Cambodia's Financial Environment
Cambodia Weekly Financial News
2023-12-16View Times｜ 1093
Cambodia Weekly Financial News
December 11 ~ 15, 2023
11 December 2023
Ministry of Economy to raise $6.8M through sovereign bond issuance
The Ministry of Economy and Finance plans to raise approximately 28 billion riels ($6.8 million) through the issuance of sovereign bonds via the National Bank of Cambodia’s (NBC) online trading platform (NBCP), aiming to garner additional funds from the capital market for public investments. At the Cambodia Securities Exchange (CSX) on December 7, the ministry announced that it will issue 28,000 bond units, each with a nominal value of one million riel ($242.82) and a maturity period of two years, from 2023-2025. The bonds will carry a coupon rate of 4% per annum, with semi-annual coupon payments. In mid-January, the ministry announced plans to sell a sovereign bond worth 813 billion riel ($192.3 million) in 2023, to be issued in several tranches. The statement further detailed that the bond would be available in one-, two-, three-, five-, 10- and 15-year terms, with new issuances every four weeks.
Source : The Phnom Penh Post
11 December 2023
Strategic debt management supports growth
Cambodia signed concessional loan agreements with development partners for nearly $230 million in Q3 2023. This increased public debt to more than $10 billion, of which over 99% is foreign, with the country paying off more than $190 million in obligations during the period. According to the Cambodia Public Debt Statistical Bulletin released by the Ministry of Economy and Finance last weekend, the country’s total debt stock at the end of Q3 2023 stood at $10.72 billion. The sum consists of 99.5% public external debt (approximately $10.67 billion), split between 64% from bilateral Development Partners (DPs) and 36% from multilateral DPs. The remaining 0.5% (about $51.99 million) is public domestic debt. The bulletin further detailed the composition of public debt stock: 47% in US dollars, 20% in Special Drawing Rights (SDR), 11% in Chinese yuan, 11% in Japanese yen, 7% in euros and the remaining 4% in local and other currencies. Finance minister Aun Pornmoniroth previously stated that the country’s current public debt situation is manageable and considered “sustainable” and “low risk”, despite challenges posed by the Covid-19 crisis and other external factors.
Source : The Phnom Penh Post
11 December 2023
NBC committed to promoting sustainable financing, says Serey
The National Bank of Cambodia (NBC) is committed to promoting sustainable financing, which has been categorized as one of the key priorities within the first phase of the Pentagonal Strategy, its Governor Dr Chea Serey said on Friday. A memorandum of understanding (MoU) was also signed on the sidelines of the conference between NBC and the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) to promote Cambodia’s sustainable finance roadmap. “The NBC has been collaborating with many international agencies including ESCAP to promote green financing amid Cambodia being considered as one of the most vulnerable countries to climate change impacts.” Dr Philip Schellekens, Chief Economist UNDP Regional Bureau for Asia and the Pacific said the central bank can effectively play an important role in the journey towards becoming a green economy, considering the fact that it is the custodian of financial stability, vested with many regulatory powers. The economist added that green transition can also cause an upward spiral of opportunities and prosperity.
Source : Khmer Times
12 December 2023
Cambodia-France move forward on Double Tax Agreement talks
The General Department of Taxation (GDT) formally entered the first round of negotiations on the ‘Cambodia-France Agreement for the Elimination of Double Taxation with Respect to Taxes on Income and the Prevention of Tax Evasion and Avoidance,’ in a meeting with representatives of the French finance ministry at the GDT headquarters recently. A Double Taxation Agreement (DTA) is being sought by both parties to enhance business and investment flows between the two nations and create additional predictability for French investors in terms of transfer tax pricing. Bun Neary, deputy director-general of the GDT, and chair to last Thursday’s negotiations, said in a department press release that, “we firmly believe that the Cambodia-France DTA will serve as a new instrument to bolster bilateral tax cooperation and stimulate investment between the two nations.”
Source : Khmer Times
12 December 2023
Cambodia’s exports touch $20.5 billion in Jan-Nov
Cambodia’s exports topped $20.49 billion in the January-November period of this year, inched up by 1.2 percent compared to the same period last year, a General Department of Customs and Excise report said on Monday. The top five export destinations for Cambodia during the period were the United States, Vietnam, China and Thailand. The US remained Cambodia’s biggest market during the first eleven months of this year with exports worth $8.14 billion, a 0.9 percent decrease recorded in the same period a year ago. Exports to Vietnam rose 37.8 percent to $2.61 billion, from $1.89 billion while exports to China also increased 18.5 percent to $1.31 billion, the report added. “Our strategy is to have the government and the private sector work together to set goals to boost exports of Cambodian products to foreign markets,” the Prime Minister said at a get-together with garment workers held recently. Cambodia’s total imports came down by 5.4 percent to $22 billion, read the report.
