Biweekly News Collection No.19

No.19 (Oct 28, 2020)

Market trends

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).

Market Deals

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).

Biweekly News Collection No.18

No.18 (Oct 16, 2020)

Market Industry Trends

Rubber export is up but prices still remain elastic. Cambodia exported 179,621 tons of rubber in the first nine months of 2020, a jump of 3.78% from the same period last year. The average selling price of latex increased to $1,266 per ton in September, a decrease of $64 per ton compared to September last year. The local purchase price of rubber in the first nine months is between 4,100 riel per kilogram for latex and 1,900 to 2,350 riel per kilogram for frozen latex. The rubber plantations in Cambodia account for a total of 403,195 ha. In 2019, Cambodia exported 282,071 tons of rubber worth $377 million, an increase of 30% from 2018. According to a report by Research and Markets, latex prices are expected to fall this year until 2021. China has the highest demand for rubber in the world, accounting for 41% of the world’s total rubber production. (Phnom Penh Post).

Smart kicks in $1 million to educate SMEs. The leading mobile operator in Cambodia, Smart Axiata donated $1 million to Impact Hub Phnom Penh to launch an online education program for local entrepreneurs to overcome Covid-19 challenges. The free online course is designed to teach entrepreneurs regarding additional funding, engaging customers, and remodeling financial plans in order to improve business and build resilience in their company. The online classes are available on Impact Hub’s website and entrepreneurs can join any time at no cost. As a result of the pandemic and market changes, many small and medium enterprises (SMEs) face new challenges of digitization economy and liquidity. According to Impact Hub, business owners can access different online modules with various case studies and participate in monthly online group calls with other entrepreneurs. (Phnom Penh Post).

PPAP records positive business performance in the first three quarters. Stock listed Phnom Penh Autonomous Port (PPAP) posted positive business performance in the first nine months of this year in the face of headwinds created by the Covid 19 which lead to a global and regional economic downturn. The state-owned river port operator reported $22.26 million in revenue in the period between January-September, a 2.56% increase from the same period last year.  It posted a 4.09% year-on-year rise in the volume of containers and a 0.63% year-on-year rise in the number of cargo vessels handled at the port during the period. However, there is a 2% fall in cargo and fuel oil throughput, a 52% drop in passenger boats, and a 54.65% decrease in passengers. Although the trading between countries has been reduced, the port business operation still remains strong. (Phnom Penh Post)

Market Deals

PPCB to issue the second round of bonds. South Korea-owned Phnom Penh Commercial Bank Plc (PPCB) officially announced its phase 2 bond offering on the Cambodia Securities Exchange (CSX) to raise another KHR 40 billion (approximately $10 million) with a maturity of 3 years and a coupon rate of 6.5% per annum payable on semi-annually basis. PPCB successfully raise $10 million from bond issuance during the first phase in late April. The second phase bonds obtained approval from the Securities and Exchange Commission and fully subscribed on September 21. The bank will list these bonds for trading on the CSX on October 9. (Phnom Penh Post).


Cambodia, China trade deal. Cambodia and China signed a free trade agreement (FTA) on 12th October at a ceremony attended by the Chinese Foreign Minister. The FTA listed around 340 more commodities in addition to what Cambodia has received from the ASEAN-China FTA.  According to the Ministry of Commerce, most of the commodities are in agriculture and agro-processing including pepper, chilis, pineapples, vegetables, fruit, fish, meat (including processed), grain, crabs, seafood, and a variety of canned products. Among the additional 340 commodities in the Cambodia-China FTA, 95% of them will be tariff-free. Taxes on the remaining 5% will be dropped in at least 10 years. The trade deal between Cambodia and China is expected to boost agro-processing and investment in the agriculture sector to capitalized benefits from the agreement.  (Phnom Penh Post).

Cambodia-US trade up 15% in the first 8 months. Bilateral trade between Cambodia and the US was recorded at $4,294 billion in the first 8 months of 2020, a year on year increase of 15.6%. Cambodia exported $4,096 billion worth of products to the US from January to August, a rise of 22% compared to the same period last year. The total imported goods from the US is $355 million, a decline of 44% year-on-year. Cambodia mainly exported textiles, footwear, travel goods, and agricultural products to the U.S. and imported vehicles, animal feed, and machinery. Last year, the bilateral trade between the two countries reached $5.8 billion, a year-on-year increase of 37%. (Khmer Times)

