(in Khmer language)

Part 1:

Part 2:

FOR IMMEDIATE RELEASE

PRLog (Press Release–Nov 06, 2010) – Few new data regarding the telecommunications markets of Cambodia and Laos have been disclosed since our last update, with the situation in Cambodia urgently needing clarification as various players offered up wildly conflicting views on the size of the market, which range from 3.7mn to 7.1mn subscribers. Several operators, which rely heavily on prepaid services for growth, have yet to eliminate inactive and unregistered subscriber data from their records, and they continue to report heavily distorted user numbers. Others – such as Mfone and Axiata (hello) – have seen significant reductions in subscriber numbers as a result of record-keeping clean-ups, while smaller operators remain uncommunicative. We continue to believe that the market supported 5.4mn subscribers at the end of 2009, a view also held by VimpelCom of Russia. The market grew rapidly on the back of aggressive price competition in 2009 and, with new curbs on tariff changes effected early in 2010, we expect more moderate growth going forward.

The damage to Cambodian mobile ARPUs has already been done, however, with hello recording one of the lowest YE09 rates on the market, at US$4.20, and Mfone following close behind. Growing ARPUs will be difficult as customers have become accustomed to very low tariffs and this is reflected in our ARPU forecasts, which now include hello for the first time. We believe ARPUs will fall from an average of US$5.27 in 2009 to US$2.62 by 2014, although a small uptick may be seen from 2014 as the situation stabilises.
The lack of detailed H110 data means that we are reluctant to make any changes to our existing forecasts for mobile or fixed line markets in both countries. We do, however, have some new broadband subscriber data for Laos, which show the market to be growing at a faster rate than previously expected. With a new YE09 figure of 8,400 broadband subscribers in Laos, the broadband penetration rate would now appear to be just 0.13%. By the end of 2014, we forecast penetration rates rising to 0.8%. Nevertheless, despite the strong growth, penetration is expected to remain below 1% at the end of 2014.
We cannot – as yet – ascertain the extent to which 3G mobile broadband services are contributing to overall broadband adoption rates in either country, although it is clear that services are being deployed in more areas of each country and by more operators. Laotian operator Unitel is preparing to launch its 3G service in the latter part of 2010, according to rival Lao Telecommunications (LTC), for example, while Cambodia’s Sotelco (owned by TeliaSonera) is rolling services out to a number of new provinces. We are therefore keeping to our existing forecasts for 3G service adoption in both countries.

PP Post, FRIDAY, 05 NOVEMBER 2010 15:02 IM NAVIN

MONG Reththy Group plans to invest US$1.5 million to $3 million to build Cambodia’s first modern slaughterhouse in Phnom Penh next year.
Mong Reththy, local tycoon and senate member, said the new abattoir would ensure meat quality and provide sanitary conditions in which to kill animals. He said Cambodia needed a modern slaughterhouse to maintain people’s health.
“Our neighbouring countries already have modern slaughterhouses, so we have to.”
But he warned the slaughterhouse would not be built until next year because there were not enough pigs and cows in the country to support it.
He called on farmers to raise more pigs to meet demand.

“Building a slaughterhouse for only imported animals would be useless, because we are still insecure about whether those animals would get ill or not – even though they are examined by veterinarians,” Mong Rethy said. Currently, about 1,000 animals a day are brought to market in Phnom Penh.
Ministry of Agriculture production and veterinary service chief Keo Phal said though Cambodia did not yet have any modern slaughterhouses, traditional facilities had been developed to ensure public health.
“We have veterinarians in slaughterhouses to examine meat for people. We welcome this plan because it also is our long-time plan,” he said.
Sok Touch, head of the Ministry’s anti-infection department, said the slaughterhouse went along with the deal between the government and the World Health Organisation to fight and prevent infectious diseases.
“Recently we faced many problems, such as blue ear and foot-and-mouth disease. All of these are infectious diseases that can transfer from animals to humans, so the standards [of] slaughterhouses can help us fight them,” he said.