Source: Khmer Times
12 December 2023
Cambodia leads FDI growth in SE Asia
Cambodia stands at the forefront of foreign direct investment (FDI) in Southeast Asia, anticipating a robust influx of capital in 2024, buoyed by a solid economic recovery. The International Monetary Fund (IMF) projects the country’s growth to reach 6.1% next year. Chea Vuthy, deputy secretary-general of the Cambodian Investment Board (CIB) and the Cambodian Special Economic Zone Board (CSEZB) emphasized He added that Cambodian investors took the lead in the first half of the year, buoyed by confidence in the country’s investment climate and “trust in its leadership”. For capital investment, the first six months of 2023 saw 128 projects valued at $1.3 billion, compared to 111 projects worth $3.1 billion in the same period of 2022, as per the CDC. The IMF revised its growth estimates for Cambodia from the April prediction of 5.8% to 5.6% for this year, with the 2024 forecast reduced from 6.2% to 6.1%.
Source: The Phnom Penh Post
13 December 2023
Vietnam, Cambodia promote cooperation in industry and trade
Minister of Industry and Trade Nguyen Hong Dien on December 12 held a working session in Hanoi with Cambodian Minister of Commerce Cham Nimul and Minister of Industry, Science, Technology and Innovation Hem Vanndy, on the occasion of an official visit to Vietnam by Cambodian Prime Minister Hun Manet. The two sides agreed that bilateral cooperation in trade and industry has made noteworthy progress in the recent past. In 2022, Vietnam – Cambodia trade turnover grew nearly 11% from 2021 to reach nearly $11 billion of the figure, Vietnam’s exports to Cambodia stood at 5.75 billion USD, up 19% year-on-year while imports from Cambodia reached 4.82 billion USD, an increase of 2.48%. The two sides agreed on several measures to promote economic – trade and industrial cooperation between the two countries, aiming for higher trade turnover in the coming time through reviewing, supplementing and signing new legal frameworks relating to trade. They also pledged to strengthen coordination and exchange information to fight cross-border smuggling, enhance the exchange of experiences to improve the business investment environment as well as policies to attract investment in the field of industrial production in Cambodia.
Source: Khmer Times
13 December 2023
Cambodia planning $100M in bond issue
The government plans to issue a $100 million sovereign bond in 2024. The move aims to raise additional funds through the capital market to support public investment projects, while also repaying the principal and interest of previous issuances. Meas Soksensan, secretary of state at the finance ministry, said previously that the government issued bond offerings of $200 million in 2023 and $300 million in 2022. “The funds raised through the capital market will finance investment projects that can generate direct and rapid revenue. This ensures the sustainability of public investment and the efficient management of public debt and the national budget,” the FML stated. Soksensan explained that, initially, sovereign securities could only be purchased in the primary market by entities such as banking and financial institutions, securities and insurance companies, the National Social Security Fund (NSSF) and similar organisations. “Other investors, including the public, will soon be able to invest in sovereign securities on the secondary market, a development the [ministry] is eagerly anticipating,” he added.
Source: The Phnom Penh Post
13 December 2023
Gov’t disburses $1.18 billion on infrastructure in Q3
The government has disbursed some $1.18 billion from existing concessional loans for spending on infrastructure building and priority sectors, bringing the public debt to $10.72 billion, according to a report from the Ministry of Economy and Finance. Forty-two percent of the disbursement is from the bilateral developing partners while 58 percent is from multilateral developing partners, according to the report “The actual disbursement from Q1 to Q3 2023 increased by approximately 8 percent compared to the same period last year,” according to the report.
Source: Khmer Times
14 December 2023
Cathay United Bank Cambodia (CUBC) Corporation Limited
vastly expands access to consumer financing services
Cathay United Bank (Cambodia) Corporation Limited (CUBC), a subsidiary of Taiwan’s most significant financial group, Cathay Financial Holding, is expanding its local consumer financing services by partnering with Southeast Asia’s leading fintech company TrueMoney. The partnership greatly enlarges CUBC customers’ access to cash service points in Cambodia, enabling them to make deposits and withdrawals at more than 10,000 TrueMoney points nationwide, effective immediately. In recent years, CUBC has embraced digital finance as the key to advancing its consumer financial services, as laid out in its strategic development goals. The bank is also actively exploring collaborations with local businesses such as TrueMoney to enhance its digital finance offerings continuously. This collaboration further enhances the customer experience by only requiring the CUBC account number, account name, and phone number to make a deposit. Customers can also withdraw money by using the App at one of these service points.
Source: Khmer Times
14 December 2023
Gov’t raises $44 million from bond issuance
The government has raised as much as $44.6 million by issuing government bonds during the first three quarters of the current year, which constitutes 23 percent of the planned budget, the Ministry of Economy and Finance report showed on Wednesday. During the third quarter of 2023, the government issued securities for a total amount of KHR 64 billion equivalent to $15.53 million, the report said. Government bonds are considered to be low-risk investments, as they are backed by the government. Government bonds have been planned to be issued through a second platform called the Government Securities Auction Platform (GSAP), under the Cambodia Securities Exchange (CSX). In 2023, the government decided to issue bonds worth $200 million for the first time. Cambodia’s public debt stood at $10.72 billion by the end of the first half of the year, according to a report.
