Cambodia's Financial Environment
Cambodia Weekly Financial News
2023-12-30View Times｜ 1079
Cambodia Weekly Financial News
December 25~29, 2023
25 December 2023
Revenue of Cambodia’s PAS port rises 2.7% YoY in Jan-Nov 2023
Cambodia’s Sihanoukville Autonomous Port (PAS), the nation’s premier international and commercial deep seaport, has reported a significant financial and operational growth in 2023, according to the port’s latest data. The port’s gross revenue for the first 11 months of 2023 surpassed $85 million, marking a 2.7 per cent increase compared to the same period last year. From January to November 2023, the port managed over 7 million tons of containerized cargoes, registering an 11 per cent increase year-on-year. Dr Manet highlighted the port’s current capacity to handle 800,000 TEUs (twenty-foot equivalent units) annually. Looking ahead, he revealed ambitious plans to expand this capacity to 2.5 million TEUs per year by 2029.
Source : Khmer Times
25 December 2023
Cambodia’s local trade finance market estimated at $1.6B
The Kingdom’s local trade finance market currently stands at $1.6 billion and improving access to affordable trade finance could increase imports and exports by up to nine percent, according to the latest study conducted by the International Finance Corporation (IFC). The study, a second in a series of regional trade finance surveys, analyses the regional trade finance ecosystem and provides insights into how importers and exporters can increase international trade with improved support from financial institutions. According to the report, increasing coverage is more important than reducing the cost of trade finance. The function of trade finance is to introduce a third party to transactions to remove the payment risk and the supply risk. Trade finance provides the exporter with receivables or payment according to the agreement while the importer might be extended credit to fulfill the trade order.
Source : Khmer Time
25 December 2023
$150M in loans guaranteed for SMEs by CGCC
As of November 30, the state-owned Credit Guarantee Corporation of Cambodia Plc (CGCC) has issued a total of 1,880 Letters of Guarantee (LG) for loans worth $159.69 million. The guarantees were in support of small- and medium-sized enterprises (SMEs) affected by the Covid-19 pandemic. According to figures released on December 22, the total of outstanding loans equal $113.96 million, with a non-performing loan (NPL) ratio of 5.41. Total claim payouts came to $123,336. The businesses supported included 1,731 micros, small and medium enterprises (MSMEs), and 149 larger firms. “The government considers that the use of the state budget to support financing through the credit guarantee mechanism has the first major advantage of a ‘Leverage Effect’. By using the capital of the CGCC to secure rotating loans, the capital is used only when a secured loan is lost. The state budget of $200 million provided by the CGCC supports the issuance of loans with a far greater value,” Mey Vann, secretary of state at the Ministry of Economy and Finance said.
Source : The Phnom Penh Post
26 December 2023
CamGSM secure $50M for network expansion
Locally-owned and listed mobile provider CamGSM has entered into a facility agreement with Deutsche Bank Ag’s Singapore branch, securing a $50 million loan to fund its network expansion. According to a December 26 filing to the Cambodia Securities Exchange (CSX), Deutsche Bank will provide $50 million, with a 10-year loan period from 22 December 2023 to February 1, 2034. Hong Sokhour, CEO of the CSX, told The Post on December 26 that although the company is listed, they still can take financing or loans from any source to support their business’s growth. “Of course, I don’t deny that an increase in debt of any listed companies will pose some risk for shareholders and investors. This increased debt is used for their business expansion, so their revenue will increase,” he explained. According to the CSX, with the loan, CamGSM’s total debt-to-equity ratio is 182.07%.
Source : The Phnom Penh Post
26 December 2023
GDCE sees customs miss revenue target
The General Department of Customs and Excise (GDCE) expected to see customs revenue behind the target of budget plan 2023, citing the loss in customs income due to the implementation of trade pacts. The GDCE planned to collect 11,137 billion riels (nearly $2.7 billion) in 2023. “The General Department of Customs and Excise projects the income on customs about 82 to 83 percent of the target set in 2023 due to the implementation of various free trade agreements such as the RCEP and bilateral free trade agreement,” said its Director-General Kun Nhim at a forum on Monday. After Cambodia implemented various free trade agreements such as the RCEP, the Free Trade Agreement between Cambodia and China, and the Free Trade Agreement between Cambodia and Korea, the country has lost $400 million in customs income, he said. Despite a loss of customs tax revenue from preferential tariff rates under free trade agreements, Cambodia attracted more new investment, created jobs for people and increased exports, contributing to national income, he further said.