CAMBODIA’S riel appreciated to 4,135 against the greenback at some money lenders yesterday, as the United States announced huge quantitative easing measures to kick start its economic recovery.
The value of the dollar has slipped since the Federal Reserve announced a plan on Wednesday to spend US$600 billion on government bonds over the next year as part of a scheme of quantitative easing.
The news – which was higher than many forecasts – lifted hopes that the world’s biggest economy could see stronger growth, although some policy makers fretted about the knock-on effects for Asian economies.
The dollar fell against other currencies following the Fed decision. It fetched 80.82 yen in Tokyo trade yesterday, slipping from 81.12 late on Wednesday in New York.
The dollar had fallen over the past few weeks as dealers anticipated the move, at one point hitting a 15-year low of 80.21 against the yen.
Meanwhile, the riel has appreciated after a six-month decline.

According to the daily statistics complied by the Commerce Ministry’s Trade Promotion Department, riel currency strengthened 1.9 percent to 4,185 riel per US dollar yesterday from 4,212 riel per US dollar a day on Wednesday.
Its value has risen up to 3.2 percent, from 4,272 riel per US dollar at the end of August.
Chan Sophal, president of Cambodian Economic Association, said yesterday that the appreciation was not surprising.
“The riel appreciation is due to the depreciation of US dollar, as the US has released more currency in the market,” he said. Tal Nay Im, director general of the National Bank of Cambodia, was overseas yesterday, and could not be reached for comment.
As the riel appreciates, the price of gasoline prices in Cambodia has also increased. It rose by 1 percent yesterday to 4,600 riel a litre from 4,550 riel a day earlier, the statistics from the Commerce Ministry showed.
Asian markets also rose yesterday following the Fed’s move. Tokyo’s Nikkei soared 2.17 percent, or 198.80 points, to 9,358.78, with sentiment also boosted by strong earnings reports. Hong Kong jumped 1.18 percent by the break and Shanghai gained 1.26 percent. Sydney ended 0.48 percent, or 22.7 points, higher at 4,745.3. Qantas slipped almost four percent intraday as news broke that one of its A380 superjumbos had got into trouble over Indonesia in an engine incident.
“It was a wild night, so it’s early days, but with QE2 in the bag, the market might start to view positive US economic data in a more bullish light,” Macquarie Private Wealth adviser Shannon Briggs said.
Oil rose on hopes that demand in the US would rise after the Fed announcement. New York’s main contract, light sweet crude for delivery in December, rose 52 cents to $85.21 a barrel, while Brent North Sea crude for December gained 61 cents to $86.99. Gold closed at $1,358.00-1,359.00 an ounce in Hong Kong yesterday, down from Wednesday’s close of $1,354.50-1,355.50.

China’s Wu Bangguo (L) toasts with Cambodian Prime Minister Hun Sen

PHNOM PENH — China will inject 1.6 billion dollars into Cambodian infrastructure over five years, officials said Thursday, just days after the US urged the country not to become too dependent on the Asian giant.

"Within the next five years, Cambodia and China will have 23 co-operation projects," government spokesman Khieu Kanharith told reporters after a meeting between China’s top legislator Wu Bangguo and the Cambodian Prime Minister, Hun Sen.

Hydropower dams, mining projects, bridges and railway linkswould be among the initiatives funded by China between 2010 and 2015, he added.

At their meeting in Phnom Pehn, Wu and Hun Sen witnessed the signing of 16 deals, including a loan agreement arranged by the Bank of China that will see Cambodia’s largest mobile operator CamGSM borrow over 590 million dollars.

China also plans to help Cambodia build a new railway to neighbouring Vietnam, providing one of the last missing links for a pan-Asian network that would connect Singapore with China’s Kunming by train, according to the spokesman.

He said Wu also promised to boost Chinese direct investment in the kingdom, which so far this year stands at 610 million dollars.

Wu’s visit to Cambodia comes just days after US Secretary of State Hillary Clinton made a high-profile appearance in the country and urged Cambodians not to become "too dependent" on China.