IMF sees Cambodia as ASEAN fastest growing economy in 2025. According to World Economic Outlook released by the International Monetary Fund, the economic growth forecast for ASEAN in 2021 shows Malaysia as the fastest economy recovery of 7.8% followed by the Philippines 7.4%, Cambodia 6.8%, and Vietnam 6.7%. Among the other ASEAN economies, slower growth is forecast for Indonesia 6.1%, Myanmar 5.7%, Singapore 5%, Laos 4.8%, Thailand 4%, and Brunei 3.2%. The IMF’s mid-term projections for 2025 show Cambodia outpacing its peers with a growth forecast at 6.9%, making the country the region’s fastest-growing economy. Slower growth is forecast for Vietnam 6.6%, Myanmar and the Philippines 6.5%, Laos 6.1%, Indonesia 5.1%, Malaysia, 5%, Thailand 3.7%, Singapore (2.5%), and Brunei 1.8%. (Khmer Times)

New draft law on investment mulled. The new draft law on investment is under discussion by the government and the relevant private sector. The new law will be applicable for all qualified investment projects (QIP) and their expansion that are granted. Industries to receive incentives can include high-tech industry, innovation, research and development, new manufacturing that provides added value, and industries that serve the regional and global value chain. Supportive industries such as agriculture, tourism, manufacturing, electronics, spare parts, assembling and installation, mechanical and machinery, agro-processing and food processing, tourism, special economic zone development, digital, education and vocational training, logistics, health, and green investment will all receive the incentives. The QIP project will receive an exemption from income tax for three to nine years based on the sector and investment activities after a first profit is disclosed. Those QIP projects will be encouraged to pay the tax reduced by 25% for the first two years, 50% for the next two years, and 75% for the last two years.  A QIP also receives additional exemption on value-added tax for purchasing raw materials serving local production. The main aim of this new investment law is to improve the investment environment and enhance the country’s competitiveness. (Khmer Times)

Biweekly News Collection No.14

No.14 (January 12, 2020)

Market Industry Trends

Firm set to launch 150MW solar power plants in Kingdom. Jinkosolar Holding Co Ltd has announced it is to supply photovoltaic panels for three solar power plants in Cambodia with a combined capacity of 150MW. Cheetah solar panels will be installed at two photovoltaic power stations in Pursat province’s Krakor district, with capacities of 60MW and 30MW. The third plant, with a capacity of 60MW, will be located in the central province of Kampong Chhnang. The three solar parks will be built in line with the government’s efforts to meet the country’s growing energy demand. Ministry of Mines and Energy spokesman Victor Jona told The Post. He estimated that the solar panels for the three projects were worth some $1million. “These projects are planned to be completed by the end of this year.”At the presentation of Cambodia’s 2020 energy vision last July, Electricite du Cambodge (EdC) director-general Keo Rattanak said Cambodia will expand solar energy investment by 12 % by the end of this year, and increase it to 20% over the next three years. He said the power generated would be used to meet increasing electricity demands in the industrial and commercial sectors. “We want to set up solar power plants in many locations. We believe solar power will provide lower prices.” Meanwhile, a $58 million 60MW solar power plant – a collaboration between JinkoSolar and SchneiTec Group – is under construction in Kampong Speu province. Electricity demand in the Kingdom is expected to increase from 1.5GW to 2.3GW this year, with it reaching 2.8GW next year. In January 2018, Cambodia issued new rules for the integration of solar power. The Kingdom’s electricity demands are currently covered by hydroelectricity and coal power, accounting for around 48% and 47% of generation, respectively. Jona said 150MW of electricity from the Don Sahong Dam in Laos was connected to Cambodia’s national grid on January 7, 2020. (Phnom Penh Post.)

Acleda Bank set to hold three-day listing event. Acleda Bank Plc (Acleda Bank) is to hold a three-day event to inform potential investors of the commercial bank’s viability ahead of its listing on the Cambodia Securities Exchange (CSX) later this year. Acleda Bank received principal approval after a Securities Exchange Commission of Cambodia (SECC) review, laying the foundations for CSX listing by late first quarter or early second quarter of this year. It became the first commercial bank to receive principle approval for its initial public offering (IPO), while Phnom Penh Commercial Bank Plc (PPCBank) was the first South Korean commercial bank to achieve the same benchmark. Acleda Bank executive vice-president Buth Bunsayha told The Post on that the bank will hold the event on January 10, 15 and 18, with it “a good opportunity to meet the public and investors”. She said it would allow Acleda Bank to begin its book-building process to determine demand. CSX total market capitalisation could triple with the Acleda Bank IPO, he added. According to the SECC, market capitalisation increased 157 per cent to $800.39 million last year. There are currently five firms listed and trading securities on the CSX, while three financial institutions are listed on the exchange’s corporate bond market. The number of investors increased to 22,338, with 17 per cent of them foreign. Average trading volume was 1,750,502 shares per month, equal to $4,221,490 per month. (Phnom Penh Post.)

