Wednesday, April 18, 2012

PPWSA stock to list today

Investors, along with the next two companies expected to list on the Cambodia Securities Exchange, will watch carefully this morning the action on the country’s first initial public offering, nine months after the CSX officially opened.

After a book-building process that was 17 times over-subscribed, Phnom Penh Water Supply Authority shares will sell at about a penny below the maximum bidding price originally set by the Securities and Exchange Commission of Cambodia. 

PPWSA was valued at 6,300 riel, or US$1.57, a share in late March, and 514 investors bought 474,143 shares during book-building.

Investor behaviour today would have a significant impact on the listing of Telecom Cambodiaand Sihanoukville Autonomous Port, the two state-owned companies also expected to list this year, Tong Yang Securities (Cambodia) managing director Han Kyung-tae said.

Tong Yang is the underwriter for PPWSA and Telecom Cambodia.

“Everybody is excited to see the movement of the price, and it will definitely have an impact on the other companies,” Han Kyung-tae said. 

The price today will be allowed to fluctuate upward by as much as 50 per cent, and downward by 10 per cent, although some analysts have said the price is already high for a public utility.

From tomorrow, prices will be allowed to rise or drop by five per cent in a given trading day.

Despite shares being valued at the high end of the spectrum, strong annual growth at the water monopoly and a diversified base of retail and institutional investors would allow for price increases, Han Kyung-tae said.

The Lao Securities Exchange, which launched in January last year, saw an 86 per cent increase during the first three weeks of operation, but shares in its two listed companies have since fallen by about 50 per cent.

“If the market has many speculators, the price will boom for a while, then drop sharply,”ACLEDA Securities president and managing director Svay Hay said, pointing to the Lao and Vietnamese exchanges as an example. 

“Cambodia learned a lot from those two markets and other markets in the region.”

But high demand for PPWSA shares would contribute to stable trading and reasonable price fluctuations, Svay Hay said. 

With a $1.57 share price and expec-ted 2012 earnings of $0.08 a share, the stock would trade at an 18.7 price-to-earnings ratio – a sizeable jump over comparable companies researched by SBI Royal Securities in March.

A trial run incorporating all elements of the CSX system had not yet been carried out, a source close to the bourse, who did not have authority to talk to the media, said yesterday. 

Although no technical errors are anticipated, the lack of testing has generated some unease among brokers. 

“There’s a lot of things that haven’t been tried out yet. When trading starts tomorrow, the system has not been completely tested. Anything could happen.”

A previous version of this story incorrectly stated that Electricite du Cambodge was slated for an IPO this year. In fact, it was Sihanoukville Autonomous Port.

Tuesday, April 17, 2012

Cambodia’s Song Saa Islands: An Isolated Eden


A few nautical miles from the scabrous Cambodian port of Sihanoukville lies a little pair of islands known in Khmer as Song Saa, “the sweethearts.” Among the 60 islands of Cambodia’s secretive coastline, they are, as brochures put it, lost. No one would know they were there were it not for the motor launch that leaves in the afternoons from the Sihanoukville port laden with the odd solitary millionaire in a linen hat and Prada espadrilles.


The sweethearts are uninhabited. They are Koh Ouen and Koh Bong, now occupied by a single “resort”—though the word seems over-hustled for a place that remains quietly separated from a coast that war and civil war have preserved in a state of beautiful ruin. A place made beautiful, if you like, by failure.

When I was living in Phnom Penh, I used to come to Kep, the old French provincial capital further along the same coast. The islands have much the same aesthetic: the French houses standing in isolate and magnificent desperation, the mangroves and narrow beaches and slopes of rainforest bristling with cashew trees. Ravaged by the Khmer Rouge, Kep had not yet recovered. But its charm was invested in a slow-burning decay, which expressed its isolation from an outside world that could never—in its imagination—separate Cambodia from her genocide and her unwilling role in the Vietnam War. While Thailand rushed to despoil her islands, Cambodia was left to abandon hers.

Pol Pot had the Cambodian islands evacuated in 1977. For a time they were home to Khmer Rouge fighters and no one else. On Koh Rong, a larger island next to Song Saa, with its rainforests the size of Hong Kong, they set up their base camps and gun emplacements. (In an obscure incident of that time, 25 American Marines were killed in an ill-timed island fire-fight.) But history moved on. The fishing families returned, and 30 years later an Australian couple, Melita and Rory Hunter, stumbled upon the sweethearts, like a vision—if you’ll forgive the cliché—from the movie Castaway.

