stationery and sports products factory in the Kingdom, following the meeting of the president of the company and minister of commerce of Cambodia. The group currently produces office stationery, paper, and plastic products in China, selling them domestically and overseas. On March 21, the group inaugurated a new production plant in Vietnam, its first overseas factory. (The Phnom Penh Post).

MOBILE CLOTHING MARKETPLACE ZILINGO PLANS TO EXPAND INTO THE KINGDOM. Mobile marketplace for clothing and lifestyle products Zilingo has unveiled plans to expand its business to Cambodia, among other Asian markets, after raising $226 million in a series D funding round1. The company has plans to invest capital for long-term value building across the supply chain, building a new and deeper relationship with manufacturing partners in Cambodia, Vietnam, Sri Lanka, and China, and expanding into the new markets like the Philippines, Indonesia, Australia, and the US this year. Zilingo has headquarters in Singapore. (The Phnom Penh Post).

HYDRO DAM, SOLAR POWER STATIONS APPROVED. A project on the hydroelectric dam and supplemental solar power stations with a total capacity of 220MW were approved by the government.

The hydro dam investment was granted to SPHP (Cambodia) Co Ltd investment project to build the hydro dam station along Pursat river in Veal Veng district’s Pramuoy commune. The project is Build-Operate-Transfer (BOT) with $231.10 million invested in 39-year concession term. 80MW will be launched in 2023.

On April 4, Schnei Tec Co Ltd received government approval for an investment project to build two more solar-power stations. One station will be in Pursat province with a 60MW capacity and another will be in Kampong Chhnang province with the same capacity. The project will be Build-Owned-Operate (BOO) with more than $116 million invested in a 20-year concession term. Currently, the company pumps 20MW of solar energy into the national network out of a total 60MW produced at its Kampong Speu station. The government also approved additional capacity of 20MW for the production in Kampong Speu. (The Phnom Penh Post).

NAGACORP LTD UNVEILS NAGA3. The company which is the only licensed casino in Phnom Penh announced $4 billion Naga3 Project on the site of the former “white building” in Tonle Bassac commune, a 29-page document filed with the Stock Exchange of Hong Kong Limited said. The company said the government had agreed in principle the construction of the Naga3 integrated entertainment complex in four 42-story buildings on 7,757sqm. (The Phnom Penh Post).

EDUCATION PROGRAM FOR ENTREPRENEURS TO START ITS SECOND ROUND. Private equity firm Cambodia Investor Club (CIC) will soon start the second round of its Beyond Investment Opportunity (Bio) programme, aiming to accelerate investment activity in Cambodia by educating investors and entrepreneurs. (The Phnom Penh Post).


ADB unveiled the growth forecast of the Cambodian economy of 7.0% for 2019 and 6.8% for 2020 at the launch of its Asian Economic Outlook on April 3, 2019. (ADB Press Release).

Biweekly News Collection No.6

NO.6 (MARCH 25, 2019)


CAMBODIA DIGITAL ECONOMY NEEDS 10 YEARS. This month Cambodia in cooperation with the World Bank held a workshop on Policy and Direction of Cambodia’s Digital Economy, remarking the gradual progress of the new business activities in digital payment, online entertainment and e-commerce and the increasing number of the users who adapt themselves to such technologies. The Deputy Prime Minister and Minister of Economy and Finance said that Cambodia needed to spend the first five years to set the fundamental elements in place and achieve digital readiness and spend another five or ten years growing the digital economy toward a technology-driven economy. A demographic dividend for such emerging driver of growth include an increasing number of educated youth who are fast absorbing digital technology, a rapid increase in the use of cell phones and smart devices, fast technological spillovers from foreign direct investment inflow, and a fast digitalization of all key economic sectors. (Phnom Penh Post)

KINGDOM SEEKS FTA WITH EAEU. Cambodia is negotiating a free trade agreement (FTA) with the Eurasian Economic Union (EAEU), hoping the new market will maintain the Kingdom’s economic growth. The EAEU – comprised of Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia, with 183 million people and a combined GDP of $2.2 trillion. So far EAEU has provided tariff-free access for 46 Cambodian made products for three years due to the Kingdom’s Least Developed Countries (LDC) classification. The existing preference covers Cambodia goods such as rice, silk, textiles, meat, vegetables and coffee. Cambodian agricultural products are the huge necessity for the new market. In Asean bloc only Vietnam has reached an FTA with EAEU in 2016 while Singapore is in the middle of negotiation. At the FTA, Vietnam-EAEU bilateral trade grew to $3.9billion in 2017, a growth of 31% from 2016. Russia is the main trading partner in the bloc accounting for almost 90% of trade with Vietnam. (Phnom Penh Post).

KINGDOM PLANNED TO HIRE TURKISH POWER SHIP. At the current sparking electricity shortage, Cambodia is considering negotiating with Turkey to hire 200MW capacity power ship to cover the supply gap. Early this month, the EDC also signed agreement with Laos for a 200MW increase in electricity supply starting from 2021. According to the EDC top management, the electricity demands have increased due to a boom in the construction sector. (Phnom Penh Post).


JT CAPITAL, a new local derivative brokerage firm, officially launched operations in Cambodia on March 24. In line with this launch, the senior official of SECC informed that trading activity in the derivative sector had a significant surge in 2018. Based on existing regulations of SECC (set late in 2015), a brokerage firm must meet the minimum capital requirement of $250,000 and the central counterparty must cover $5million. At this regulation background, there are more than 10 licensed derivative brokerage firms in Cambodia and four licensed counterparties. SECC in 2017 capped the number of central counterparty licenses at four, claiming that was a sufficient number to satisfy the current demand. (Phnom Penh Post).

GOVERNMENT APPROVES THE JAPANESE SMARTCITY INITIATIVE IN PRINCIPLE. The establishment of the Asean-Japan Smart City Network and of a Private-Public Forum on Asean-Japan urbanization development in Cambodia may soon be a reality after the government approved the initiatives in principle. Under these initiatives, the three largest urban areas of Cambodia namely Phnom Penh, Siem Reap town and Battambang town are set to be incorporated into the Asean Smart City Network. The network aims to increase regional connectivity and is presents in 26 cities across the Asean region. Smart City refers to a city development with smart and sustainable technology to tackle the effects of rapid urbanization such as traffic jams, water and air quality, peace and security. (Phnom Penh Post).

SPECIAL REPORTTrend of the digital start-ups in Cambodia

Note: The results above are based on the on-site data collection and should represent the estimates only. We aim at providing the general picture on the sector coverage of the tech statups in Cambodia. Also, we found among these startups, 10% locates in co-office space.
Source: 3E-Fii Flash Survey (on sample basis) on the First and Biggest National Tech Expo in Cambodia held from March 15 to 17, 2019.