PAS revenue shoots up 17.5% last year. The total revenue of Cambodia Securities Exchange (CSX)-listed Sihanoukville Autonomous Port (PAS) shot up by 17.5% last year, indicating strong growth in its year-on-year business performance. An annual report from the Ministry of Public Works and Transport released on Wednesday said the Port’s total revenue reached some $80 million last year, an increase of 17.5% compared to some $68 million in 2018. Jong Weon Ha, a marketing strategist and CSX’s chief operating officer said PAS’ growth will provide a positive impact to the port’s securities trading and will attract more investors. The ministry’s report also said the number of containers handled at the port also increased by 17 per cent, reaching a total of 633,099 twenty-foot equivalent units (TEU) by the end of last year compared to 541,228 TEUs in 2018. Total tonnage handled by the ports also increased by 22.6% and reached more than 6.5 million tons compared to some 5.8 million tons in 2018, while the total number of vessels to call at the port rose 15.5% at 1,661 units compared to 1,451 unit in 2018. (Phnom Penh Post.)

Cassava exports grow 27% last year. Cambodia exported 3.29 million tonnes of cassava in 2019, up 27% from 2018’s 2.59 million tonnes, a report of the responsible ministry said. The Minister of Agriculture, Forestry and Fisheries Veng Sakhon wrote via Facebook that the Kingdom’s export of agricultural products reached more than 6.93 million tonnes, which he estimated to be worth more than $1.9 billion. Battambang provincial Department of Agriculture, Forestry and Fisheries official Heng Seth told The Post on Thursday that cassava was grown on 112,543ha in the province last year, producing more than 2.8 million tonnes. “Farmers have currently harvested around 40 per cent of total cassava planted. The price of cassava in the province was around 270 riel [$6.6 cents] per kilogramme early this year,” Seth said. A UN Development Programme report said a public investment package of some $296 million is needed for the development of the Kingdom’s cassava sector, citing a lack of focus on domestic processing. The report said Cambodia’s main cassava export destinations are Thailand, Vietnam, China, the Netherlands, the Czech Republic, Canada, Italy, India and Pakistan. Ministry of Commerce data shows that Cambodian cassava exports were worth $17.8 million in 2017, but fell to $12.6 million in 2018. (Phnom Penh Post.)

Corn industry maintains hope for rebound amid plummeted prices. Total corn exports dropped by more than 40 per cent on 2018 due to last year’s drought and pest damage, industry insiders said. Ministry of Agriculture, Forestry and Fisheries data showed that last year the Kingdom exported 119,993 tonnes of red corn – down 41.23 per cent on 2018’s 204,184 tonnes. The exports were mostly to Thailand, Vietnam and Taiwan, according to the data. Corn grower Sok Leng told The Post from Battambang province’s Sampov Loun district that her harvests had halved from 2018 – down to slightly more than 10 tonnes last year from more than 20 tonnes. “Some farmers gave up on the crop last year due to the sharp decrease in yield and prices,” she said. However, she said she continued to grow the crop as she was hopeful of a rebound this year. Most of the Kingdom’s red corn is grown Battambang, Pailin, Kampong Cham and Tbong Khmum provinces. The crop is planted biannually, with the first harvest taking place from late June to August and the second from late October to December.

Ho Chi Minh City’s EVN to become digital business. Ho Chi Minh City, Vietnam’s electricity sector has set a target to become a digital business by adopting key technologies such as big data, Internet of Things and artificial intelligence (AI) to improve the local power system. Electricity of HCM City (EVNHCMC) deputy director-general Nguyen Duy Quoc Viet said: “Technology has drastically changed the power industry. The group is applying advanced technologies to improve production and business activities, enhance labour productivity and reduce costs.” It has adopted state-of-the-art equipment and technologies in power system management and operations, including implementation of hydrological forecasting software, remote controls, and unmanned substations in 110kV-220kV grid systems, he said. The group is also striving to ensure adequate power supply for socio-economic development and environmental protection. (Phnom Penh Post.)

