Toll Royal Railways expands

Toll Royal Railways signed two freight logistics agreements with Siam Concrete Group and United Logistics and Distribution at their offices in Phnom Penh’s Central Railway Station yesterday.

SCG Cambodia contracted TRR for the transport and warehousing for bagged cement from Touk Meas in Kampot province to Phnom Penh, said David Kerr in a press conference yesterday.

Kerr believes January 2013 will bring an additional opportunity for TRR to transport SCG’s bagged cement to Sihanoukville. 

“It’s been announced that the line will be open through to the port of Sihanoukville in January 2013,” he said. “This opens up further opportunities for us to work with SCG in the transport of domestic bagged cement to Sihanoukville and the import of up to 8,000 tonnes of coal per month.”

Beyond the line to Sihanoukville port, Kerr spoke of possibilities for transport to the north for mining products, oil and bitumen. 

He also mentioned the transport of rice into Thailand when the rehabilitation of the “missing link” between Cambodia’s border crossing at Poipet and Thailand’s Aranyaprathet is completed. However, dates for when these lines will be in operation are not yet known.

Lia Giang, ULD’s general manager, expressed similar sentiments. 

“ULD Cambodia looks forward to further development on the railway service, in particular the transport of salt and rice with the support of Toll Railway.”

The agreement with ULD is for the transport and warehousing of bagged salt from Kampot to Phnom Penh and of bagged rice from Battambang to Phnom Penh and Kampot. The first trainload of salt under this agreement was moved on September 24.

Kerr commented on the commitment from the government and the private sector to transporting goods via railways and roads. 

“The interest in Cambodia has been strong with people being interested in signing 30-year contracts,” he said. “We have a 30-year concession with the government and people are that committed to the project that they’re looking at extended terms.”

Penny Richards, Ambassador of Australia to Cambodia, was in attendance yesterday due to Australia’s involvement in the railway rehabilitation project in Cambodia. Also in attendance were Chan Sothy, director of the Department of Investment and Cooperation in the Ministry of Economy and Finance. 

Kerr mentioned the importance of railways to realising the government’s goal of exporting one million tonnes of rice by 2015. When asked about how railway transport will fit with waterways also being developed for the same goal through foreign investors, Kerr said he sees a lot of potential for cooperation.

“Where roads aren’t high developed, [the products] can come in through feeder vessels into the new river port and then they can be distributed either by waterways or by rail.”

Source: The Phnom Penh Post, Friday, 12 October 2012 by Erika Mudie

Officials trained on fake goods

Cambodia lacks the resources for implementing intellectual property rights, while relevant officers lack skills to monitor the import of counterfeit products, according to an official.  

Var Roth San, Head of the Secretariat of National Committee for Intellectual Property Rights (NCIPR) and Director of  the Department of  Intellectual Property Rights in the Ministry of Commerce, said Cambodia, among the least developed countries, faces many problems in monitoring conterfeit goods, distinguishing those from genuine products and implementing the intellectual property rights.

During a training course on identifting counterfeit products, organised by law firm Tilleke & Gibbins yesterday, Var Roth San said Cambodia lacks finances, human resources, materials and other techniques to monitor and identify fake goods. 

Seventy officials from  Customs, Camcontrol, the police, the Ministry of Agriculture, Forestry and Fisheries, the Department of  Intellectual Property Rights, public prosecutors and judges conevened to learn how to identify and verify genuine and counterfeit goods, according to a press release issued by Tilleke & Gibbins. 

Var Roth San said Cambodia produces few counterfeit goods, but many are flown in from neighbouring countries. 

“We bring counterfeit goods from Vietnam; we bring them from Thailand and China in huge [amounts]," he said. 

"China can produce everything. Anything we want to order, China can produce,” he said. Var Roth San said  most faked goods are clothing and cosmetics. 

Alan Adcock, deputy director of the Intellectual Property section of Tilleke & Gibbins, which has offices in Vietnam and Thailand, said: “The production of counterfeit goods doesn’t only happen in Cambodia or in Asia. It happens all over the world. To resolve this problem, clients need the right contracts with manufacturers.”

source from The Phnom Penh Post, 

Friday, 12 October 2012

 Rann Reuy

Cambodia to get more benefits in Mekong Region trade: ADB

Cambodia could benefit more from trade in the Greater Mekong Subregion (GMS) by implementing time and cost, cutting measures and removing constraints on exports, according to a new book by the Asian Development Bank.

“Cambodia’s exporters are well-positioned within the GMS to grow and expand,” Peter Brimble, senior country economist and author of one of the book chapters, said in a news release. 

“Policy adjustments can help reduce cost and transport times, making Cambodian exporters more competitive and enhancing their credibility.”

