Thursday, December 30, 2010

PM rebukes wayward nephew

Prime Minister Hun Sen on Wednesday made an outspoken public appeal for one of his nephews to mend his ways and return to his family.

Speaking to a crowd of thousands gathered at the University of Phnom Penh for the ground-breaking ceremony of a municipal overpass, Hun Sen said he had sent National Police chief Neth Savoeun to look for Hun Chea, who the Premier accused of cheating on his wife  and being involved with drugs.

“According to the investigation, now [Hun Chea] is staying in a hotel with a woman, and there is a group of drug [users] involved with him,” Hun Sen said.

“[I] will not tolerate involvement in [drugs] ... there must be law enforcement, it doesn’t matter if he is the nephew of the Prime Minister.”

Hun Sen said that Neth Savoeun, an elder cousin of Hun Chea’s, had been charged with locating and bringing the premier’s nephew home to his wife and children. The premier also appealed to the general public for help, and asked Hun Chea himself to consider the welfare of his family.

“Everybody and every hotel, if you see Hun Chea do not accept him, and tell him that the Prime Minister asked him to go home,” Hun Sen said.

“Today, with a loudspeaker, I would like to appeal to my nephew Hun Chea to return home. If you hear my appeal, please return home. Your parents and parents-in-law have been sick at home, and your wife and children are waiting at home.”

Hun Sen said he planned to call “a meeting of the Hun family”, noting that some other relatives of his might be in need of some “reeducation”.

“Only my children accepted reeducation; my nephew has never accepted reeducation,” he said. He added that another nephew, Hun To, “used to be the same as Hun Chea”, but was now “a good character with his wife and children”.

PM blasts World Bank

During his hour-long speech, Hun Sen also criticised the World Bank, which he said had failed to complete construction on a library that it started building four years ago on the University of Phnom Penh campus.

Hun Sen noted that the building was “just a few hundred square metres” and compared it to the new Council of Ministers building, which he said covered more than 50,000 square metres and was completed 18 months after a Khmer company began construction.

“[We] have to realise that’s how the foreigners build for us, and that’s how we build by ourselves,” Hun Sen said.

“There is no doubt that when the foreign consultants still make money from the project, the library building is still not completed.”

Bou Saroeun, a press officer at the World Bank, said the organisation had allocated US$1.8 million to build the library, and that delays had been caused by “technical problems”. He said construction was now expected to be completed by May next year....read the full story in tomorrow’s Phnom Penh Post or see the updated story online from 3PM UTC/GMT +7 hours.

 

Tuesday, December 28, 2010

Dynamic fiscal prediction

A leading official at the Korea Exchange, joint partner in Cambodia’s soon-to-launch bourse, believes the Kingdom’s economy and capital market have “dynamic prospects”.

Pat Gil-Soo Shin, senior vice-president of Emerging Market Development of the Korea Exchange, or KRX, also expressed hopes for Cambodia’s new stock market, but said its launch was “no easy” task.

Speaking to The Post in Seoul, he confirmed that the preparations for the much-delayed Phnom Penh exchange – set to launch in Canadia Tower in July – are gathering pace.

KRX has drawn up operational rules for the new market, which are awaiting approval from the Securities and Exchange Commission of Cambodia, while a Korean advisory group has been dispatched to Phnom Penh to design and consult on bourse framework. “SECC is working on the supervisory regulations with many crucial ones already finalised,” he said.

Information technology infrastructure, he said, was “almost finished”, with a training session set to take place in the capital.

“It is just natural to take a long time to introduce a totally new industry [the exchange] to a country,” he said. “There should be various obstacles and challenges with this complex project.

“However, we are pleased to have proceeded with the project successfully so far, via close cooperative efforts with the Cambodian government.”

The decision to hold a 45-percent stake in Cambodia’s stock exchange, he said, was part of KRX’s business plan to enter into strategic alliances with regional stock exchanges and globalise its business scope.

But launching exchanges in emerging economies brought challenges. “Every company may have its own reason to list or not,” he said. “There may be some companies that have reported less income to [the] tax authority. This was also the case in Korea. Especially in emerging countries, there may be a need to introduce temporary measures to promote companies’ IPO (initial public offerings) and listing and solve the problem of ‘by-gone tax evasions’.”

Emphasising the need for financial transparency in order to apply for listing, he said: “Some securities companies are already in talks with applicant listing companies.”

But programmes informing businesses about the potential of the exchange were  planned in order to spread further exchange awareness in the business community.

Striking a balance between investor protection and market development was also a factor to consider.

“There should be balanced policy direction ... too much focus on investor protection will restrict market development in the initial stage, while we cannot compromise quality of the market,” he said.

Looking to the future, he remained enthusiastic about the Kingdom. “I see dynamic prospects within the Cambodian economy and the capital market [set] to be introduced,” he said.

(source from the Phnompenh post newspaper, Thursday, 23 December 2010 19:14 May Kunmakara) 

Thursday, November 25, 2010

SIM cards as status symbols

101125_8
Photo by: Sreng Meng Srun
SIM cards on display. Special phone numbers are becoming increasingly popular as status symbols in Cambodia.

The rich people, they need something special to show they have money and power.


CELL phone numbers are becoming a sign of social status in Cambodia, and a new firm aims to collect on the trend by offering SIM cards for up to thousands of dollars.

KhmerSim.com’s Managing Director Kong Piseth said demand for SIM cards with  “lucky” or “VIP” numbers was coming primarily from the Kingdom’s businessmen, who were keen to portray their wealth.

“The rich people, they need something special to show they have money and power,” he said.

What constitutes a “VIP” or “lucky” number depends on the customer. Some prefer numbers that are easy to remember, but it is repeating digits in particular that often demand serious cash.

Its website offered several Star-Cell numbers – such as 098 79 7777 begin_of_the_skype_highlighting              098 79 7777      end_of_the_skype_highlighting – for US$2,830, and a selection of Mobitel numbers for $1,530, including 017 43 7777 begin_of_the_skype_highlighting              017 43 7777      end_of_the_skype_highlighting.

On the other end of the spectrum, Smart’s 010 82 0003 begin_of_the_skype_highlighting              010 82 0003      end_of_the_skype_highlighting was on offer from KhmerSim.com for $10.

“So far we have not sold any in the thousands, but we have sold some that cost $200 or $300,” he said late last week.

Although the company is only a few months old, it claims to have already sold “hundreds” of SIM cards.With five employees, it is planning to begin contacting high-powered businessmen directly to expand sales.

KhmerSim.com acts as a middleman for “dealers” who obtain the SIMs, said Kong Piseth – though he declined to reveal the identity of the dealers, calling it a company secret.

Gary Foo, marketing manager at mobile provider Hello, said some SIMs sell for considerable amounts of money.

“The price to pay for special numbers does go sky-high sometimes,” he wrote last week.

Consumers have come to see certain numbers as a means to demonstrate their individual social status, with the more expensive the number conferring the owner’s social standing.

Repeating numbers or easy to remember digits are very popular, he said, but added there was also a cultural component to what constituted special numbers, particularly with Chinese influence.

The number eight represents prosperity in Chinese culture, and often shows up in “lucky” numbers, according to Gary Foo.

Some numbers also have meanings attached to them in Chinese languages, such as 118, which combines to mean “everyday prosperity” in Cantonese.

Piseth Kong said there were another two or three Cambodian websites in the same business as KhmerSim.com, but competition was likely to grow further over time.

He claimed Metfone was the most popular SIM requested from the company, with Mobitel coming in second and Beeline rounding out at a close third.

The most expensive number on rival site KhmerSimCard.com displayed yesterday was 015 888 848 begin_of_the_skype_highlighting              015 888 848      end_of_the_skype_highlighting, which was on offer for $980.

(source from the phnompenhpost newspaper,Thursday, 25 November 2010 15:01 Jeremy Mullins)

Housing projects on rise in capital

THE value of Phnom Penh housing investments approved by the government from January to October has risen more than 10 percent, compared to the same period of last year.

According to figures released by the Ministry of Land Management, Urban Planning and Construction yesterday, 250 construction projects – consisting of 2,710 new villas and flats - worth an estimated US$197 million were approved from January to October this year.

This compares with 249 construction projects, worth $179 million, approved in the first nine months of 2009 – an increased in value of 10.1 percent.

Lao Tip Seiha, director of the department of construction at the Ministry of Land Management, Urban Planning and Construction, said yesterday that the residential development market in Phnom Penh was in recovery.

“We approved a lot of construction projects from local and international investors such as factories, entertainment centres, hotels, apartments, commercial and residential buildings,” he said.  “It is a good sign, even thought the world economic crisis is still affecting the construction sector. We strongly believe it will see a step-by-step recovery this year.”