The Hunters had founded a company called Brocon, which pioneered the renovation of French colonial buildings in Phnom Penh. Brocon set out to create an island resort that would, like its developments in Phnom Penh, hold together the fragile texture of Khmer society. For one thing, they nobly decided to create a marine reserve inside which the locals were no longer permitted to fish by dropping cyanide into the water to stun their prey. But what did the Western rich really want when they ventured down to the seascapes of a country like Cambodia? What were they looking to escape from, and what did they want to intrude into?


Song Saa, Private Island Resort
The oceanfront villas in splendid solitude., Sunya Thadathanawong

Americans know the Tom Hanks film version of Castaway, made by Robert Zemeckis in 2000 (alas, because the earlier, Nicolas Roeg version is far better). The original novel, however, was published by a young Englishwoman named Lucy Irvine in 1983. The 25-year-old Irvine had answered an ad in a London paper placed by a middle-aged adventurer named Gerald Kingsland asking for a “companion” to go live with him on a deserted island in East Asia. Kingsland and Irvine spent a difficult year together on the island of Tuin in New Guinea. It was the Crusoe fantasy with a sexual edge. The human couple forced together by their isolation, by the material magic of a tropical island from which there was no easy escape. It is, on rereading, a beautiful and haunting book, and it holds the clue to a peculiarly contemporary longing: a yearning for a temporary but primitive solitude defined by the sea. That, and a much-needed simplification of sex.

There have been so many versions of this myth—Swept Away is another—that one wonders if industrial society’s unhappiness is leading it to search further afield for a release that now has to be contrived with the aid of technology. The original title of Lina Wertmüller’s 1974 original was Swept Away by an Unusual Destiny in the Blue Sea of August. Here, the paradise island was a rougher place that stripped men and women down to their biological roots. Yet all the time I was on Song Saa I thought of those Wertmüller landscapes. The rocks, the deceptive waves, the somnolent forests, and a subtle strangeness—a kind of species memory—emanating from them. Islands represent something mysterious to us because they offer the hope that we can be human in our original Eden, but without other humans. We know that this is neither true nor possible but, wonderfully enough, we are poetically indifferent to our own realism.

Friday, April 6, 2012

Technology comes to the classroom

Tucked away behind a high wall on Mao Tse Tung Boulevard is a collection of brash red, white and blue buildings, home to one of the most recent additions to Phnom Penh’s English-language schools, the American Education Center. 

The Director of the AEC, the aptly named Janet English, says what the school offers its students is different from most schools. 

“The AEC was set up to do something different from the traditional language teaching. We’re computer based, using technology, and then the students go into the classroom and do activities based on what they’re learning on the computer, using the same language structures. So we have no textbooks, although some students wish they had them,” she says.  

Originally from Edmonton, in the west of Canada, English says the opportunity to work in Cambodia was too good to miss. “I spent nine years in China, all over, the last four years in Beijing. But I felt I’d been in China for a long time, and Cambodia presented a lot of opportunities. This school was opening and looking for someone experienced to run it, and I had the background as a director of studies. And I’m very much enjoying being here.” 

The focus of the school’s teaching is less on academic achievement, and more on communication. “We have different programs, hospitality English programs, and we do a writing program. Our basic set-up is that we try to teach listening and speaking first, the same way we all learn our first language.” However English stresses that the teaching is as rigorous as possible, and of an international standard: “If somebody goes through and gets through to the advanced level, they should have no problem passing their IELTS (International English Language Testing System), their test of English language proficiency.” 

All of AEC’s teachers are foreign, except for at a very basic level, where they use Khmer, and the school goes to a great deal of trouble to pick the right staff. “We like to find teachers that are fairly stable and set up here. We’re very selective about who we hire, so that can present difficulties, but we do have very good teachers.” 

While the school’s innovative use of technology is different from other establishments, it is proving popular in Cambodia. “We’ve been open about nine months. We now have about 300 students. It’s growing. It takes time. We take students from 10 years old all the way up: we’ve even got some students who are in their fifties.”

Is she optimistic about the educational future in Cambodia? “Oh yes,” she replies. “People are hungry to learn. We have students here who’ve just enrolled for their fourth term, they’re realising that they can speak easily now, and their listening is much better when they’re talking to foreigners, and they’re very enthused by that.” 

