No.19 (Oct 28, 2020)
Telecom operators have their licenses revoked. The Ministry of Post and Telecommunication has decided to suspend and/or revoke the licenses of 17 telecom operators after they fail to comply with the license’s obligation and submission of relevant required documents. The inspection finding shows that the operation of those 17 operators is inactive and had no employees. 17 telecom operators are CADCOMMs, Emaxx Telecoms Co Ltd, CN Xinyuan Interconnect, Xnet Co, Saturn Holding Ltd, ATA Telecoms, PPIN Internet, HT Networks, Aerospace Information (Cambodia) Technology, Lim Heng Group Co, TPLC Holdings, DG Communication, DTV Star, Kingtel Communication (only VoIP license revoked), Asia Star Resources Investment Holding (position and navigation license revoked) and DBKtel (suspension of internet services provider’s license). (Khmer Times).
Gov’t approves over $830m worth of electricity projects. More than $830 million worth of electricity infrastructure projects including a 150MW hydropower dam, a 265MW coal fired power station and 3 transmission lines were approved. The 150MW Stung Tatai Leu dam will be built on the upper reaches of the Tatai River in Koh Kong province by the China National Heavy Machinery Corp (CHMC) at a cost of $389.4 million under a Build-Operation-Transfer [BOT] 39-year concession scheme, including four years for construction and 35 years for business operation. A final registration certificate is granted to Oddormeanchey Power Industrial Co Ltd (OPI) for its $294.3 million 265MW coal-fired power station in O’Svay commune’s Chheuteal Chrum village in Oddar Meanchey province’s Trapaing Prasat district. Three projects of a 230kV transmission line, a 199.52km long 500kV transmission line, and a 107km long 500kV transmission line also received approval. These investment projects will contribute to the government master plan in meeting electricity supply needs. (Phnom Penh Post).
OCIC set to spend $2.5B on the capital’s satellite city. The local company Overseas Cambodian Investment Corp Ltd (OCIC) announced the plan to invest $2.5 billion to develop the Koh Norea in southeastern Phnom Penh into a new satellite city at the ground-breaking ceremony of the two monumental bridge projects – one connecting Koh Pich in Chamkarmon district’s Tonle Bassac commune to the Koh Norea Development Zone in Chbar Ampov district’s Niroth commune, and another linking Koh Norea to National Road 1. $550 million of the capital investment will be spent on infrastructure development in the satellite city and $39.6 million on constructing two bridges. OCIC has been building concrete foundations and filling the river bank with stone and sand in preparation for the main infrastructure, bringing the satellite city to 27% completion. (Phnom Penh Post)
Alibaba fintech arm gets a nod for record IPO listing in HK. The financial arm of Chinese e-commerce Alibaba received approval from China Securities Regulatory and Commission for its listing in Hong Kong which is another milestone towards the biggest initial public offering in history. Ant Group aims to raise a massive $35 billion via dual-listing initial public offering (IPO) in Hong Kong and Shanghai. The listing could be the world’s largest IPO, surpassing the record set by Saudi Aramco’s $29.4bn float last December, said Bloomberg. The targeted valuation of Ant Group is around $250 billion. This fintech company runs Alipay, the dominant online payment system in China, where cash, cheques, and credit cards have long been eclipsed by e-payment devices and applications. (Phnom Penh Post).
E-business owners need permits. The Ministry of Commerce has called on e-business owners to apply for permits and licenses to conduct business legally in Cambodia. The e-commerce law aims to regulate electronic businesses and enable local small and medium-sized enterprises to integrate into value chains linked to domestic and international markets. It outlines the documentation and procedures required to obtain e-commerce permits and business licenses which are valid for two and three years respectively from the issuance date. The permits and licenses requirement does not apply to sales of goods or services with turnover less than the limit of the small taxpayer, sales of goods or services that is pure of one’s personal artistic work, sale of goods or services that is of a family nature or is seasonal, booking of services that do not require any deposit or payment by customers or users, commercial marketing of goods or services including advertising for sale-purchase that is not an offer for formation of a contract, private tutoring, training or education of the national religion, training by non-profit organizations and state institutions’ operations in the provision of public services. (Phnom Penh Post).
Non-performing loans rise but only by a slight margin. The banking sector is still healthy with manageable non-performing loans during COVID-19 and recent flooding. According to the president of the Association of Banks in Cambodia (ABC) In Channy, banks are closely monitoring the impact on customers and non-performing loans ratio (NPLs) now are approximately 2% which were around 1.3% before Covid 19. As of October, the financial institutions have provided loan restructuring to more than 280,000 customers involving about $3 billion. On top of this, data from the Cambodia Microfinance Association (CMA) shows that CMA members have restructured loans for 265,000 clients involving $1.3 billion by mid-October. NPLs in the microfinance sector was 2.5% of the total loan in September. (Khmer Times).
NBC to sell $50M in forex intervention. The National Bank of Cambodia (NBC) called for licensed banks, microfinance institutions (MFIs), and money changers to join a $50 million foreign exchange (forex) intervention auction. “The minimum bid amount will be announced on the morning of the actual bidding date,” said NBC. Due to the economic slump caused by Covid-19, Foreign exchange rates have seen substantial currency fluctuations within the region. NBC has decided to intervene in the exchange rate with the auction in order to reinforce the purchasing power of the riel, maintain price stability, and stabilize the macroeconomy. The central bank’s intervention serves to strengthen the vitality of the local currency (Khmer riel) against the US dollar which is now trending at above 4,100 riels. (Phnom Penh Post).
Fiscal revenue growth revised down. The Cambodian government has revised its target year-on-year fiscal revenue growth from the original plan outline in the Revenue Mobilization 2019-2023 of 0.5% to 0.3% of Gross Domestic Product (GDP). Total fiscal revenue collected was recorded at $2.956 billion for the first half of 2020, representing a 0.7% decrease compared with the same period last year. The expected national GDP next year is approximately $27 billion to $30 billion while the estimated total national revenue is around $4.8 billion to $5.4 billion. According to the 2021 approved draft budget of $7.62 billion, the government plans to collect around $5.275 billion in national revenue and borrowing around $1.5 billion from development partners to cover the shortfall. Last year the government set its fiscal revenue target at around $4.56 billion, however, it was able to exceed this target and earn $6.04 billion, representing more than 22% of Cambodia’s 2019 national GDP. The new Revenue Mobilization Strategy 2019-2023 launched in June last year is a roadmap for inter-related ministries to follow in order to make revenue collection more efficient and effective, with integrity and credibility. (Khmer Times). Bilateral trade with Thailand down 19% in the first nine months. Bilateral trade between Cambodia and Thailand was worth $5.569 billion in the first nine months of 2020. It indicates a decrease of 19% compared to the same period last year, based on data from Thailand’s Ministry of Commerce. Cambodian exports to Thailand were to the tune of $958 million while imports worth $4.611 billion. Trade between the two countries had been strained due to border restriction as a result of Covid 19. In 2019, trade volume between the two countries was to the tune of more than $9.41 billion, increasing 12% from $8.38 billion in 2018. The majority of Cambodia’s exports to Thailand comprise gemstones, jewelry, agricultural products, and aluminum. Cambodia’s imports from Thailand mainly consist of fuel, motorcycles, cars, gemstones, and jewelry. (Phnom Penh Post).