Lao Tip Seiha added that current construction is yet to fulfill Phnom Penh’s ever increasing demand for housing.

Around 10,000 new families come to the city each year, he said, and Phnom Penh needs to promote housing investment, especially to provide for the poor.

“According to the housing development policy for 2010 to 2030, we must build about 1.2 million homes nationwide,” he said.

According to a report released by the National Valuers Association of Cambodia last week, land prices for commercial and residential property decreased slightly during the third quarter of this year.
(source from the phnompenhpost newspaper,Monday, 22 November 2010 19:13 Soeun Say)

Market heats up for Pop Ice maker

IT is a common question asked by many at the Kingdom’s restaurants and bars – is the ice safe to consume?
Poor quality ice, made with suspect water and using unhygienic handling measures, often leads to illness such as stomachaches, undermining trust in the product, according to Khim Nary, owner of Pop Ice Enterprise ice manufacturers.

Although patrons at the Kingdom’s eateries often skip out on ice cubes, suffering the results of lukewarm sodas and unpleasantly warm beers, Pop Ice aims at producing quality ice to cool consumers’ drinks.

Pop Ice claims to be the first ice factory recognised by the Ministry of Industry, Mines and Energy for the quality of its ice, meeting hygiene guidelines laid out to protect consumers’ safety.

“We have the ability to make ice at the standard used in Vietnam and Thailand,” she said.

Still a small-scale enterprise, presently with nine employees earning US$50 to $60 per month plus accommodation and food, it first opened its doors in 1990 in Phnom Penh’s Toul Kork district.

With its two ice-making machines presently operating at about half their total capacity of 10 tonnes per day, Khim Nary said the goal was to sell quality ice sold at strong prices, but Cambodians had to get used to trusting domestically produced ice in order to boost sales.

“The Ministry of Industry and GTZ helped us organise our products to become a model to the industry – but we are still improving,” she said.

Dang Heng, business service coordinator for private sector promotion at GTZ, said earlier this month that there were 650 ice and drinking water enterprises in Cambodia, but only 5 percent met GTZ’s quality standards.

Khim Nary has called for improved professional skills to further the products’ quality – such as keeping ice at lower temperatures for longer amounts of time to prevent melting, when the product is sold on to customers.

“We need more professional skills and advice from the government and NGOs to improve our business,” she said. As a wholesaler, Pop Ice vends its wares at supermarkets, restaurants, clubs, shops and hotels in Phnom Penh.

The firm currently produces some 3,000 to 4,000 kilogrammes of ice per day, fetching between 150 and 200 riel per kilogramme. The ice is made on demand, as it is costly to store for longer periods, she says.

Khim Nary called for lower electricity and water costs in a bid to boost sales and allow it to keep more ice in stock.

Electricity costs are one of the main expenses of the company, she says. It also purchases 600 to 1,000 cubic metres of water per month from the Phnom Penh Water Supply Authority.

High interest rates for loans had also proved a barrier to expanding the business, she said.

The economic downturn had hit ice orders, with current business levels just returning to par compared with pre-crisis levels.

“We lost a lot of clients,” said Khim Nary. “Clubs and karaoke bars closed because of the world economic crisis.”

Competition is growing fiercely in the domestic ice industry, with new manufacturers opening their doors every year.

“The number of ice makers is increasing – it’s a very difficult market to sell in,” she said. The firm aims to compete by forming strong ties with customers and competitive pricing, but particularly by strengthening the quality of its brand so that it can be trusted by Cambodians in search of a cool drink.

Friday, November 19, 2010

Kingdom’s biodiesel plans on hold as jatropha disappears

NTC Jacam Energy has halted plans to produce biodiesel because of a lack of raw materials, particularly jatropha, according to the firm’s chairman.

The firm had planned to more than triple its production to 2,000 litres of biodiesel per day earlier this year, but a lack of jatropha on the local marketplace had forced the company to stop, Chheuy Sophors said.

“We suspended our biofuel production due to a lack of raw materials. Some

farmers who used to grow this crop have stopped,” he said.

The firm had invested US$400,000 to build the biodiesel plant in Kampong Speu province.

It had previously purchased jatropha seeds from farmers in Kampong Speu, Battambang, and Banteay Meanchey provices at a processing cost of between 600 and 800 riel per kilogram.

Jatropha is a quick-growing tropical plant. Its seeds can be crushed to process biodiesel, which could fetch some 3,200 riel per litre, the firm said.

NTC Jacam Energy had recently spent $50,000 to grow jatropha on 500 hectares in Kampong Speu and Koh Kong province, which could provide the future materials required for production, according to Chheuy Sophors.

“We hope the company will receive about 3,000 tonnes of seeds per year with this project so we can produce biofuel in the future,” he said.

Producing 1 kilogram of biodiesel required three times the amount of unprocessed jatropha seed, he said. It would require 6 tonnes of seed per day to meet its original production goal of 2,000 litres.

Chhe Pich, deputy chief of Kampong Speu Provincial Office of Agriculture, Forestry and Fishery said yesterday farmers in Aural and Samraong districts had formerly grown plenty of jatropha, but poor yields had forced many to change to other crops. A United Nations Food and Agricultural Organisation report issued earlier this year claimed the crop has the potential to produce a large amount of energy, compared to the area required to grow it.
(source from the phnompenhpost newspaper,Tuesday, 16 November 2010 15:01 Chun Sophal)

Necessity trumps value for mobile provider mergers

LONG-AWAITED consolidation within Cambodia’s bloated mobile phone market suggests companies will have to make the difficult choice of taking on assets they don’t really need in a bid survive.

Reported talks between Star-Cell and Smart Mobile could lead to the first merger.

But what value can these companies derive from each other?

In terms of infrastructure, Star-Cell would gain almost nothing from the tie-up because Smart Mobile does not offer any new coverage, according to footprint maps provided by both companies.



The main motivation behind tie up plans is surely survival ... success will depend on ... retaining subscribers.


Smart would benefit from Star-Cell coverage in new areas including Samlot near Pailin, Koh Kong City, Pursat along with areas of the northeast where it currently has no infrastructure at all in Banlung, the capital of Ratanakkiri and Stung Treng.

However, if the two companies agree to a merger then dozens of towers will become redundant.

Were the two companies to join under one operating licence then the other would become obsolete, an asset whose value is unknown given the lack of transparency in the market.

Whatever the value, there would be little opportunity to sell off the spare licence as no company in their right mind would decide to launch in Cambodia given the high level of competition.

The two companies would also have to make critical decisions on how to move forward under one banner.

In Phnom Penh at least, Smart Mobile has a much more visible presence while Star-Cell has already effectively admitted its brand is worthless when parent firm TeliaSonera announced last month the firm has “no goodwill” towards its operations in the Kingdom.

But then Star-Cell has more subscribers, according to official government data, and a wider coverage area. Which brand should be chosen following the merger?

The main motivation behind tie-up plans is surely survival, so whether or not the merger could be successful will depend on the extent to which the resultant joint-venture can retain subscribers.

Here things look more promising. At the end of the first half of this year, the two firms had a combined 850,000 subscribers, according to government data. Only Mobitel and Metfone have more.

If Star-Cell and Smart Mobile can retain this subscriber base after merging, they would propel themselves into third position in the market, a share which would surely guarantee their safety in Cambodia.

But that is a big if, given the fickle nature of mobile phone users here, and overall the merger would surely represent a huge waste in terms of asset usage.
(source from the phnompenhpost newspaper, Friday, 19 November 2010 15:01 Steve Finch)

Southern Gold plans share issue on ASX

MINER Southern Gold has announced plans to raise up to A$4.5 million (US$4.4 million) through share issues to fund its activities in Australia and Cambodia. The firm is exploring on seven tenements in Mondulkiri, Ratanakkiri and Kratie provinces.

It plans some 5,000 metres of test drilling as well as 12 kilometres of trenching at five prospects to be completed in Cambodia by February 2011, according to a presentation from the firm. Southern Gold claims to be pursuing “early mover advantage” in the Kingdom.

The firm has announced two share placements in filings to the Australian Securities Exchange. The first is an A$3 million placement to institutions and the wholesale market, at A$0.068 a share for 44.2 million shares.

The second is an offering to its existing shareholders, which it claims could raise a maximum of A$1.5 million before closing on December 3. Its shares closed on the Australian Securities Exchange yesterday at A$0.072 each.

Japan Oil, Gas and Metals National Corporation could earn up to 51 percent interest on two Southern Gold Cambodia projects, depending on the level of funding it commits.

It had spent $3.3 million to date, and committed another $1.2 million for the 2010 to 2011 period, the firm said.