Market Deals

Prince Bank offering perks to companies listed on CSX. The Cambodian Securities Exchange (CSX) and Prince Bank Plc have reached a cooperation agreement for the latter to offer loans and fixed deposit rates for companies listed on the bourse. Prince Bank becomes the third commercial bank to provide the special package for listed firms after Canadia Bank and Bank of Investment and Development of Cambodia launched the services last March. (Phnom Penh Post.)

SECC and MKE Group ink MoU to develop capital market. Securities Exchange Commission of Cambodia (SECC) and Maybank Kim Eng Group (MKE Group) will cooperate to build strong regulatory frameworks and a sound ecosystem to attract more investors and develop the capital market in Cambodia. The MoU is about Cooperation and Technical Assistance Framework between the two. MKE Group, within which is also Maybank Kim Eng Securities, is an award-winning stock and derivatives brokerage firm with over 40 years of experience in Asia. (Phnom Penh Post.)


Cambodia attracts US$3.6bil FDI in 2019, 43% from China. Cambodia attracted foreign direct investment (FDI) worth nearly US$3.6bil in 2019, up 12% year-on-year, an English-language daily reported on Friday (Jan 10). 43% of last year’s FDI came from China, as 11% from South Korea, 7% from Vietnam, 6% from Singapore, 6% from Japan, and the rest from other nations. The report of NBC forecast that the inflow of FDI into the country will rise 10% in 2020, reaching US$3.9bil. (Cambodia Daily).

Cambodians seeking to invest more abroad. Cambodia’s outward direct investment declined 13.45% during the first nine months of 2019 compared to the same period in 2018, the National Bank of Cambodia’s (NBC) Balance of Payments Statistics Bulletin said on Monday. The report said the investment capital reached $81.38 million during the period – down from $94.03 million year-on-year. However, the capital was worth more than $29.89 million in the third quarter, up 11.98% from $26.69 million in 2018’s third quarter, it said. The report did not identify the countries in which Cambodia invests. In 2018, Cambodian outward direct investment was worth more than $122.9 million, up 7.73% from 2017’s $114.08 million, NBC data shows. Cambodia Chamber of Commerce vice-president Lim Heng said on Thursday that Cambodia’s outward direct investment has increased concurrently with foreign direct investment (FDI) in the Kingdom. Cambodia mainly invests abroad in sectors such as finance, real estate, and construction, and the export-import of goods said Heng. “As far as I know, besides the Lao and Myanmar financial sectors that Cambodians currently invest in, more of the Kingdom’s investors are planning to put money in China’s construction sector,” he said. With an open economy and gradual growth, Heng expressed optimism that Cambodian investments abroad will continue to grow, especially in recently booming economies. “Cambodia also encourages its investors to invest abroad,” he said. Though Cambodians mainly invest in Laos, Vietnam, Thailand, Myanmar, and China, he said, they are seeking investment opportunities in other countries such as Nepal and Bangladesh. (Phnom Penh Post.)

VN Worker shortage a boom for Kingdom’s furniture industry. A shortage of workers in Vietnam – a huge beneficiary of the US trade war with China – is getting severe that some furniture makers are now scouting Cambodia and Bangladesh for factories, said the CEO of Haverty Furniture Co, Clarence Smith. Smith told Bloomberg on Thursday that labour rates in Vietnam are rising and workers are getting increasingly scarce. Haverty Furniture uses Asian factories to make its company-branded products. Even though Asian suppliers continue to source much of the timber they use from the Appalachian region of the US, the manufacturing of wood furniture “is not coming back to the US”, Smith said. Bringing manufacturing jobs back to the US was one of the Trump administration’s stated goals in imposing tariffs on Chinese-made goods. For now, most of the disruption is behind them even if the first phase of the US-China trade deal will keep the 25% tariffs on Chinese-made furniture in place, Smith said. (Phnom Penh Post.)

Vietnam gov’t mulls slashing procedures for starting business. Vietnam is strongly considering cutting the procedures needed to start a business this year in an effort to improve the country’s business climate. This was stressed at a Government Office meeting on Jan 6 to discuss solutions to improve the country’s ranking for starting a business evaluated by the World Bank’s Ease of Doing Business report. Government Resolution No 2 issued on January 1 sets a target for Vietnam to jump up 10-15 spots in the ranking. Vietnam ranked 115th out of 190 economies in facilitating business establishment indicators in 2019, falling 11 spots from 2018, with eight procedures in total. The Government Office plans to submit a proposal to the prime minister to cut the number of procedures by half. (Phnom Penh Post).


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