Khieu Kanharith said Wu hailed the "fast growing ties" between the two countries and told Hun Sen that "China does not want to seek power and become the owner of the region".

China — a former patron of the Khmer Rouge regime, which oversaw the deaths of up to two million people in the 1970s — is the country’s top donor, according to Cambodia.

Nearly 400 Chinese companies have invested billions of dollars in Cambodia, including key infrastructure projects such as hydropower dams and coal power plants.

But China’s involvement in the country has not been without controversy.

A December 2009 decision by Cambodia to deport 20 Uighurs, a largely Muslim minority group in western China — despite their application for UN refugee status — came ahead of a 1.2 billion dollar aid and loan package from Beijing.

China has rejected accusations that the generous package was linked to the move.

Indonesia is considering buying 300,000 tonnes of Cambodian rice, according to its ambassador.
Speaking at the Indonesian Trade Fair (pictured right) on Phnom Penh’s Diamond Island, Indonesian ambassador Soehardjono Sastromihardjo said that Cambodian rice imports were on the agenda.
“We want to import rice to our country. Now, we are looking for a lot [from Cambodia] – about 300,000 tonnes,” he said.
The ambassador hoped that trade between the two nations would also increase this year, perhaps by as much as 20 percent, and could be worth US$250 million in 2010. In addition, he said that Indonesia “wants to sell agricultural machinery to Cambodia, but now we are still in negotiations”.

Fifteen companies have been officially granted licences by the Securities and Exchange Commission of Cambodia to act for the Kingdom’s first stock exchange.

Commission chairman and Economy and Finance Minister Keat Chhon said granting the licences was a key step towards the bourse, scheduled to launch in July next year “at any cost”.

The 15 companies were selected from a shortlist of 22 applicants compiled by the SECC in March. The number of permits granted reflects the initial requirements of the Cambodia Stock Exchange, according to Keat Chhon.

Commentators have expressed conflicting views on whether an appropriate number of licences had been granted, while others have voiced concerns over the readiness of the twice-delayed exchange.

Nguon Meng Tech, director general of the Cambodia Chamber of Commerce, said that while the number of licences granted was reasonable, the timeframe for the stock market to launch was too hurried.

“The government could open the stock market if they commit to opening it, but I think there would be no listed firms because of a lack of public confidence and knowledge among local investors” at the launch date, he said.

“It will need at least another three years to launch the stock market in Cambodia.”

Han Kyung-tae, chief representative of Korean-owned Tong Yang Securities Inc-Cambodia,  said that the number of licences had been

“expected”.

“But it will be tougher competitions for us as there are up to seven underwriters at the first stage,” he said.

Project Manager Inpyo Lee, a representative of the exchange’s minority owner, Korean Exchange, said: “The number [of licences] is more than my expectation.” He declined to comment on what he felt would be an appropriate number of pemits for the beginning stages of the stock market.

Other players contemplated ways to aid the launch of the exchange.

The concept of a stock exchange was still a new one for Cambodia, said Pung Kheav Se, president of Canadia Bank, which owns approved underwriter CANA Securities

Limited.

He said the licensed firms had a duty to educate people about the market.

“Even our bank, we don’t have any experience with this task, but we have employed an expert from Singapore,” he said. “If we don’t start [the exchange], we won’t know the way to go,” he added.

Three state-owned enterprises have been ordered by the government to prepare themselves for listing on the bourse: Sihanoukville Autonomous Port, Phnom Penh Water Supply Authority and Telecom Cambodia.

“We may try to approach the three firms for IPO preparation,” said Pung Kheav Se.

Keat Chhon said that SECC officials were reviewing and evaluating application documents for market operators, transfer and paying agents, and accountants.