Southern Gold joins a number of miners active in the Kingdom who have recently announced share offerings. Brighton Minerals began trading at the beginning of November on the ASX. Liberty Mining, has announced plans to conduct a float on the exchange early next year. It holds a number of concessions in northeastern and northwestern Cambodia. The firm’s Managing Director Richard Stanger has said the large number of miners conducting offerings was largely coincidental, though high gold prices also made the offerings potentially more lucrative.
(source from the phnompenhpost newspaper, Friday, 19 November 2010 15:01 Jeremy Mullins)

Rural rules: Agriculture reforms on the table

THE Ministry of Agriculture, Forestry and Fisheries has begun finalising a draft law which will prohibit imports of low quality agricultural products – including some chemical fertilisers and pesticides – in order to boost farming yields.

“After the law comes into effect, we will be better able to control the quality of imports, in the interest of both farmers and traders,” according to Sokhan Rithykun, director at the Department of Agriculture.

After receiving the ministry’s ascent, the law would be sent to the Council of Ministers for approval, he said.

The draft law calls for a ban of low-quality agricultural materials from being imported to the Kingdom, according to a copy obtained by The Post. Presently, the quality of some imported products, such as chemical pesticides and fertilisers, were not effectively managed, according to Yang Saing Koma, director at the Cambodian Centre for Study and Development in Agriculture.

“That’s why we support this draft – we hope it will enable farmers to access higher quality imports,” he said.

An Sam Un, a representative for farmers in Svay Rieng, said the current uncontrolled use of low-quality chemical pesticides and fertilisers seriously affected rice production.
(source from the phnompenhpost newspaper,Friday, 19 November 2010 15:01 Chun Sophal)

Union Commercial sees its deposits soar

DEPOSITS at the Union Commercial Bank increased more than 50 percent over the first nine months of the year, according to chairman Yum Sui Sang.

Some US$159 million had been deposited with the bank by the end of September, from $106 million at the beginning of the year, he said yesterday at the launch of the bank's new branch near Phnom Penh’s Olympic stadium.

The bank – which was the Kingdom’s seventh largest lender last year, according to National Bank of Cambodia statistics – had also extended $74 million in loans at the end of the third quarter. This marks a 19.3 percent increase from $62 million at the start of the year.

Its new Olympic branch represents UCB's fifth in the Kingdom.

Meanwhile, Deputy Governor of the National Bank of Cambodia Neav Chanthana said deposits at the Kingdom’s 28 commercial banks had increased more than 20 percent in the first nine months.

Speaking to The Post at the opening of the new branch, she added that developing a sound financial sector and banking system required the utmost trust from customers and investors.

“This definitely reflects the key success of the bank, as well as building confidence in the Cambodian banking system,” she said yesterday.

According to the NBC’s annual supervisory report, total deposits in the Kingdom grew 32 percent to $3.3 billion in 2009 compared to a year earlier.
(sourece from the phnompenhpost newspaper,Thursday, 18 November 2010 15:00 May Kunmakara)

Rice seed project to start early next year

THE United Nations Food and Agriculture Organisation is supporting the Cambodian government in motivating private companies to produce rice seed.

FAO official Tim K Ekin told a seminar on agro-business, held at the Phnom Penh Hotel this week, that a program to study rice seed production in Cambodia will begin early next year, with the aim of boosting domestic seed production.

It is hoped the project, funded by the European Union, will help private firms to provide “pure” rice seed, rather than hybrid types.

According to Ekin, the move would enable farmers to increase yields by approximately 15 percent.

He said: “We are calling for private companies to get involved in pure rice seed production. If there is no involvement from the private sector, Cambodia will face difficulties when increasing production.”

Srun Sokhom, deputy director of the Ministry of Agriculture, Forestry and Fishery, said further sector engagement would be good for farmers.

But Mong Reththy, Chairman of Mong Reththy Group, a large agricultural company, said that producing pure rice seed was not easy.

He warned that such projects required participation from technicians.
(source from the phnompenhpost newspaper, Thursday, 18 November 2010 15:00 Chun Sophal)

Money matters: City water signs deal with bank

ACLEDA Bank inked a deal yesterday to allow users of its mobile banking service to make payments to the Phnom Penh Water Supply Authority.

The bank has conducted a similar service with Electricite de Cambodge since August 2009, according to its President and Chief Executive Officer In Channy.

“It’s another great achievement,” he said in a press release.

The bank also launched its ACLEDA Unity mobile banking service in July.

Ek Sonn Chan, head of the water supply authority, said: “The use of the commercial banking system to manage payment transactions for water supply is designed to enhance the financial accountability of PPWSA.”

The authority is one of at least two state-owned firms set to float on the Cambodian stock exchange, when it launches next July. 
(source from the phnompenhpost newspaper,Thursday, 18 November 2010 15:00 Jeremy Mullins)

Smart Mobile in Star-Cell merger talks, qb claims

SMART Mobile is in talks to merge with rival provider Star-Cell, according to the head of rival company qb.

“We understand Smart is in discussions over a proposed merger [with Star-Cell],” said Alan Sinfield, qb’s chief executive officer, yesterday.

Mobile operator qb had also eyed Star-Cell, he said, but had proposed a 100-percent purchase rather than a merger.

“If we are unsuccessful, or even if we are successful, we will pursue other acquisitions or mergers,” he said.

Star-Cell had been widely viewed as being on the market in recent months. Its Sweden-based owner TeliaSonera AB announced it had “written down” its value by more than US$100 million late last month, claiming “no goodwill” in a market it said was characterised by fierce competition and high churn rates.

Star-Cell was the seventh largest of the Kingdom’s nine mobile operators, with 503,000 active subscribers at the end of September, TeliaSonera said in its third quarter results.

According to research by The Post, the companies behind Smart and Star-Cell – Cyprus-based Timeturns Holdings and TeliaSonera respectively – already cooperate in other markets.

Star-Cell first launched in Cambodia in October 2007, according to the industry body GSMA. It was 100 percent acquired by TeliaSonera in September 2008.

That deal also saw TeliaSonera acquire 80 percent of Spice Nepal. Timeturns is the founder and part owner of Spice Nepal, according to the firm.

It claims to have begun operating Spice Nepal in 2005 as the first privately owned mobile provider in the country, on its website.

Smart Mobile Chief Executive Officer Thomas Hundt declined to comment on the claim yesterday.

Officials from Star-Cell had told The Post to contact TeliaSonera representatives, who claimed to be “unable to comment”.

Ministry of Posts and Telecommunications Director General Mao Chakrya was unavailable and other ministry officials declined to discuss the alleged merger.

Earlier this year, Alan Sinfield targeted extending qb’s coverage to 100 percent of Cambodia’s population by the end of 2010.

“It’s going to be hard to achieve but certainly that’s our main goal,” he said, though he declined to disclose the cost of the expansion or the number of towers targeted.
(source from the phnompenhpost newspaper, Thursday, 18 November 2010 15:00 Jeremy Mullins)

Malaysian bank CIMB launches today

A FOURTH Malaysia bank – CIMB – is set to launch in Cambodia today, bringing the number of banks operating in the Kingdom to 29.

Government officials and bankers alike said yesterday the new entry demonstrated the soundness and strength of Cambodia’s financial sector.

“They clearly know about the potential and progress of our economy and they are confident in the sector – that’s why they have invested here. We welcome any new investment,” said Director General of the National Bank of Cambodia, Tal Nay Im, yesterday.

In Channy, president and CEO of ACLEDA Bank, also welcomed the investment, stating:  “This emphasises that they trust in our banking regulations and systems, as well as the growth of our economy.”

Dieter Billmeier, vice president and advisor to Canadia bank, wrote in an email to The Post that CIMB was a well known, respected and experienced Asian bank that could bring its expertise to the Kingdom. But he warned it may be entering an “overbanked” Cambodian market.

Increased competition, according to In Channy, could benefit the man on the street.

“If CIMB can bring new products and services, they will make the existing [banks] to try to improve the quality of their products. Customers will enjoy more banking products and services [such as loans] with lower interest rates,” he said.

Tal Nay Im added that new banking products and technological expertise could encourage more people to use banks.

“The numbers of people in the population using banking service and products are still low. But the new banks opening will attract them,” she said.

Pok Vivilay, assistant to vice president of CIMB, declined to comment yesterday. The bank’s first branch will open on the corner Norodom Boulevard and Street 118, in Phnom Penh.
(source from the phnompenhpost newspaper,Friday, 19 November 2010 15:01 May Kunmakara)

Tuesday, November 16, 2010

Maybank, OSK deal reported

MAYBANK saw its outstanding loans in Cambodia decline 11 percent quarter on quarter, the bank said, as reports surfaced that it was keen to buy fellow Kingdom operator OSK Holdings.

