No.25 (Jan 22, 2020)

Market Industry Trends

SECC PREPARED TO LIST SHARES OF HOLDING FIRMS. The Securities and Exchange Commission of Cambodia (SECC) is drafting a prakas on public offerings of equity securities for holding companies to allow them to issue shares on the Cambodia Securities Exchange (CSX). The discussion about the inputs of the draft prakas is still ongoing between all relevant stakeholders before submitted for approval. This new prakas will enable holding companies, company that holds shares of other companies without participating directly in the business activities of the company they are holding, to raise funds by listing their entities in Cambodia. Currently, there are 13 listed firms in the Kingdom – seven with stock listings and six with corporate bond listings. According to CSX data, they had raised a combined $253 million as of September 2020. (Phnom Penh Post)

PPSEZ EXPORTS TO US, EU, AND ASEAN UP SUBSTANTIALLY IN 2020. Exports from the Phnom Penh Special Economic Zone (PPSEZ) made under the ASEAN-EU FTA (free trade agreement) and the United States’ GSP/MFN scheme (Generalized System of Preferences/Most-Favored Nation) was valued at around $507 million in 2020. This marked an increase of 76% over 2019 results, according to a report from the Ministry of Commerce’s General Directorate of Trade Support Services. These exports were primarily in garments, textiles, shoes, and travel goods with the primary destinations being the US, United Kingdom, EU, China, South Korea, and Japan. The data also showed the value of exported goods: garment ($20.34 million), travel goods ($4.637 million), shoes ($826,504), and other goods ($481.68 million). (Khmer Times)

NGO PARTNER PROMOTES BEST PRACTICES FOR RUBBER FARMS. The General Directorate of Rubber under the Ministry of Agriculture, Forestry and Fisheries and Worldwide Fund for Nature-Cambodia (WWF-Cambodia) have announced their cooperation to build a multilateral partnership for transparent and sustainable natural rubber supply chains in Cambodia. The memorandum of understanding (MOU) aims to establish a framework that provides information on sustainable rubber production and opportunities for capacity building in sustainable practices. Building capacity and providing technical skills to small plantation owners and the officials in the sector, combined with active participation from all key stakeholders, will contribute to the sustainable development of Cambodia’s rubber industry. Cambodia’s rubber plantations span 401,914ha with the industrial production of 240,811ha and family farms of 161,103ha. (Phnom Penh Post)

SINGLE PORTAL TALLIES 7,293 ENTRIES. The number of companies initiating the registration process on the government’s newly launched e-Business Registration Platform has increased to 7,293 after seven months of the system launched. Six ministries and state-run institutions comprise of Ministries of Interior, Ministry of Economy and Finance, Ministry of Commerce, Ministry of Labor and Vocational Training, General Department of Taxation, and the Council for Development of Cambodia have been integrated into a business registration system on the platform which is also known as the Single Portal. The single portal has been applauded for its efficiency in facilitating the registration process for the private sector. The previous company registration process will take months to complete as the information needs to be assessed by multiple ministries. The new single portal business registration would take a maximum of 8 days only since all data inputted into the platform will be stored and distributed by the system automatically. (Phnom Penh Post)

Macro-economy

GOVERNMENT ANNOUNCES POLICY SUPPORT FOR CASSAVA INDUSTRY. Cambodia has officially launched a “National Cassava Policy” (NCP) to boost domestic production, processing, and commercialization for export to international markets. The NCP is a joint effort by the Ministry of Commerce, Ministry of Agriculture, Forestry and Fisheries, and the UN Development Program (UNDP). Cassava is one of the primary agro-industrial crops with an investment of about $300 million annually and a major export product that contributes 3% to 4% of gross domestic product (GDP). This policy aims to position Cambodia to be a home of cassava processing industries and a reliable supplier of cassava-based products for global markets. The policy defines three main objectives: commercialize cassava production; support active processors and attract investment to produce value-added cassava-based products; enhance trade competitiveness and trade facilitation as well as trade-related costs. (Phnom Penh Post)

KINGDOM’S BICYCLE EXPORTS TOP $500M. Cambodia exported bicycles worth approximately $527 million to international markets last year, up 27% from 2019. Target markets for bicycle exports include the US, Germany, Sweden, Belgium, Canada, UK, Denmark, Australia, Austria, Netherland, Czech Republic, Italy, Columbia, Korea, and Spain. According to the data from the Ministry of Commerce, Cambodia ranks number 1 in the ASEAN community and number 5 globally for bicycle exports. Recently, there is a high demand for bicycles in many parts of the world since people are reluctant to use public transportation. According to Bike-EU.com, a website specializing in the EU’s bicycle industry, Cambodia has been the leading supplier of bicycles to the EU since 2017, overtaking Taiwan who had held the top position for more than two decades prior. (Phnom Penh Post)

NBC ANNUAL REPORT DETAILS NATION’S 2020 FINANCIAL PICTURE. Cambodia’s international gold and dollar reserves have reached $21.3 billion, sufficient to guarantee the next 10 months of goods and services imports. The NBC stated the level of international reserves on hand enable Cambodia to manage its exchange rate, stabilize the financial sector, increase national properties and build trust among the public. The report noted that the banking sector’s 2020 total loan portfolio was $30.2 billion, an increase of 15.3% from 2019. The loan category breakdown by sector was led by retail at 15.5%, personal mortgages at 12.8%, wholesale at 9.7%, personal loans at 9.8%, construction at 9.2%, real estate at 8.4%, agriculture at 7.7% with others amounted to 26.9%. Bank deposits were $30 billion, a rise of 15.5% over 2019 figures. Total loan restructuring in the banking sector for 2020 was $3.017 billion. NBC also reported total loans by microfinance institutions (MFIs) in 2020 as $6.8 billion, a surge of 12.5% compared to 2019. Deposits at microfinance deposit-taking institutions (MDI) were $3.7 billion and loan restructuring by MFIs amounted to $1.139 billion. (Khmer Times)