During a media briefing yesterday, Brimble said logistics costs in Cambodia were high compared to other countries in the region. Using the GMS Southern Economic Corridor, which links Bangkok, Phnom Penh and Ho Chi Minh City, as a case study, he identified factors contributing to higher costs and delays in cross border trade. 

According to the news release, transport costs in Cambodia are US$9 per tonne per 100 kilometre from Bangkok to Phnom Penh and $13 per tonne per 100 kilometres from Phnom Penh to Ho Chi Minh City, compared to $6 in Thailand and $7 in Vietnam. 

 With $19 to $20 per tonne per 100 kilometres, logistics costs for the Cambodian section are almost double the costs for the Thai  and Vietnamese sections.

To overcome trade constraints, the book recommends nine policy measures, prioritizing an increase in the availability of information about agreements, laws, rules and regulations; minimizing checkpoints along the corridor and expediting issuance of certificates of origin. 

“If certain improvements are made, we can cut the costs and time down significantly in Cambodia,” Brimble said during the briefing.

The book, jointly produced by AusAID, also looks at export constraints in Cambodia’s private sector, covering garments, rice and wood exporters. 

Based on interviews with enterprises and export companies in the private sector, the book identifies a lack of reliable energy supply, shortages of labour with sector-specific skills, financing limitations and government regulations among the challenges.  

“If you get trade and logistics right in countries, it not only allows the Cambodian private sector to grow and flourish but also allows for foreign direct investment,” said Gordon Peters, manager at Emerging Markets Consulting and author of one of the chapters. 

The book says despite export growth, Cambodia’s share in the total 2009 trade share of the GMS5, excluding China, accounted only 2.2 per cent.

source from The Phnom Penh Post, 

Friday, 12 October 2012

 Anne Renzenbrink

Officials trained on fake goods

Cambodia lacks the resources for implementing intellectual property rights, while relevant officers lack skills to monitor the import of counterfeit products, according to an official.  

Var Roth San, Head of the Secretariat of National Committee for Intellectual Property Rights (NCIPR) and Director of  the Department of  Intellectual Property Rights in the Ministry of Commerce, said Cambodia, among the least developed countries, faces many problems in monitoring conterfeit goods, distinguishing those from genuine products and implementing the intellectual property rights.

During a training course on identifting counterfeit products, organised by law firm Tilleke & Gibbins yesterday, Var Roth San said Cambodia lacks finances, human resources, materials and other techniques to monitor and identify fake goods. 

Seventy officials from  Customs, Camcontrol, the police, the Ministry of Agriculture, Forestry and Fisheries, the Department of  Intellectual Property Rights, public prosecutors and judges conevened to learn how to identify and verify genuine and counterfeit goods, according to a press release issued by Tilleke & Gibbins. 

Var Roth San said Cambodia produces few counterfeit goods, but many are flown in from neighbouring countries. 

“We bring counterfeit goods from Vietnam; we bring them from Thailand and China in huge [amounts]," he said. 

"China can produce everything. Anything we want to order, China can produce,” he said. Var Roth San said  most faked goods are clothing and cosmetics. 

Alan Adcock, deputy director of the Intellectual Property section of Tilleke & Gibbins, which has offices in Vietnam and Thailand, said: “The production of counterfeit goods doesn’t only happen in Cambodia or in Asia. It happens all over the world. To resolve this problem, clients need the right contracts with manufacturers.”

source from The Phnom Penh Post, 

Friday, 12 October 2012

 Rann Reuy

Former detention site to become genocide research centre

Youk Chhang (C), director of the Documentation Center of Cambodia, and Minister of Education Im Sothy sign an MoU, yesterday, Wednesday, Oct. 10, 2012. Photograph supplied

The Documentation Center of Cambodia and the Ministry of Education signed an agreement yesterday granting the historical research non-profit body an empty plot of land on the former Boeung Trabek detention centre site for a museum, school and research centre, said DC-Cam director Youk Chhang.

According to the project’s website, the Sleuk Rith Institute – whose name is a reference to the papyrus-like leaves once used by Cambodian scholars to record history – will be situated near Boeung Trabek High School, and will set out to be “the leading centre for genocide studies in Asia”, in addition to housing facilities through which DC-Cam will continue its work of recording the atrocities of the Khmer Rouge.

In addition to its school of genocide, conflict and human rights and its genocide museum, the institute, said Chhang, will be involved in examining and recommending national policy.

“DC-Cam has always been engaging the government on all issue[s] through research,” Chhang added.

Leng Bun Hong, secretary-general of the Cambodian Independent Teachers Association – which has raised concerns over the project in the past – said the union feared the institute would displace students, if not now, then in years to come.