Maybank’s outstanding portfolio in the Kingdom stood at 240 million ringgit (US$77 million) at the end of September, down from 271 million ringgit at the end of June, according to results published late last week.
Earlier this month, Maybank

Country Head Jubely Pa told The Post that in the year to date its total assets in the Kingdom had however risen more than “8 percent” year on year to $137 million.

According to a report published by Malaysia’s The Edge Financial Daily last week, Maybank has been keen to acquire OSK Holdings – the parent company of OSK Indochina, which was approved as an underwriter for the planned Cambodian stock exchange late last month.

But on Thursday, OSK Holdings released a statement to Kuala Lumpur stock exchange saying it has not entered into any “serious” talks on a takeover.

“The company has not entered into any serious or exclusive negotiations with any party with regards to any form of equity or strategic partnerships,” it said in a statement.

It added it continued to seek opportunities “in line with our mission to serve our clients better and enhance our shareholders value”.

Maybank declined to comment on whether it was in talks with OSK, but said it “continuously seeks and assesses various propositions and opportunities” that would bolster its ambition to be a regional financial services leader.

Global profits at Maybank – Malaysia’s largest lender, which has been operating in Cambodia since 1993 – rose 17 percent for the most recent quarter, the filing on Friday showed.

“We expect our performance for the financial year ending June 30, 2011, to be better than last year,” Maybank Chief Executive Officer Abdul Wahid Omar said in a statement.

“This quarter’s results continue to bear testimony to the group-wide transformation efforts we have embarked on since 2008.”

Net income rose to 1.03 billion ringgit or 14.53 sen a share, for the quarter, from 881.8 million ringgit, or 12.46 sen, a year ago, the lender said. That was helped by higher interest rates and increased contributions from its Indonesian unit following earlier losses.

During the last two years,  Maybank in Cambodia has expanded.

It now has eight branches operational in Phnom Penh, Sihanoukville, Siem Reap, Battambang and Kampong Cham. Maybank plans to open two more branches in the year to come.

Bourse finds first home

The first home of Cambodia’s new stock exchange has been confirmed as Phnom Penh’s tallest building, Canadia Tower.

“We have already agreed for the home stock market to be on the tower’s 25th and 26th floor — it will open soon,” Canadia Bank President Pung Khiev Ser told The Post.

As the tower celebrated its first birthday, Pung Khiev Ser said that preparations were underway to host the bourse, with wiring for a computer network set to be installed.

Earlier this year, the business community voiced growing concerns that little progress had been made for the bourse building outlined for Phnom Penh’s US$2 billion Camko City.

Yesterday, Camko City official Kheng Ser, who is assistant team project manager for developer World City Company, confirmed that construction of the stock exchange had yet to start.
“I don’t know exactly when building will start – it depends on both sides [Camko City and the Ministry of Economy and Finance],” he said.

Hong Sok Hour, director general of the Cambodian Securities Exchange, said yesterday official finalisation of deal was expected “soon”, adding the bourse’s Canadia Tower home was “just the temporary office”.

Inpyo Lee, project director of Korean Exchange, which holds 45 percent stake in the CSX, said he would follow the government’s decision regarding its home. “Your government has a deal with Canadia Tower – we just have to follow up,” he said.

The exchange is set to launch next July “at any cost”, according to a government statement.
(source from the phnompenh post newspaper, Monday, 15 November 2010 21:41 Soeun Say and May Kunmakara)

Mobitel gets NBC reprieve

MOBITEL’S Cellcard Cash programme has been given until February to fully comply with National Bank of Cambodia regulations, according to Central Bank Director General Tal Nay Im.

The money transfer service – which is run by Cambodia’s largest mobile phone provider– has until early next year to apply for a licence and formally partner with a bank, she said.

“We have given them some time,” she said yesterday.

Cellcard Cash was launched in September without oversight from the National Bank of Cambodia.

The bank issued a prakas or edict on August 17 requiring third-party processors to comply with its rules.

Several company officials could not be reached for comment yesterday, but Operations Manager Kay Lot has previously told The Post that Mobitel did not consider the programme banking.

The programme had been launched with a grant from the GSM Association’s US$5 million Mobile Money for the Unbanked program, which is largely funded by the Bill and Melinda Gates Foundation.

Last month, the MMUprogram confirmed that it had suspend all grants payments to Mobitel, but added that Mobitel was working with the NBC to develop the appropriate regulatory framework and secure a formal licence in a statement.

“To this end, the two parties have agreed to suspend the payment of further grant monies until the GSMA MMU Fund Panel is satisfied that [Mobitel] has secured all necessary regulatory approvals,” it said in a statement.

“GSMA encourages dialogue between mobile money providers and regulators, however regulation is a matter for the government in each country in which such services are developed,” the statement said.
(source from the phnompenhpost newspaper, Tuesday, 16 November 2010 15:01 Jeremy Mullins)

Without preemptive PR, new bourse could sink

THE uncertainty surrounding the stock listing of Sihanoukville Port reflects the dilemma facing Cambodia’s new exchange and serves as a reminder that a successful launch is as much about PR as it is preparations.

In June, port CEO Luu Kim Chhum told The Post the facility’s accounts had not yet been audited by an international firm. But more worrying is the lack of transparency and uncertainty over the issue when potential investors in Cambodia’s first IPOs will be looking for the exact opposite in a country still considered a high-risk frontier market.

Given the most successful stock exchanges are an exercise in investor confidence and overall operational transparency, Sihanoukville Port is already failing the first test, with help from the government.
Ultimately, the government decides when it comes to the new exchange – as shown by Luu Kim Chhum’s deference to the authorities on all questions of timing and preparations related to the IPO.

The best course of action now would therefore be to clarify what is going on. If Sihanoukville Port is not absolutely ready to list by mid-2011 then it should not do so. Question marks around the IPO would simply undermine what will likely be jittery confidence surrounding the exchange.

The port has faced a number of uncertainties recently including the debate over whether the new rail network would connect to the facility. Ultimately it will, but the ambiguity afflicting such a key element in the port’s future success was certainly not helpful as part of overall preparations.

This all points to Cambodia’s inexperience in thinking of how uncertainty is viewed from outside a company, the key to good public relations when the investor is all-important. There is little doubt that Sihanoukville Port is making a successful rebound following a difficult 2009. Plans are to develop the nearby special economic zone and Luu Kim Chhum said previously he had already sought potential Japanese investors for the zone and the port.  Also, the port is scheduled to add a facility for the delivery of oil by 2014. There are plans to deepen the draft, which would allow bigger ships to enter.

These are all huge positives for growth that potential investors will view as a guarantee that Cambodia’s largest port means business. However, a rushed IPO could undermine investor appetite from the outset.

The best way to make sure the IPO launch is steady is to think about preemptive PR. Anything less and the port’s buoyant plans for the future could sink not only itself but the whole of the exchange.
(Source from the phnompenhpost Newspaper, Monday, 15 November 2010 15:00 Steve Finch)

Saturday, November 13, 2010

Mfone affected by baht's power

MFONE faces a “price war” and intense competition among the Kingdom’s nine mobile operators, according to results from parent company Thaicom, released yesterday.

The mobile provider now claims 569,472 Cambodian subscribers, a 30.2 percent decline on 815,363 for the third quarter 2009. Mfonwe was pegged as the third largest provider in Cambodia in statistics from June, with 782,073 active subscribers, according to data complied by the Ministry of Posts and Telecommunications.

Revenues suffered at the provider during the most recent quarter. Thaicom claimed a loss of 102 million baht (US$3.5 million) in the Kingdom, compared with a loss of 25.3 million baht in the same quarter last year. Currency fluctuations in the most recent quarter hit its Cambodian revenues as Mfone reports its domestic revenues in US dollars, which are then converted to baht for reporting statements, Thaicom says.

“The appreciation of the baht [against the dollar] has caused lower revenue from the telephone business in Cambodia,” it said.

But drops in electricity costs and interconnect charges, as well as the baht’s appreciation, had decreased total costs. Thaicom holds 51 percent of Shenington Investments, which operates Mfone.
(source from the phnompenh post newspaper, Friday, 12 November 2010 15:00 Jeremy Mullins)

Exchange uncertainty


IN DATES The road towards the exchange
May 2006
Officials from Cambodia and South Korea sign a memorandum of understanding to launch the Kingdom’s first stock exchange by December 2009.
September 2009
Three state-owned enterprises, including the Phnom Penh Water Supply Authority, Telecom Cambodia, and Sihanoukville Autonomous Port, are ordered to prepare for public offerings on the bourse.
November 2009
Developers from World City sign an agreement with government officials to build a US$6 million building to house the exchange at Phnom Penh’s Camko City. The exchange’s launch is pushed back until December 2010.
July 2010
A further delay towards launching the exchange is announced by Finance Ministry officials. The Stock Exchange of Cambodia is set to launch in July 2011 “at any cost.“
November 2010
Ministry of Economy and Finance officials leave Sihanoukville Port out of a list of state-run companies set to list, saying there would be a future announcement on the matter.