PP Post, FRIDAY, 01 OCTOBER 2010 15:01 NGUON SOVAN AND JEREMY MULLINS

THE Council for the Development of Cambodia forecast yesterday that approved foreign investment in the Kingdom would drop 27 percent this year, compared to 2009, but was set to make a gradual recovery.
In a presentation given at Phnom Penh’s Koh Pich Island yesterday, Council for the Development of Cambodia’s investment board deputy secretary general Duy Thouv forecast projects worth $4.25 billion would be approved this year.
The fall would be the second year that approved Foreign Direct Investment has plummeted. In 2008, FDI hit a massive US$10.891 billion but fell 46 percent to $5.859 billion in 2009.
The CDC has predicted that after this year, approvals would gradually improve, to $4.46 billion in 2011, $5.8 billion in 2012 and $6.96 billion in 2013.
Despite the figures, officials remained positive about the Kingdom’s economy.
The 27 percent decline was not an indication of weakness, Duy Thouv said yesterday.

Instead, he said, 2009 had been a strong year, despite the global financial crisis.
“Of course the economy was hit by the crisis, but foreign direct investment was still high because of a sharp increase [in approvals] from Vietnam and China,” he said.
“Investment this year will be lower since there was no similar rush.”
Growth in FDI would stem from both internal and external factors, he said, highlighting a new rice policy boosting exports and the prospect of oil and gas production in 2012.
Special Economic Zones would also be established to attract additional businesses, he said.
The Kingdom has approved 21 SEZs. Of those, four are in operation, and two are being built, according to Duy Thouv’s presentation.
As of 2009, Cambodia had attracted more than $488 million worth of investment in the areas.
Economic experts also emphasised the importance of counting the impact of approved investment in real terms.
Chan Sophal, president of Cambodian Economic Association, said it was important to note the data registered only investment plans, and that many projects had never been implemented. There had been “huge investment figures” particularly in 2008, he said; however, some of the approved projects had never materialised.
“What we want to see is more implementation, more injection of capital on to those investment projects, not just papers showing approvals,” he said.
He said Cambodia had done well to attract investment, but that more could be done especially improving laws and regulations as well as easing restrictions inhibiting imports and exports.
Bretton Sciaroni, senior partner at Sciaroni and Associates, said that approved-investment data, although useful, did not make clear how much of the investments were actually made.
While Joshua Morris, managing director at Emerging Market Investments, echoed statements that figures could be misleading. Investors were becoming more critical when choosing potential projects, he warned.
“Foreign investment looking at the market now is more stable, more critical, with an eye to long-term goals,” he said. “Previously I think there were somewhat euphoric expectations of Cambodia.”
ADDITIONAL REPORTING CATHERINE JAMES

Cambodia’s largest banks have reported substantial profit increases for the third quarter ending September, with demand for loans rising because of a resurgence in the garment, agriculture and tourism sectors.
Canadia Bank and ACLEDA Bank saw significant profit increases for the quarter from July to September compared to the previous three months, as industry officials voiced optimism about domestic economic growth.
The profit figures follow a spate of positive news for the Kingdom’s economy last week, including the Asian Development Bank increasing Cambodia’s growth forecast for this year to 5 percent from 4.5 percent and international experts at a conference in Malaysia lauding the forthcoming national stock exchange.
Canadia Bank – the Kingdom’s second-largest and most profitable bank last year – saw gross profits before tax increase by 14 percent quarter on quarter, according to Vice President Dieter Billmeier.
He said the increased profits enabled Canadia to boost its lending faster than expected with loans already surpassing its planned US$450 million budget for the year.

The increased demand was particularly from sectors such as agriculture, service, wholesale and retail, and import-export during the most recent quarter, he said.

“That clearly shows the continuing support and trust of the general public in Cambodia’s banking and finance sector,” he said.

ACLEDA Bank CEO In Channy said the garments, tourism, and agriculture sectors were all performing well, contributing to profits.

The bank – Cambodia’s largest by number of branches – earned a net profit after tax of $7.2 million in the third quarter, up 29.6 percent compared to $5.5 million in the three months previously.

“We forecast demand for loans will continue to be high towards the end of the year,” he said, and added that the gains had led to a boost in the bank’s ability to lend.