Source: Khmer Times
14 December 2023
$1.5B investment from EU to power Kingdom’s growth
Between 1992 and 2023, the EU provided over $1.5 billion in collaborative financing, which has supported the implementation of major projects in the agricultural, environmental, industrial, educational and trade sectors, as well as the private sector. Chhieng Yanara, second vice-president of the Council for the Development of Cambodia (CDC), met with EU ambassador to Cambodia Igor Driesmans on December 12, according to a CRC press release. He also discussed the Joint European Strategy for Development Cooperation with Cambodia (2021-27), the EU Multi-Year Program 2021-27 and the Team Europe Initiative, as well as the EU’s vision of continued future collaboration. “We provided $88 million in collaborative financing in 2023, which has supported the implementation of many major projects,” he added. Yanara expressed his gratitude to the EU for its continued commitment to support Cambodia, especially through the achievements of their joint agreements. He noted that these programs have made a significant contribution to the Kingdom’s socio-economic development.
Source: The Phnom Penh Post
14 December 2023
70% green energy by 2030: Gov’t
Cambodia aims to increase its renewable energy share to at least 70% by 2030, contributing to environmental goals and economic growth, with a particular focus on energy efficiency. Minister of Mines and Energy Keo Rattanak said “As we produce more electricity from renewable sources, we see the true benefits of [sustainable energy]. This includes greener buildings, appliances, electric vehicles and the electrification of industry and agriculture,”. “This necessitates focusing on battery storage, extending the grid and adopting smart grid technologies. These are crucial for generating renewable energy and ensuring a stable, sustainable energy supply in the future. Although these objectives may appear distinct, they are interconnected, with each one’s success dependent on the others,” he explained. “Cambodia aims to not only meet its needs but also to explore exporting clean energy, particularly to neighboring countries like Singapore,” he added.
Source: The Phnom Penh Post
15 December 2023
Gov’t clarifies stand on Vingroup’s electric taxi bid
Amid reports of Vingroup, a Vietnamese-based company, planning to operate electric taxi service in the Kingdom in early 2024, a spokesperson of the Royal Government of Cambodia (RGC) yesterday released a statement saying, “Prime Minister Hun Manet has nixed plans requested from the Vietnamese company.” Speaking to Khmer Times, Pen Bona, spokesperson of the RGC said, “I would like to clarify that the Vice Chairman of Vingroup has made a proposal that he intends to invest in Cambodia, but the Premier did not allow or issue approval. It was just a request.” The RGC statement was issued in response to the news that appeared in some media outlets that a Vietnamese company got approval to start an operation of electric taxis with 2,500 cars across Phnom Penh, Siem Reap and Preah Sihanouk provinces early next year. Prime Minister Hun Manet did not provide any instruction to allow Vingroup’s proposal to run its operation in the country, said the statement.
Source: Khmer Times
15 December 2023
GDT eyes over $4 billion in tax revenue next year, says Vibol
The General Department of Taxation (GDT) is targeting $4.162 billion in 2024, which is a 20 percent increase from the target set for the current year, according to Kong Vibol, Minister Attached to the Prime Minister and Delegate of the Royal Government In-Charge as Director-General of the GDT. He said the tax collection mechanism has been facing a lot of challenges in the country beginning with the advent of the pandemic. “The pandemic season in the country saw many businesses closing adversely affecting the tax collection systems. Vibol said the basic principles of revenue mobilization strategy were enforcement, professionalism, efficiency, integrity, respect and flexibility. Cambodia passed a new law on taxation that became effective on May 16, 2023. The new law has four objectives: to minimize tax leakage arising from transactions that were not subjected to tax under former laws and regulations, provide incentives to sectors that hold the key for the nation’s future economic prospects and enforce strict penalties for non-compliance or tax evasion.
Source: Khmer Times
15 December 2023
Chief Bank signs bancassurance MoU with Forte Life Assurance
In a welcome news for both the banking and insurance sectors, Chief Bank, which marked its 10th anniversary of operations in the country, signed a bancassurance partnership memorandum of understanding (MoU) with Forte Life Assurance. The MoU was signed between Dr Soeung Morarith, Chief Executive Officer (CEO) of Chief Bank and Prou Sythan, CEO of Forte Life Assurance at the VIP Lounge of PH Euro Park on Saturday evening. Speaking at the event, Dr Soeung Morarith said Chief Bank is pleased to partner with Forte Life Assurance, one of the largest insurance companies in the country, to contribute towards the development of the sector in Cambodia.
Source: Khmer Times
Lady Aegies Comment : To be continue...............