GOVERNMENT officials declined to name Sihanoukville Autonomous Port as one of three state-owned firms set to list on the Cambodian Stock Exchange yesterday, raising questions over its floatation.

In September 2009, three state-owned firms – Phnom Penh Water Supply Authority, Telecom Cambodia, and the port – were ordered by the government to list on the planned bourse.

But yesterday, Aun Porn Moniroth, secretary of state at the Ministry of Economy and Finance, said the three state-owned enterprises were the Water Supply Authority, Telecom Cambodia, and “another state-owned enterprise which will be appointed later by the Royal Government of Cambodia”.

Ministry of Economy and Finance Secretary of State Hang Chuon Naron, speaking at a press conference, also said the third state-owned company to list would be the subject of a future announcement.

“At this time I cannot say exactly what the company is,” he said yesterday.

“The third company actually needs time – we don’t have an exact time as to when it’s going to be.”

Sihanoukville Port Authority Director General Lou Kim Chhun told The Post yesterday he was not aware of the exact situation regarding its listing, adding he was not an expert on the exchange.

“We always comply with the government’s decision because we are under their supervision,” he said.

The port had enough capital already for further development, he added.

Yesterday, Tong Yang Securities and its Cambodian subsidiary were announced as financial advisors to the Ministry of Economy and Finance.

Tong Yang will help prepare the state-owned firms for listing on the exchange.

“I would like to encourage Tong Yang Securities and Tong Yang Securities (Cambodia) Plc to continue scrutinising any potential issues and giving advice to the Ministry of Economy and Finance so that this project is executed in a smooth, highly effective and efficient manner,” said Aun Porn Moniroth.

The firm had signed an agreement on December 28, 2008, to act as financial advisor to the Ministry of Economy and Finance – which oversees the stock exchange – without charge.

It was also approved as one of seven underwriters for the bourse earlier this month.

Tong Yang Chief Executive Officer You Joon-ryeol welcomed the announcement, adding the firm was well equipped to handle floats by the state-owned firms.

“Tong Yang is committed to delivering the best possible results, by using our comprehensive knowledge and expertise to carry out successful IPOs,” he said.

“Furthermore, as a leading financial institution in Korea, we will continue to play our part in laying a firm foundation for the upcoming stock market and its continued growth.”

Claiming to be the first securities firm in Cambodia when it launched four years ago, You Joon-ryeol said Tong Yang was committed to the Cambodian economy and its new capital market development plan.

He added that the inaugural listings of the state-owned firms were vital for the success of the Cambodia Stock Exchange, and predicted it would become a milestone in the country’s capital market development.

Other approved underwriters said the government could appoint more firms to help the launch.

Lim Loong Seng, country head of OSK Indochina Bank – which has been approved as one of the Kingdom’s seven underwriters – said:  “Of course we would like to be selected, but it’s up to the government to decide – they can appoint anybody – one or two or three underwriters.”

Indochina sales up for Carlsberg

CARLSBERG – 50 percent owner of the brewery behind Angkor beer – claimed strong sales in Cambodia over the first nine months of the year, in a third-quarter update that came in below most analysts’ expectations yesterday.

Organic volumes increased by 23 percent in Cambodia, Laos and Vietnam during the first nine months, compared to the same period 2009, according to the results from the Danish firm.

“The growth was strong across all three markets,” it said.

Carlsberg claimed sales in its Indochina region increased at a faster rate than the overall regional beer market.

Sihanoukville-based Cambrew Ltd – 50 percent owned by Carlsberg – claims 26 percent market share in the Kingdom, and is the brewer of Angkor, Bayon, and Klang beers in Cambodia, among others.

Although Carlsberg saw strong growth in Indochina and other parts of Asia, it claimed “challenging” conditions in its Northern and Western European markets Net income was 1.95 billion Danish krone [US$363 million] in the third quarter, the company said in a statement.

That missed the 2.17 billion krone average estimate of 18 analysts surveyed by Bloomberg.

“Looking forward, we will be impacted by rising input costs and will therefore have to increase sales prices,” chief executive officer Joergen Buhl Rasmussen said in the statement. ADDITIONAL REPORTING BY BLOOMBER

SMEs call for interest rate change

Tough loan requirements and high interest rates were hindering growth among the Kingdom’s small and medium enterprises, some entrepreneurs said yesterday.

Banks generally accept only buildings and land in Cambodia as collateral, restricting capital available for businesses to expand, according to Te Taingpor, co-chair of the manufacturing and SME working group.

Speaking yesterday at the national forum between financial institutions and SMEs, he called on financial institutions to widen their definition of collateral needed to secure loans.
“Banks should evaluate the practical business situation facing each firm,” he said.

He suggested that movable assets such as vehicles or machinery should also be considered as collateral.

Cambodia has 320,123 SMEs employing 1.4 million people, he said at yesterday’s forum, which was attended by representatives of some 50 financial institutions and 300 SMEs.
Limits to loan length and high interest rates were also cited by Te Taingpor as impediments to obtaining financing to expand smaller business.

“Financial institutions should extend the limit for long term loans to SMEs from five to ten years, with interest rates below 10 percent per annum,” he said.

Heng Heang, president of Phnom Penh’s SME Association, claimed there was a large gap in the interest rates offered to large and small businesses.

“The banks lend to big companies at low interzest rates of 8 or 9 percent, while to SMEs the rates are from 18 to 24 percent per annum,” he said.

“We do not demand the interest rates to be as low as big enterprises, but the gap should not be quite so wide.”

But representatives from some of Cambodia’s smaller lenders said yesterday there were minimum interest rates they could not feasibly charge.

Sim Senacheert, general manager at Prasac microfinance institution, said it was impossible to offer interest rates below 10 percent on small loans.

“Some 80 percent of the portfolios at Cambodian MFIs are borrowed from foreign creditors, at rates of up to 10 percent interest per annum,” he said.

“And we have to add in operation costs of another 10 percent.”

The average interest rate MFIs charge is between 19.2 percent and 36 percent per year, depending on loan sizes and risk assessment, he added.

Meanwhile, larger firms received cheaper loans because they had more confidence from lenders, according to National Bank of Cambodia officials.

“Big companies have proper financial statements, paperwork and collateral, so the risk is low and banks trust those firms,” said Chea Serey, director at the NBC’s Banking Supervision Department.

“SMEs may not meet those requirements, so bankers set higher interest rates for them to prevent risks,” she said.

It was also challenging for banks to accept moveable assets as collateral for loans, she added.

Most of the money banks lend out was from depositors. Fixed assets, such as land and houses, were necessary to ensure that money was secure when lending, which is only fair to depositors, she said.

Minister of Industry, Mines and Energy Suy Sem encouraged financial institutions to grant more loans to SMEs at the forum yesterday.

Smaller firms played crucial roles in job creation and in generating revenue for low-income earnings, he said, but some 90 percent of SMEs used their own money or borrowed from families and friends to operate.

As of September, there were 28 commercial banks, six specialised banks, 23 MFIs, and 27 foreign-credit operators in Cambodia, according to NBC deputy governor Ouk Maly.
(source from the phnompenh post newspaper, Wednesday, 10 November 2010 20:04 Nguon Sovan and May Kunmakara)

Wednesday, November 3, 2010

Floods ‘not a threat to rice goal’

Cambodia is on track to exceed its rice-production targets for 2010 despite torrential rain and flash flooding that inundated large parts of the country last month.
Speaking on the sidelines of a rural development forum in Phnom Penh, Agriculture Minister Chan Sarun said he was “optimistic” this year’s output of paddy would top last year’s total by about 70,000 hectares.
“I am pleased to say that although Cambodia has been affected by the floods recently, it has not affected our rice,” he said.
“Instead, the number of our rice products will be higher than last year because we have been planting more rice fields than we planned to.”
He said the ministry had originally planned to plant roughly 2.28 million hectares of rice fields, but had actually planted 2.39 million hectares.
Flooding, which began on October 10, affected about 70,000 hectares of rice fields and destroyed 6,000 in 13 cities and provinces, he said, citing a preliminary report received by his ministry.
Yang Saing Koma, president of the Cambodian Centre for Study and Development in Agriculture, said the effect of the flooding on this year’s rice crop had been small.
“I think that the floods have not seriously affected Cambodia’s rice paddy,” he said.
“ So I agreed with the Minister of Agriculture that rice will be good and its production will increase this year.”
Keo Vy, director of the National Committee for Disaster Management, said unofficial statistics indicated that 4,553 hectares of additional crops – including cassava, sesame and soybeans – had been affected, and that some 10,000 hectares of rice fields had been destroyed, a figure higher than that offered by Chan Sarun.