Source: Khmer Times
26 December 2023
Trade hits $1.05B as Cambodia-Korea FTA completes one year
Bilateral trade between Cambodia and South Korea has reached $1.05 billion as both countries mark the first year of the Free Trade Agreement (FTA). According to reports, Cambodia is all set to receive more Korean investments with bilateral ties scaling new heights. With South Korea agreeing to remove tariffs on 95.6 percent of products imported from Cambodia, and Cambodia to axe duties on 93.8 percent of imported goods, trade between the two countries has hit new levels. In terms of foreign direct investment (FDI) from the Republic of Korea, the Council for the Development of Cambodia (CDC) has registered 219 Korean investment projects worth $5 billion as of 2022, a large part of which were construction and real estate projects.
Source: Khmer Times
27 December 2023
Ministry of Commerce collects over $ 13 million in 11 months 2023
The Ministry of Commerce confirmed that in the first 11 months of 2023, the Ministry collected 53,578.1 million riels, equivalent to about 13 million dollars. The revenue achieved by the Ministry of Commerce is equal to 102.9 percent of the 2023 budget law, amounting to 52,482 million riels. This is according to the report summarizing the business performance in 2023 and the business direction in 2024 of the Ministry of Commerce. According to the report, the main sources of revenue of the Ministry of Commerce are: the issuance of certificates of origin is more than 26,513 million riels, business registration and other related services are more than 15,381 million riels and other related fees. At the same time, the Ministry of Commerce also confirmed the expenditure of the Ministry in the first 11 months of 2023 is 90,469.8 million Riels, equivalent to about 22 million dollars.
Source: Cambodia China Times
27 December 2023
Ministry logs new 201 factories in Jan-Nov period
The Ministry of Industry, Science, Technology, and Innovation Cambodia has registered 201 new factories in the January-November period this year, bringing the total number of factories to 1,968, according to the Ministry of Industry, Science, Technology, and Innovation. The figures increased by 24.8 percent compared to 161 new factories registered in the same period last year. “As of November 2023, there are a total of 2,089 factories with a total investment of $17,914 million,” the ministry’s Secretary of State Heng Sokkhung said at an annual meeting of the Ministry of Commerce held on December 21. The industrial sector has played an important role in Cambodia’s economic development, he said. “From 1993, the industrial sector shared only 13 percent of the country’s GDP and in 2023, the sector will expectedly share about 41percent of GDP,” he said. The number of new factories opened reflected the potential of the manufacturing sector to attract investors, helping the country’s economy return to normal, he said.
Source: Khmer Times
27 December 2023
CSX Fun Run achieves ‘milestone’
The Cambodia Securities Exchange (CSX) said the recent “Run for Cambodian Children” event, which it organized in collaboration with a prominent local developer, marked a “significant milestone” in its annual environmental, social and governance (ESG) campaign. The December 23 event aimed to achieve four key objectives: Promote sports and charity, raise funds for the Kantha Bopha Foundation of Cambodia, provide networking opportunities and disseminate information about the securities market. Hong Sokhour, CEO of the CSX noted that the stock exchange functions as a public institution, playing a dual role. Firstly, it helps companies secure capital from the public to fuel business expansion. Secondly, it aids the public in earning additional income through stock investments. He also stated the CSX’s role in championing the ESG movement to promote sustainable development. The event raised a total of $7,777, to be donated to the Kantha Bopha Foundation.
Source: The Phnom Penh Post
28 December 2023
Private school operator listed on Cambodia’s stock market
Private school operator CIA First International School Co Ltd made its debut on the Cambodia Securities Exchange (CSX) on Wednesday after an initial public offering (IPO) raised some $10 million for their business expansion. CIA First International School became the 11th bond-listed firm that issued its IPO on Cambodia’s bourse. The school issued its IPO at $10 million with a coupon rate of 6.3 percent per annum and a 5-year maturity date. Currently, the school has three campuses in Phnom Penh with more than five thousand students and currently, the school is building its fourth campus in the capital, scheduled to operate in 2025, Ly said. He said some 2,297 investors had purchased the firm’s IPO shares.