English would eventually love to roll out the AEC concept across the kingdom. “I’d love to see us do that, not least because I’d love to travel to places like Siem Reap and Battambang, and live there for a while, but I think it’ll probably take us a while to get a really firm base here. But we can do sessions using Skype, for students from around the country, which works out really well, and we’ve got some really enthusiastic students.”

Make sure you get your US visa


Applying successfully to a US university is not enough. Students also have to get a visa.

Cambodians thinking about studying in the US should remember that being accepted at a university also means getting a US visa, which is not always easy.

US visa consultant Wayne Weightman says Cambodians wanting to go to the United States are facing an 80 per cent visa denial rate.

“All the front end expenses will be wasted if you don’t get the visa,” he said.

Weightman, who has been helping Cambodians get US visas for the last 11 years, says students have to show the same things that tourists and businessmen do in order to qualify for US visas.

“You need to show you’re going to come back and that you’re not going to live and work illegally.  You need to show that you have strong ties to a residence outside the US, and that you have family, economic, financial, community and social ties in Cambodia.”

Weightman says that’s tough for students because they’re so young and most of the time they don’t have children yet.

“In addition to showing you’re going to return when the studies are done, you also have to show you are serious.  You need a passport; you need to register with the SEVIS, a US government student registration program which costs $200 to register, and is non refundable.”

It costs $160 to apply for a US visa and it is also non-refundable.

Weightman advises his clients to tell the truth, put their best foot forward and be prepared.

“Many Cambodians have never been to the US and this is going to be their first venture away from Cambodia,” he said.

Weightman says many of the visas that are denied are probably denied because the people have not presented their US plan well.

“Their situation might look like they really want to go to work and live in the US as opposed to being a serious student.”

Weightman also advises students to transfer as many Cambodia university and schooling credits as they can to the US universities they apply to.

“Cambodians might go to university for three years and feel like they need to repeat that because they might feel the quality of their school was not good enough,” he said.

“If a student might want to get credit for what they did and see if that work can transfer, and they might get credit for two years here, and they  can get credit and complete their US schooling for half the time and for half as much money, and move on and get a master’s degree as well,” he said.

Weightman’s company, Phnom Penh-based American Visa Advisory, US licensed immigration and naturalisation experts, will be present at Diamond Island on Saturday and Sunday running seminars and helping people prepare for applying for universities and visas in the US.

“We will be offering seminars to let people know how to prepare for their visa,” he said.

The first 10 registrants will get a discount to attend a $335 seminar course on how to get a visa.

“We’ll be having a lucky draw so people can attend the seminar at a very low price,” he said.

“I want to help people make it through the process and not have a problem.”

Weightman has helped a number of Cambodians get into Southern New Hampshire University, a small university in Manchester, New Hampshire on the United States’ east coast.

“I think it is an excellent school for a lot of Cambodians,” he said. “They’ve got 60 undergraduate and graduate programs in business, education, hospitality, community economic development and liberal arts. They cost about $25,000 per semester and have a very inexpensive summer session,” he said.

For a US bachelor’s degree education, Weightman estimates it will cost from $40,000 to $50,000.

“These universities are well respected and there’s no denying that. If you want to come back to Cambodia to work in the government or the private sector, a US degree carries a lot of weight.

Weightman himself is a graduate of the William S Richardson School of Law at the University of Hawaii.

He can be reached by telephone at 012604698 or by email at care@ezusavisa.com



Stuart Alan Becker Friday, 06 April 2012

American Education Fair this weekend at Diamond Island

American universities are looking for bright Cambodian students tomorrow and Sunday at Diamond Island in a two-day event called the US Cambodia Education Fair.

Organiser Ruwan Hulugalle, a former employee of the US Embassy’s economic and commercial section, first had the idea in 2008 when his responsibility was to promote US trade and investment.

Now, four years later, with support from the US Embassy, Hulugalle’s original idea has come true, with more than 20 American educational institutions on display along with Pannasastra University and a language school called the American Education Center in Phnom Penh.

“At the embassy I was in charge of trying to bring more trade to Cambodia, but now it’s universities and an education system.”

Hulugalle says that during the 60th anniversary of diplomatic relations between Cambodia and the United States which was celebrated in 2011, the Royal Government of Cambodia specifically requested more educational cooperation as a way to improve the bilateral relationship.

“When Secretary of State Hillary Clinton visited Cambodia, during a town hall meeting, she said she would like to explore more ways for Cambodians to access US educational opportunities,” he said.