“I think that for my idea, the [number of] students will increase more in the future, so the government and ministry should keep the school’s land to balance with student’s growth,” Bun Hong said, noting that “some areas must be preserved”. 

Chhang, on the other hand, insisted the project would represent a net gain for education.

“We will build a school, museum, research centre not only for both teachers and students at Boeung Trabek High School, but [for students] all across Cambodia,” he said.

source from the Phnom Penh Post, 

Thursday, 11 October 2012

 Sen David and Stuart White

Positive outlook for Cambodia's economy

Chan Sophal, president of the Cambodia Economic Association (CEA), talks to the i’s Deputy Business Editor May Kunmakara about Cambodia’s economic performance this year and the effect of the global economy during the International Monetary Fund and World Bank Annual Meeting in Tokyo.

How do you see Cambodia’s economic performance up to now?
Well, I do agree with some international financial institutions such as the IMF, World Bank and the ADB as well as the government’s projections of 6.5 to 7 per cent on Cambodia’s growth projections for 2012. However, I would like to point out this figure is a projection for the average growth. The highest projection is between 9 to 10 per cent. 

We can easily achieve this average rate via our opening economy with the opportunity to export to foreign countries, the flow of foreign direct investments coming in due to the amount of land to be cultivated or developed and our cheap labour force. We also notice participation from the private sector contributes to the surge to boost economic growth.

Frankly, if the government can improve more policy, Cambodia can achieve the higher growth rates starting from 10 per cent or even higher. But, we’re a bit late in improving and restructuring the policies leading to an average growth of between 6 to 7 per cent. 

Why is government a bit late in improving their policies for achieving sustainable economic growth?
There are two things to say. First is the physical issue regarding development of infrastructure, our transportation costs, electricity costs and the high production costs that are still high compared to our neighbours. The second issue is the institutional and regulation framework. 

There’s a lot of work to be done. We still see corruption and a slow implementation of the laws. What is important is that the public service is still limited due to low government officials’ salaries which leads to low morale making them ineffective workers.  

These are things the government should concentrate on if they want to achieve an equitable and sustainable economic growth which can benefit all and not just a specific group. 

What are the main factors for the country’s economic growth? 
We see four main pillars of economic growth: garment export, agriculture, tourism and construction. They are improving due to the space we have for growth. In the agricultural sector, we’ve got huge potential for development because we’ve got plenty of farming land to attract more investors to come although our irrigation does not cover all agricultural areas. 

The construction and real-estate sector is also on the surge. We see that as a potential area for growth of the economy. 

We have a lot of demand for building developments, for office space and housing. At the same time, the tourism sector has big potential for economic growth as we have a lot of cultural and eco-tourism sites – especially Angkor Wat temple to attract not only tourists in the region but also from the West. 

The garment sector is still the main manufacturing industry to induce more investment flow because the government gives investors a lot of incentives. At the same time, the industry also enjoys a lot of foreign markets with duty free and quota free on the exports. 

Despite this, exports have decreased this year due to the slowdown of the economy in the United States and the European countries. However, the demand is still there. 

How do you feel about the inflationary rate?
I don’t have much concern over the inflationary rate. Actually, we take around 5 per cent annually that is not of concern. Why do we have a low inflation rate while some of our neighbours are high? The thing is that we got an open economy with a free flow of goods. 

This year, we see our inflation is very low which is around 3.6 per cent because some of our main importing countries also have low inflation rates. 

You have joined many meetings during the IFM-World Bank Annual meetings here. Can you foresee the effect of the spillover from the West’s economy to our economy? 
The global economy projection is very low due to the Euro zone crisis so that definitely affects our exports such as garments and agricultural products such as milled rice, rice paddy, cassava and corn are also dependent on the foreign markets. 

But, if we take a look the production capacity, we’ve got an increase, especially agricultural production. 

If based on what they projected about food prices being high in the upcoming years, I do believe that some of our producers will profit. 

This will attract more and more investment flow.

Source from Phnom Penh Post, 

Thursday, 11 October 2012

 May Kunmakara

International Business Chamber moves to Phnom Penh Tower

Members of the International Business Chamber of Cambodia pose for a group photograph at the company’s office in Phnom Penh yesterday. Photograph: Pha Lina/Phnom Penh Post

The International Business Chamber of Cambodia opened a new office yesterday on the 12th floor of the Phnom Penh Tower.

IBC Chairman Brett Sciaroni said the move demonstrated a trend of business associations giving more visibility and presence for companies that operate in Cambodia. 

“This is one more indication of the professionalisation of business associations in Cambodia,” he said.