He added that the report including the statistics had not been finalised.

In addition to crops, the floods had affected 30,355 homes, and six people had died, he said.

A total of nine deaths have been recorded unofficially.
(source from the phnompenh post newspaper, Tuesday, 02 November 2010 20:50 Buth Reaksmey Kongkea)

Licences granted for Kingdom’s bourse

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.
 
(source from the phnompenh post newspaper, Tuesday, 02 November 2010 19:37 Nguon Sovan)

Parking fees hit Phnom Penh

A Malaysian company has begun administering fees to motorists parking along a stretch of Monivong Boulevard, marking the first step of an initiative that is set to be expanded citywide in a bid to combat congestion and reclaim pavement for pedestrians.
Moeung Sophan, deputy director of the municipal Department of Public Works and Transport, said the paid parking scheme had begun on Monday and was in effect from Street 217, or Charles de Gaulle Boulevard, to Street 120, near Central Market.
“It is in order to create good public order and to avoid traffic congestion,” he said.
He said the scheme called for motorbike drivers to pay 500 riels, wheres car drivers would be charged 1,000 riels (US$0.25) for one hour and 500 riels for every additional hour.
An announcement issued by City Hall on October 25 said the administration of parking fees would be handled by the Cambodia office of Edisijuta Pte Ltd, a Malaysian firm.
Moeung Sophan said the company had five years to implement the scheme, during which time it would be expanded along Kampuchea Krom and Sihanouk boulevards.
The Post was unable to contact Edisijuta yesterday.
The October 25 announcement also said that municipal officials were “spiritually hopeful that with understanding and good cooperation from local people and authorities we can contribute to making the capital have better security and order”.
Some business owners affected by the first phase of the initiative yesterday expressed concern that it would deter customers.
Lu Meng, the owner of a Café Sentiment branch on Monivong, said he had been informed of the parking fees about one month ago, Cand that workers had since been busy demarcating parking spaces and pavements.
“In front of my shop it is the public sidewalk, so it is for the city officials to do what they want, but my guests will have to pay the city officials for parking,” he said. “There will be an effect.”

(source from the phnompenh post newspaper,Wednesday, 03 November 2010 12:25 Chhay Channyda)

Friday, October 29, 2010

Price index shows rise in petrol, vegetables

CONSUMER prices increased nearly two percent in September this year, compared to the same month of last year, according to government figures.

The price of fuel, transport, and vegetables saw some of the largest increases in the basket of goods – a sample of 259 items observed mainly in five Phnom Penh markets, measured by the National Institute of Statistics at the Ministry of Planning.

The CPI was up by 1.9 percent in September, compared to the same month last year. Month on month, prices rose 0.7 percent over September, a lower rate than the 0.9 percent monthly rise in August.

Rebounding demand, met by increased imports, from an improving economy was the main reason behind the CPI increase, according to Neou Seiha, senior researcher at the Economic Institute of Cambodia.

Although rising prices may affect the Kingdom’s poorest, he said there was no cause for alarm. “Prices are increasing at a manageable rate,” he said.

One of the largest gains was gasoline, which climbed 12.2 percent in September 2010 compared to the same month last year. Other large gains were seen among leafy vegetables, which increased 8.6 percent, fish was up 7.9 percent, and confectionary such as sugar, and chocolate increased 12.4 percent by the end of the third quarter compared to the same date 2009.

Meanwhile, rice prices were down 1.9 percent, and wine prices fell 6.1 percent year on year.

Consumer prices over the first nine months of 2010 were 4.21 percent higher than prices over the same period of last year, according to the data.

(source from the phnompenh post newspaper, Thursday, 28 October 2010 15:00 May Kunmakara)

Tourism Ministry links with Oz university

THE Ministry of Tourism will receive assistance from Australia’s University of the Sunshine Coast to improve education standards and sustainable planning for the domestic tourism industry.

The two parties signed a memorandum of understanding at the public university in the state of Queensland earlier this week.

The deal will see Cambodia benefit from the University of the Sunshine Coast’s expertise specifically in eco-tourism planning, as well as training tourism professionals, according to ministry Chief of Cabinet Kong Solyda.

“The agreement has the potential to strengthen and improve professional skills of employees in the tourism sector in order to attract more local and international tourists,” he said yesterday.

Minister of Tourism Thong Khon was quoted as saying the partnership would be a key element in the Kingdom’s plan to build sustainable tourism.

“So far our government has made a lot of effort to protect and preserve our natural and cultural assets, but we need more experience,” he said at the event signing on Tuesday, according to a report from the Sunshine Coast Daily newspaper.

“That’s why we called for the assistance of the international community, especially the Australian government and USC, to support us on this matter.”

Bill Carter, a professor at the university, located around 100 kilometres north of Brisbane, said it would also benefit from the partnership by opening up research and business opportunities, and by creating a student-exchange programme between the two countries.

Australia was the ninth-largest source of visitors to the Kingdom over the first eight months of 2010, with 61,627 visitors arriving from down under, according to statistics from the Ministry of Tourism.

Meanwhile, Ministry of Tourism deputy director general Neb Samuoth said that Cambodia hoped to be included in a group called the “Most Beautiful Bay in the World Club”. He said the club’s director would be paying a visit to the Kingdom’s coastal regions from October 30 to November 5.

Cambodia’s “K4” coastal areas of Kampot, Kep, Koh Kong, and Kampong Som, or Sihanoukville, were all up for consideration, he said.

(the source from the phnompenh post newspaper, Thursday, 28 October 2010 15:00 Soeun Say)

Mobile warfare

TWO of Cambodia’s largest mobile operators – Metfone and Mfone – have blocked calls between their networks this week over a disputed US$500,000 fee payment, an official said yesterday.

The Kingdom’s second- and third-largest mobile operators respectively, as measured by government data on subscriber numbers, have taken turns blocking services since Tuesday, according to Mfone Chief Financial Officer Naruemon Sriphan.

The dispute arose over more than $500,000 in interconnectivity charges which Mfone believes was owed to it by Vietnamese military-backed Metfone, she said.

Interconnection fees are levied every time a call is made to a rival network.

Mfone claims that more Metfone subscribers had been using its network than vice-versa, due to activity from Metfone’s fixed-line “Methome” phones, resulting in the half-million-dollar fee, she said.

Earlier this month, after several months of follow-ups with regard to the money owed, Mfone informed the Ministry of Post and Telecommunications about the situation, she said.

The MPTC then sent a letter to Metfone asking for payment to avoid any service disconnection, but the warning again came without result, she said.

On Tuesday, Mfone blocked calls for a “few hours” from Metfone’s Methome fixed-line phones “as a warning”, after sending a letter to the MPTC last week to inform them of the action.

“Every step we took, we took with advice from MPTC,” said Naruemon Sriphan.

“Blocking is not good for anyone, especially for the customer. But it’s not fair to us, either, to continue providing services to the partner who never thought about paying the bill,” she said.

MPTC requested that Mfone reopen its network om Wednesday. But after unblocking calls, Mfone says, its competitor blocked all Mfone calls to the Metfone network.

The Post reporters tried without success to make cross-network calls early yesterday.

Full connectivity was restored at around 3pm yesterday, according to Naruemon Sriphan.

While Mfone has still not received the fee it claims it is owed, it hopes to collect it with support from the MPTC.

MPTC Director General Mao Chakrya declined to comment yesterday.

Metfone did not respond to written request for comment yesterday, which Mfone said was submitted during the period of blockage.

The dispute echoes a row last year that saw mobile operator Beeline accuse the Kingdom’s largest provider, Mobitel, of deliberately blocking calls.