“So we believe now is the time and we’re very proud to be the creator of this event and we’re very proud in our assessment that from 2012 forward American universities and educational institutions will be visiting every year.”

Hulugalle says the great thing about American educational institutions is that they offer the best opportunities.  

“People can come to Diamond Island on April 7 and 8 and they can learn a lot,” he said.

“We’re having panel discussions for the whole two days. They can learn all about American education, how to prepare an application, how to apply for scholarships, how to improve your English language skills, how to be a better student and how to apply for an American student visa,” Hulugalle said.

It is recommended that good students and their families attend in order that they get the help they need to select the best place to learn.

“This is a chance for bright, high-achieving students to have a chance to meet people and learn about American universities.”

Hulugalle says the reality is that American education is expensive for many Cambodians, so the idea is to promote more partnerships as well as attracting Cambodian students.

“We want all Cambodians to have a higher level of education, so we’re trying to promote more partnerships.  We’re proud to have Pannasastra University as an exhibitor.  They are an example of how education can be offered to more Cambodian students.”

After his experience working at the US Embassy in Phnom Penh, Hulugalle returned to the United States to visit his parents and decided to return to Cambodia.

He joined Pannasastra University and taught political science, conflict resolution and international law.

“I incorporated community service learning, getting the students to go out and work in the community with poor or marginal people, and they come back and report on that, and get a better understanding of their society.”

As for the US Cambodia Education Fair, Hulugalle believes this is the right event at the right time because as of 2011, there were 340 Cambodians studying in the United States, nine of whom were Fulbright fellows.

“If you look at neighbouring Vietnam, one out of 6,700 citizens are studying in the US right now, and in Cambodia the proportion is only one out of 38,000 in the US, so we consider both countries to be on a relatively similar level of development, so it seems the opportunity to get more students to study in the US is present in Cambodia today.”

Hulugalle himself got a degree in government and international relations from Georgetown University, an Ivy League school near Washington DC, followed by a Master’s degree in International Relations from the University of San Diego.  

Later, he earned a law degree from the University of Hawaii where he was a fellow at the famous East-West Center.

Today he runs a company based in Tuol Kork called RHC, a business and legal consulting company. Hulugalle says he made the decision to create the US Cambodia Education Fair because of working in Cambodia’s education sector for more than four years.

“I knew the demand was there for more American standards of education. I knew the need was here to improve the human resource base, so I took it upon myself to conceptualise, fund, and organise the US Cambodia Education Fair. The Embassy connected us with Education USA which is funded by the US department of state whose mission is to promote US higher education around the world,” he said.

“We intend to create interaction between American and Cambodian institutions to develop partnerships and raise some education standards in Cambodia and create educational opportunities for students here in Cambodia,” he said.

Leaping for loans: Young Cambodia on a budget

"How long will it take for me to save in order to own property?” has become a common question for young Cambodian couples looking to move in together, as housing prices rise across Phnom Penh. 

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Phann Chandara, a trainer at the International Centre for Conciliation, expressed his concern when approached with this question.

“My salary is about US$300 per month, so it’s impossible for me to be able to buy a house,” he said.

The 25-year old continued: “Of course it would require a lot of financial support from different parties, like my family and or the government.” 

According to statistics released by the Ministry of Economics and Finance, Cambodia’s economy is growing at about six to seven per cent year-on-year. This rate is considered high when compared with other countries.

On the other hand, Cambodia faces many problems regarding economic growth. Challenges include the widening gap between rich and poor, low wages, increasing price of goods, and high unemployment rates – all of which are unresolved issues.

These challenges are enormous barriers for the future of young Cambodians looking to prosper in the new economy by owning their own property.

Cambodia’s bank sector is developing rapidly to satisfy people’s needs when facing these problems.

Oum Chan Mony, an information provider at ANZ Royal Bank, said that giving out loans to buy property is now on a special promotion: if customers are purchasing a home between $50,000 and $100,000, the bank will provide 60% of the loan upfront and the customer has the option of paying back the money in instalments spaced out over a span of 20 years.

Although it sounds good, there are specific requirements to qualify. 

“Before customers can qualify for the loan, they must earn at least $850 per month, they will have to leave their passbook in the bank, and will have to pay 20% of their gross salary monthly,” Oum Chan Mony explained.