Outstanding loans climbed 9.35 percent to $671.9 million in the latest quarter, from $614.5 million during the second quarter. Deposits grew 8.17 percent to $858 million at the end of the third quarter.

Its non-performing loan rate declined to 0.7 percent by the end of the third quarter from 0.94 percent at the end of the second quarter.

Stephen Higgins, CEO at Cambodia’s fourth-largest bank ANZ Royal, said his company  was seeing more transactions in agribusiness and profits were still holding up well, despite some unsustainable pricing strategies by competitors.

The bank’s NPLs were 5.4 percent last year, according to National Bank of Cambodia statistics.

Higgins said the rate of new NPLs had been fairly negligible this year.

Meanwhile South Korea’s largest bank, Kookmin Bank, saw deposits  at its Cambodian subsidiary increase 53.8 percent during the quarter to $20 million. The bank – which set up shop in Cambodia in May last year – also saw outstanding loans increase 33 percent to $16 million, according to its Cambodian CEO, Jang Ki-sung.

As the Constitution of the Kingdom of Cambodia says, the “Cambodian people are the masters of their own country.” And in its Article 51, the Constitution, written in 1993 by the elected representatives forming the first National Assembly, who then established the Kingdom of Cambodia, were setting high goals for the future: “to restore Cambodia into an ‘Island of Peace’ based on a multi-party liberal democratic regime guaranteeing human rights and the respect of law, and responsible for the destiny of the nation.”

Recently, there were reports about some other high flying plans for Cambodia.

Islands are different from their environment – they can have a kind of life of their own.

The Pristine Island of Koh Rong – Picture: Hotel Online

Now there are big plans to invest millions of dollars – others say billions – to develop an island half an hour by boat off the coast of Sihanoukville – Koh Pich – into an ecologically sustainable resort area like the world famous tourism destinations of Phuket in Thailand or Bali in Indonesia. There had been no announcement about A bidding process which led to this contract for the 78 sqkm island – but this is similar to many other of the large, long range economic concessions. The Mirror had only briefly reported under the date of 12.8.2010:

• The Royal Government Gave Koh Pich Land Titles [to the Oversea Cambodian Investment Corporation of the director general of the Canadia Bank, Mr. Pung Kheav Se; the Koh Pich island covers a total area of 100 hectares and was contracted for 99 years for development]

The plans foresee really an island – something different from its environment of the country of Cambodia: a luxury resort, with hotels and a golf course an a yacht harbor – plus its own international airport. While international tourism so far has been mainly focused on Angkor Wat, this plan aims to add some new feature, comparable to other international island and beach tourism destinations in Asia.

But now one more grand plan was released – aiming still higher: To build the highest building in Asia, the second highest in the world. According to local newspapers, the Prime Minister said:

“Cambodia will build the tallest private building in Asia… I plan this building with the private sector, 555 meters… I think we can do it.”

Mr. Touch Samnang, responsible for planning in the Overseas Cambodia Investment Corporation, promoting this plan, is quoted to have said, “We have enough capital to build. We are not looking for investment partners.’ But for the technical construction we will need help from abroad.” The building would have commercial space for shopping and exhibition centers, but also residential sections. “It will reflect Phnom Penh. It is possible. It depends on the money, right? If you have the money, you can build anything.”

The press reports I have seen so far did not say anything about the need for such a building, and about its economic viability – for example calculating the prices for the rent of offices and housing in this 555 meter tall tower, totally depending or reliable electricity supply, etc. etc. But Mr. Samnang considers that this building “will be a triumph for Cambodia.”

“If you have the money, you can build anything.” For example also housing which the large number of people in Phnom Penh, who live in substandard crowded environments. If there exists a master plan how to solve the public housing needs in Phnom Penh during the coming years, we would appreciate to be informed where we can see it. The Mirror could be happy to help to share it widely, and invite to discuss it. After all, the Cambodian people are the masters of their own country.