The claims came after Mobitel officials accused Beeline of price-dumping.
(the source from The phnompenh post newspaper,Thursday, 28 October 2010 17:45 Jeremy Mullins)

Friday, October 22, 2010

Passenger train service in Kingdom set to resume

map_edited
Graphic by: Andy Ball
A map showing the mainland Southeast Asia’s railway network as it stands. A projected US$1.09 billion route linking Phnom Penh with Ho Chi Minh City could complete the connection of the region’s rail networks.
Railroad commissionaire Toll Royal Railways has held preliminary discussions with the government to begin passenger service on Cambodia’s railways.
The first line of the railway from Phnom Penh to Kampot was officially declared open at a ceremony held this morning, three weeks after freight services commenced to and from the costal province.
Toll Global Logistics CEO Wayne Hunt said that though freight remained the first priority of the company, a spirit of agreement had been forged between his company and the government as the two parties worked toward resuming passenger service.
“It will happen, it’s just a matter of time,” he said, but cautioned that the service would have to be demand-driven.
A steady increase in tourists would likely contribute to demand for the passenger service, he said.
“This is about putting Cambodia’s best foot forward now, for the opportunities that are here now.”
Toll Royal is 55 percent owned by Australia-based Toll Global Logistics, and 45 percent owned by The Royal Group, according to information from the firm.
Hunt said the new railway did not expect to jump to an immediate profit, but aimed to break even within two or three years.
The railway presently employs more than 150 people, which is slated to grow to between 600 and 700 when it’s at full capacity. The firm’s investment to date has been about $5 million in the first 12 to 15 months, he said.
The ADB has loaned some $84 million towards the rehabilitation of railway, which fell into disrepair during the Khmer Rouge era.
A loan of $13 million from the Organisation of Petroleum Exporting Countries’ development agency, and grants of $21.5 million from Australia, $2.8 million in kind from Malaysia, and $20.3 million from Cambodia have also been contributed to the project.
Ministry of Public Works and Transport secretary of state Tauch Chankosal said the now reopened Phnom Penh to Touk Meas stretch will be followed by the reopening of the full 254 kilometre Southern Line to Sihanoukville in 2011, and then the 388 kilometre Northern Line linking the capital to Poipet on the Thai border.
There was a 48 kilometre “missing link” between Sisophon and Poipet on the Thai border, he said.
Presently there is no link between Phnom Penh and Vietnam, one of the last connections required to complete the Singapore to Kunming Rail Link, but Tauch Chankosal said the Chinese government had stepped in to fund a survey on building the link.
The cost of the rail connecting the Kingdom to Vietnam has been pegged at $600 million but could change depending on what the Chinese survey finds, he said.
The Asian Development Bank said the Singapore to Scotland link could be completed as early as 2015 in a statement.
ADB transport economist Peter Broch said Cambodia and the rest of Southeast Asia operated on different gauge rails than China and India, though he did not consider this a major obstacle.
“That’s a problem that can be solved on the border where the problem is,” he said.
(source from the phnom penh post newspaper, Thursday, 21 October 2010 12:09 Jeremy Mullins)

Cambodia's gold closer than ever to being mined

THE recent spate of Cambodia-focused gold mining firms seeking capital via initial public offerings is no coincidence. It is a sign miners and investors have regained an appetite for exploration and risk after a difficult period prompted by the global downturn. And Cambodia looks set to benefit.

Last year global expenditure on mineral exploration plummeted a staggering 42 percent on 2008, a sign mining companies were playing a waiting game amid low commodity prices and reduced financing options.

Cambodia was also affected, as noted by the Japan International Cooperation Agency in its February appraisal of Cambodia’s mining sector. Several mining projects were suspended, it said.

However, mining firms are now investing in exploration again, and Cambodia is due a large injection of capital.

Indochine Mining has announced it could raise up to US$24.5 million on the Australian Stock Exchange to invest in exploration in the Kingdom. Meanwhile, Brighton Mining reached its $2.16 million target after it was oversubscribed, a sign of investor appetite. Both will be followed by Liberty Mining, which announced plans this week for an IPO in Sydney. This is all capital that will be invested in finding gold among Cambodia’s 19 confirmed deposits, according to the most recent geological surveys.

OZ Minerals, which operates in the northeast of the Kingdom, has significantly ramped up investment in exploration this year. The firm spent just $11.48 million on total exploration in 2008, a figure that was raised to $16.6 million in 2009 and jumped to $56.9 million for this year, $8.53 million of which will be spent in Cambodia.

Whether this increased investment will lead to a shorter timetable for gold production in the country remains to be seen, but the opportunities surely increase.

Liberty, for example, has stated it is five to 10 years away from a commercial resource, meaning OZ Minerals and Southern Gold remain the frontrunners – both have said this year they expect to produce within the next three to five years.

Greater investment by the likes of OZ Minerals can only aid exploration. The firm announced in mid-March that it had discovered an inferred gold resource of 600,000 ounces at its Okvau concession in Mondulkiri. To start production, OZ has said it would need to identify more than 2 million ounces, a process that has already started with further exploration. Although third-quarter drilling led to poor results on the first attempt, a further two drillings are planned for the fourth quarter at this site, and results from seven drillings just 16 kilometres from the main Okvau resource are due.

Had OZ not raised spending on investment this year, this activity would be a great deal slower.

The chance of finding a resource fit for commercial production is therefore rising significantly, even though the country’s low level of geological mapping makes the task more difficult.

After numerous false starts, the hope is this increasing investment in gold exploration will mean Cambodia can more quickly join the likes of neighbouring Laos and make the most of what appear to be abundant mineral resources.

Thursday, October 21, 2010

Kingdom's property insurance sector still in its infancy

101021_13c
David Treal, managing director of AG Cambodia, at his office in Phnom Penh. Photo by: Rick Valenzuela
Cambodia’s draft law on property has paved the way for foreign ownership in the real estate sector, but despite the fact that their home countries often require property owners to buy insurance, few foreign owners in the Kingdom are opting in.

David Treal, managing director of AG Cambodia, an insurance company that caters to expatriates, says that the owners of big companies are the only people currently buying insurance. “When you see the kind of problems you can get into,” he said, buying insurance makes sense for small business and homeowners as well.

Foreigners have a higher likelihood of being held accountable for problems such as fire or injuries that arise on their property, said Treal. Yet, there is an abiding lack of confidence among property owners that insurance will actually protect them in these situations, explained Sung Bonna, the CEO of Bonna Realty Group and president of the National Valuers Association.

“People are starting to trust insurance more, but insurance companies themselves have to do more (to earn that trust),” he said, adding that the lack of exposure to potential Cambodian clients is another issue.

The notion that foreigners must mitigate their particular risk of being held liable for damage or accidents that occur on their property is difficult to support, according to Mathew Rendell, a senior partner to Sciaroni & Associates. Replying by email to questions about the importance of insuring yourself against liability claims, he wrote “I am not aware of any such lawsuits here in Cambodia.”

The banking sector, which was in a similar position earlier this decade, is an example of what better regulations and more trust could do for the insurance industry, said Sung Bonna. Private wealth expanded rapidly, however due to a lack of faith in the system, banks did not immediately benefit. Improvements in regulations inspired more trust and now the sector is thriving.

Future improvements in the regulations around insurance could provide a similar boost and give Cambodians in particular a better understanding of its value with little past exposure to the product. Sung Bonna mentioned that he has never actually heard of an insurance company paying back owners for a fire, suggesting a lack of activity in the sector.

With particularly low demand, insurance companies are trying to attract clients to their product by touting affordability. Non-portables, such as furniture, televisions and desktop computers in a rented apartment in downtown Phnom Penh can be insured against fire, flooding or storm damage for as little as US$10 per month, Treal said. A similar policy in America costs over $50 a month.

Home insurance is also relatively cheap, costing $60 to $1,000 per month depending on the value of the home and the level of protection. AG Cambodia is also gearing their products towards expat interest. Burglary insurance guarantees that the company will reimburse the owner for the value of lost items minus a $500 deductible.

The weak infrastructure for investigating lost possessions in Cambodia has prevented insurers like AG from insuring lost or stolen portable items, and even companies like Infinity Insurance, who do provide a portable product insurance package, has policies that cover a relatively narrow scope of crimes. Hann Sophat, a senior sales executive at Infinity, said that clients would still be responsible “if you take your computer into your car and someone breaks in and steals it.”