Source: Khmer Times
28 December 2023
Adapting and advancing amid economic shifts in Kingdom’s microfinance sector
Amid the global and regional economic uncertainty stemming from the ongoing Russia-Ukraine war and the headwinds of geopolitical issues between superpowers, Cambodia’s financial sector remains resilient to external factors. According to data from the Cambodia Microfinance Association (CMA), by the end of the third quarter of 2023, the sector had a total loan balance exceeding $5 billion, with more than 1.5 million loan customers. At the same time, deposit-taking microfinance institutions (MFIs) held over $2 billion in deposits with nearly 2 million depositors. The financial services sector provides services to both individual and corporate customers. This segment of the economy comprises various financial firms, including banks, MFIs, leasing companies, credit operators and insurance companies. According to the National Bank of Cambodia’s (NBC) semi-annual report for 2023, the loan portfolio increased by around 4.9% by June this year compared to the end of 2022, while customers’ deposits saw an increase of around 3.1%. Overall, the situation remains tight for businesses and individuals as Cambodia, along with the world, faces economic recession and is just recovering from Covid-19. However, with a clear strategy and robust support from all regulators, especially the NBC and the government, the industry’s performance has remained secure, safeguarding our customers.
Source: The Phnom Penh Post
28 December 2023
Cambodia, Indonesia agree to boost trade ties
Indonesian Ambassador to the Kingdom of Cambodia, Dr Santo Darmosumarto on Tuesday met Deputy Prime Minister and Minister of Economy and Finance (MEF) Aun Pornmoniroth and discussed a range of topics ranging from economy to trade and human resources, said a press statement from the embassy. “There is still ample room for cooperation that must be developed and strengthened by taking advantage of the close historical ties between the two countries. We should strive to translate historical ties into trade, investment, tourism cooperation and socio-cultural ties between the two countries,” said Ambassador Santo. “I hope that bilateral relations in the field of trade will also spread to other economic sectors such as investment. It is hoped that there will be an increase in Indonesian outbound investment to Cambodia considering that there are various incentives and economic agreements between Cambodia and various countries and regions that can be utilized by Indonesian businesses,” said Lauti Nia Astri, Minister Counselor, Embassy of the Republic of Indonesia.
Source: Khmer Times
29 December 2023
Cambodia’s economy on track for recovery in 2023: AMRO
Cambodia’s economy is forecast to maintain a gradual recovery in 2023, driven by robust domestic activities, according to a recent report by the ASEAN+3 Macroeconomic Research Office (AMRO). The GDP growth rate is anticipated to increase from 5.3 per cent in 2023 to 6.2 per cent in 2024. One of the bright spots in the economic landscape is the projection of easing consumer price inflation in 2023, attributed to the moderation of global oil and food prices. Headline CPI inflation is expected to fall to 2.6 per cent in 2023, a significant decrease from the 5.3 per cent recorded in 2022. The Khmer riel has experienced slight depreciation since May 2023, prompting the National Bank of Cambodia (NBC) to resume forex interventions from September 2023. After a period of stability against the US dollar, the NBC intervened in the forex market with $50 million in September and an additional $40 million in October. However, the fiscal deficit is anticipated to widen to 6.2 per cent of GDP in 2023 due to increased spending, although it is expected to gradually decrease as part of the fiscal consolidation plan.
Source: Khmer Times
29 December 2023
Insurance premium goes south to $23M in Nov 2023
The Kingdom’s insurance industry saw a 7.87 percent decline in premium to $23.11 million in November from $25 million recorded for November last year, a report by the Insurance Regulator of Cambodia (IRC) showed. The country’s insurance sector was driven by 18 general insurers, 14 life insurers, seven micro-insurance companies, one reinsurance firm, 20 insurance brokers, 34 corporate agents and loss adjusters. The gross premium from general insurance stood at $9.07 million in November, a year-on-year decrease of 13.47 percent. Meanwhile, the life insurance premium totalled $0.54 million, which is a decline of 4.59 percent and the micro-insurance premium reached $1.9 million, an increase of 19.38 percent, the report pointed out. It said the total amount of gross claims paid out by the insurers reached $4 million during the period, up 21.96 percent compared to a year earlier.
Source: Khmer Times
Lady Aegies Comment : To be continue...............