While ANZ’s offer seems efficient, the bank rate is considerably high and those who make an average salary don’t qualify. Actually, take this example: if you take out a loan of $30,000 to buy a property at a rate of 10%, and need to pay it back over 20 years, a short calculation shows that you will end up paying the bank $60,000.

That’s double the original loan.
According to Dith Channa, an experienced realtor and general manager of VMC Real Estate, “It is obvious that it is quite hard for our youth to own a house own their own.”

Dr Beng Hong Socheat Khemro, Deputy General Secretary of Council for Land Policy at the Ministry of Land Management Urban Planning & Construction, said: “Actually, it is not only our youth that lacks the prospect of buying houses – but also all over the world. For instance, in Norway, where I have been, if youth want to move out from their parents’ houses, normally they are supposed to rent the places.” 
He also confirmed that our government is taking the case of Residential National Policy into consideration; and in theory, youth should learn the value of saving if they want to own their property.



Vannak Oum and Banung Ou 

Wednesday, 04 April 2012

Thursday, April 5, 2012

CLSA: Southeast Asia To Get Even Richer


Bloomberg
A shopper carries a Chanel shopping bag in Marina Bay Sands in Singapore.
Congratulations, Southeast Asia – it looks like you’ll have even more millionaires soon.
That’s one of the findings of CLSA Asia-Pacific Markets, a brokerage and financial services group, which is now joining the chorus of voices predicting Southeast Asia will take on a bigger role in the regional economy as it continues to integrate its markets and attract more foreign direct investment.
In its latest report on the region, CLSA found that the number of high net-worth individuals – people with over US$1 million in investable assets, excluding their homes – is set to rise so fast as Southeast Asia’s economy grows that their spending power could double within five years, reaching 400,000 individuals (from 193,000 today) with more than US$1.8 trillion in wealth.
This is a conservative estimate, says Amar Gill, head of thematic research at CLSA, because it doesn’t include high net-worth individuals from other parts of the world that are likely to move to the region in the coming years, especially to Singapore.
Mr. Gill also predicts that the expanding middle class in Southeast Asia will continue to shake up the region and attract more foreign direct investment. As this investment helps propel growth in rural areas, moving people from farms to factories, the group predicts that the percentage of the region’s people classified as “middle class” will increase from 18% in 2010 to 25% in 2015. That, in turn, should lead to more consumer spending, which itself will feed faster economic growth.
Of course, this is not the first time that financial analysts have predicted a big Southeast Asian resurgence, only to see countries such as Thailand fail to attract as much investment as they predicted. Southeast Asia was once among the hottest spots in the world for foreign investment, in the 1990s, but at times it has struggled to generate excitement since then as China and India have caught fire.
More and more researchers are touting Southeast Asia now, though, as uncertainties about China increase. CLSA says Southeast Asia is entering a “sweet spot” for investment – particularly as China loses its competitive edge with a more expensive labor market, while India remains a “regulatory quagmire” for investors, according to Mr. Gill.
Another reason, he says, is that Association of Southeast Asian Nation (Asean) countries are moving towards closer integration, which should create more opportunities and boost Southeast Asia’s profile. Asean countries have already taken steps to reduce trade barriers and are looking to further integrate labor markets and financial services by as early as 2015.
Mr. Gill said he remains hopeful there will be considerably more economic cooperation, though he admits there may be some delays. A so-called “Asean Trading Link,” which will allow investors to buy and sell shares in any of the participating markets while settling transactions at home, has already faced difficulties with some countries still unwilling to fully sign on.
Integration notwithstanding, CLSA says the numbers behind Southeast Asia’s rise speak for themselves. While many investors continue to worry about China’s future growth prospects, the group’s research shows that investment in Southeast Asia has approximately tripled since 2008 and continues to be on an upward trend, led by countries like Indonesia, which received a record amount of foreign investment last year.
One potential risk is that a slowdown in China could dent growth in Southeast Asia, which relies heavily on Chinese demand for locally-produced commodities such as palm oil and coal. But Mr. Gill says that Southeast Asia’s “internal dynamic” and the buying power of its growing middle class will be enough to sustain the region’s prosperity.
CLSA, which is presenting its report to corporate investors in Bangkok at a forum ending this week, has also offered their picks of the best Southeast Asian companies to invest in. They include AirAsia, Malaysia’s Genting Bhd. and its Singapore branch, Genting Singapore, Indonesia’s Bank Rakyat and Bangkok Bank, all of whose stocks could provide 70% returns in the coming years, CLSA says.

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