There is also insurance available for a wide range of threats to automobiles, aviation equipment, marine cargo, construction projects and people in the workplace, according to industry representatives. One thing that isn’t covered is tuk-tuks, which are seen as falling outside the parameters of what can be reasonably insured.
(source from the phnom penh post newspaper, Thursday, 21 October 2010 15:00 Julie Masis)

Bangkok to vote on border

Thailand’s parliament is set to approve the latest round of border negotiations with Cambodia, a move that could bring the neighbours closer to resolving long-standing differences over their shared boundary.
Thai Prime Minister Abhisit Vejjajiva told a delegation of visiting Cambodian journalists in Bangkok that debate on the minutes of three Joint Border Committee meetings would likely open at the Thai parliament next Tuesday.
Negotiations of the bilateral JBC have been stalled since April of last year pending the Thai parliament’s approval of the latest agreements.
“We’re just hopeful that the endorsement of the agreed minutes will pave the way for the future work of the JBC, which should help address the border issues in a comprehensive manner,” Thai Ministry of Foreign Affairs deputy spokesman Thani Thongphakdi said.
At the previous three JBC and foreign minister meetings, Thailand and Cambodia agreed to undertake joint demining and demarcation projects along the border near Preah Vihear temple, and to redeploy troops in the area in a bid to ease tensions.
At least seven soldiers have been killed in clashes in the area since 2008.
Prime Minister Hun Sen said in a speech last week that the approval of the JBC negotiations and the withdrawal of Thai troops near the temple would yield a swift resolution of the countries’ disagreements.
“If the troops are redeployed from that area, it is finished,” Hun Sen said. “We can reopen the border gate [near Preah Vihear temple] and there will be no problem.”
In August, the Thai parliament delayed a vote to approve the negotiations, prompting charges from Cambodian officials of stalling tactics.
Thani cautioned that the approval could be delayed depending on other business facing Thai legislators.
“The issue has been submitted to the parliament to add into its agenda, so it’s on the agenda, but there are a couple of other outstanding issues before we get to this particular issue,” he said.
Senior minister Var Kimhong, Cambodia’s top border negotiator, noted that such votes had been delayed several times before, and said he would wait to see the official vote before commenting on future negotiations.
“I cannot give any predictions now, but if they approve, then we will look into the issue and work together,” Var Kimhong said.
Information Minister Khieu Kanharith was set to return from Thailand yesterday after leading the visiting delegation of Cambodian journalists, who had audiences with Abhisit and Thai Foreign Minister Kasit Piromya. With the trip, Khieu Kanharith became the first government minister to visit Thailand since bilateral relations warmed in August after the resignation of fugitive former Thai premier Thaksin Shinawatra from his advisory position with the Cambodian government.
In an interview with the Bangkok Post, Khieu Kanharith warned against allowing technical issues in the demarcation process to sour the countries’ relationship.
“We need a long-term solution to border issues,” he said.“But we should start with the personal relationships between the prime ministers, information ministers and the journalist associations.”
“We can leave border demarcation to specialists in that job, and we have a joint border commission. Do not rub salt into the wounds. Prime Minister Hun Sen agrees with this.”
ADDITIONAL REPORTING BY JAMES O’TOOLE
(source from the Phnom Penh post newspaper, Wednesday, 20 October 2010 22:17 Cheang Sokha)

Tuesday, October 19, 2010

Island building: Koh Puos sales office on the way

THE firm behind the US$1 billion development on Koh Puos, off the coast of Sihanoukville, will open a sales office and showroom in Phnom Penh early next month, in preparation for launching sales at the island resort.

Located in the PGCT Centre at the intersection of Sothearos and Sihanouk boulevards, the office is being assembled, and is already staffed by a handful of employees, according to Saing Heng, assistant to Koh Puos project director Andrew Halturin.

“We have yet to set prices, but we will begin costing and selling units on Koh Puos for December,” he said.

The massive $1 billion “exclusive” development has been planned since 2007. Phase 1 of villa construction and infrastructure development on the island is set to begin in November.

In July, Halturin told the Post the first phase consisted of residential seafront villas and low-rise apartments buildings, as well as island utilities, infrastructure and a ring road.

Future phases will see hotels, a casino, and other venues are to be developed in separate steps from 2011 to 2016, according to the project’s plans.
Andrew Halturin has said the purpose of Koh Puos development was to create a world-class recreational resort.
(source from the phnompenh post newspaper, Tuesday, 19 October 2010 15:00 Soeun Say)

Plug pulled on Mobitel money transfers

An international association of mobile operators has suspended grant payments to fund Cambodia’s largest service provider Mobitel’s money transfer service following regulatory concerns.
In May, the GSM Association (GSMA) announced Mobitel’s parent firm CamGSM had been awarded a grant under its US$5 million Mobile Money for the Unbanked (MMU) program largely backed by the Bill and Melinda Gates Foundation.
Mobitel launched its Cellcard Cash money transfer service in late September.
The amount of money awarded to the provider has yet to be disclosed.
Officials have since said service began without oversight from the National Bank of Cambodia, as mandated in an August prakas.
The central bank stated last week it would act to ensure its laws were followed.
GSMA has now suspended grant payments until the situation is resolved, according to a statement obtained by the Post.
The association said that CamGSM was working with the NBC to develop the appropriate regulatory framework and secure a formal licence.

“To this end, the two parties have agreed to suspend the payment of further grant monies until the GSMA MMU Fund Panel is satisfied that CamGSM has secured all necessary regulatory approvals,” it said.

“GSMA encourages dialogue between mobile money providers and regulators, however regulation is a matter for the government in each country in which such services are developed.”

Mobitel Chief Operations Officer Kay Lot and Chief Executive Officer David Spriggs declined to comment on the oversight issue. Kith Meng, chairman of CamGSM owner Royal Group, also declined comment.

NBC Director General Tal Nay Im said there were no developments following statements made last week.

Despite the controversy, GSMA remained enthusiastic about the future of banking via mobile phone in the Kingdom.

Cambodia was ideally positioned to benefit from mobile money transfers, as fewer than 4 percent of people have bank accounts, its statement said.

Cellcard Cash’s two competitors, money-transfer service Wing, and ACLEDA Bank’s Unity mobile banking service, both function with oversight by the National Bank of Cambodia.
(source from the PhnomPenh post newspaper,Monday, 18 October 2010 21:13 Jeremy Mullins)

Campu's parent firm to focus on Kingdom

THE parent company of Campu Bank said yesterday its overseas expansion plans were focused on Cambodia and Hong Kong, after recording a 22 percent rise in global profit for the third quarter.

Malaysia-based Public Bank Group’s net profit in the third quarter reached 782.7 million ringgit (US$253 million), a marked increase on the 639 million ringgit recorded in the same period of last year, according to a stock exchange filing yesterday.

Its nine-month profit to September 30 totalled 2.2 billion ringgit (US$710.1 million), 20 percent up from 1.84 billion ringgit a year ago.

The bank attributed improved performance mainly to a 13.7 percent annualised growth in its loan book “in tandem with the improved economic conditions in the country”, the chairman Tan Sri Dr Teh Hong Piow said in a statement.

Loans for the last nine months were 151.73 million ringgit, already eclipsing the 2009 total of 137.6 million ringgit, of which Campu Bank’s contribution was 1.73 million ringgit.

A previous corresponding figure was not provided, but its 12-month total last year was 2.08 million ringgit.

The chairman said that “expansion plans in overseas operations remains focused on Hong Kong and Cambodian operations”, after noting a 14 percent increase in earnings contribution from its offshore businesses. Public Bank also has operations in China, Vietnam, Laos and Sri Lanka. It is set to open its 21st Campu Bank branch by the end of the year, Teh said, while adding two more Hong Kong branches in addition to the 81 now open.

Campu Bank chief Phan Ying Tong declined to comment yesterday, stating that he was not authorised to talk to media.

Last month, the bank cut its loan rate to 6 percent for new customers, sparking concerns of a pricing war among lenders in the Kingdom.
(source from the phnompenh post newspaper,Tuesday, 19 October 2010 15:01 Jeremy Mullins)

Cambodia, China to sign rice-export deal

THE Cambodian government is set to sign a deal with the Chinese government for rice exports later this week, according to Prime Minister Hun Sen.

Speaking at a graduation ceremony at Phnom Penh’s International Institute of Cambodia’s University of Technology, the Prime Minister said yesterday that the rice agreement would help to cement the Kingdom’s trading ties with the world’s second-largest economy

“We have begun actively negotiating with the Chinese in order to boost rice exports,” he said.

“China is also the main rice importer from Thailand and Vietnam.”

The People’s Republic is a largely untapped market for Cambodian exports, according to Hun Sen.

“We will export rice, and then cassava and other agriculture products,” said Hun Sen.

Council for National Economy deputy director Sun Kunthor said the deal would be signed Friday in Phnom Penh.

The size of the rice exports and dates of the shipments to China would be revealed at the signing event, he said.

Qian Hai, spokesman and second secretariat of the Chinese Embassy in Phnom Penh, confirmed yesterday that the agreement signing would be held this week along with the release of more specific figures.

“So far we do not know the total of how much rice will [be] exported to China from Cambodia,” he said.

Cambodia has recently updated its rice policy.

On August 17, Hun Sen targeted increasing Cambodia’s exports of the grain to a million tonnes by 2015.

The premier has also previously announced that the government would guarantee 50 percent of commercial bank lending to rice producers.
ADDITIONAL REPORTING BY SAM RITH

Blog Archive

BBC News | Asia-Pacific | World Edition

Everything in Cambodia

Loading...