“As the IBC has increased its range of activities and its commitment to the public-private dialogue process in Cambodia, we needed more staff and facilities. Phnom Penh Tower is a leading address in Phnom Penh. We chose this location to show the significance of the IBC as a leading business association and we’re not the only business association that’s located here,” he said.

IBC executive committee member John Brinsden said the location reflected what the members deserved.

“This is a dream come true and the reason is the IBC over many years has had loyal members and we on the executive committee felt very concerned that we weren’t really giving our members the prestigious location and facilities they deserved.”

The IBC has more than 80 members, organised by company, and the people who attend are representative of those member companies, including many global brand names.

“This is something we’ve been thinking about for a long time: a prestigious office to serve our members. We provide our members and potential investors in Cambodia with a chance to meet in one place. 

We’re here with an address; we’re in the yellow pages. Visiting foreign investors, people having a look around Cambodia can come and talk to our staff and get some basic information and contacts they can use,” Brinsden said. 

IBC Vice Chairman In Channy, CEO of ACLEDA Bank, said the new location was a place where members could meet and get information. The IBC’s new executive director, Audrey Tugendhat, who runs the office on a day-to-day basis, said members of the public could visit and receive updates on the IBC social events calendar.

“For instance at the next regular general meeting which will take place at lunchtime on July 4 atRaffles Hotel, our members can bring potential candidates for membership.”

Phnom Penh Water Supply Authority shuffle no surprise

Officials and securities firms yesterday showed little distress at the imminent retirement of Ek Sonn Chan, the man credited with straightening out and preparing the capital’s public water utility for its initial public offering in April.

A letter from the Ministry of Industry, Mines and Energy (MIME) obtained yesterday by the Post said the Phnom Penh Water Supply Authority general director will leave his position on July 1 after a nearly 20-year tenure. 

Sim Sitha, the director of Sihanouk Water Supply, will replace him.

One insider compared the changing of the guard at PPWSA to the death of Apple’s Steve Jobs.

“All changes here will slightly impact the price of the company. You know that when Steve Jobs passed away, it had some impact on the price of Apple. So I think it’s the same here. I would say the fundamentals of PPWSA are very good so the price will be going up and the investors will understand,” said Min Kyoung-hoon, deputy director general of the Cambodia Securities Exchange.

“It might have an impact [on PPWSA’s share price] or it might not.”

The MIME letter, signed by minister Suy Sem, painted the general director-designate as a highly trained, multilingual professional. It also said the move was necessary to ensure the success of the company.

Svay Hay, director of Acleda Brokerage Firms, said Ek Sonn Chan’s replacement was a matter of age, and would enhance PPWSA’s productivity.

“The change will not cause any crisis or problem. It’s regarding the old age of the general director. This does not only happen in government institutions, but also in private companies. They still set the age for retirement,” he said.

Ek Sonn Chan is in his early 60s. He will become an under secretary of state at the ministry, according to the letter.

The shuffle, which insiders said would be officially announced today, did not represent internal conflict within the company and the ministry, Tan Sokchea, an official at the ministry’s clean water department, said yesterday.

“It’s not relevant to any kind of corruption. Normally, when we come to the age of retirement, we should follow because now the government is really strict about that,” he said.

Tan Sokchea also recognised Ek Sonn Chan’s contribution to the company. “Frankly speaking, he possessed excellent leadership.” 
(source from Phnom Penh Post, 

Friday, 29 June 2012

May Kunmakara)

MFIs still seeing significant growth

Outstanding loans and deposits in 28 of Cambodia’s microfinance institutions rose between 30 and 40 per cent year-on-year in 2011, official data from the Cambodian Microfinance Association indicated.

The CMA’s data showed outstanding loans rose 41.5 per cent from US$916.3 million with 1.3 million borrowers in 2011, compared to $647.8 million with 1.22 million borrowers a year earlier. 

Deposits grew by 32 per cent to $1.26 billion with 1.1 million depositors, compared to $952.2 million with 36,776 borrowers in 2010. MFIs in the Kingdom first began to take deposits in early 2010. 

Non-performing loans (NPL) declined from 1.3 per cent of the loan total to 0.4 per cent. Officials and insiders said a strong macro-economy performance and clear regulations were responsible for the shift.

National Bank of Cambodia director general and spokeswoman Ngoun Sokha recognised the favourable direction the economy was heading, especially in the agricultural sector, which she believed was responsible for the rising demand for loans.

“The government supports the agricultural sector, especially the export of milled rice. So we promoted the adoption of MFI loans for agriculture and actually received a lot of growth in that area, adding up to more than 50 per cent of all loans,” she said. 

Bun Mony, director of CMA and chairman of Sathapana Microfinance, told the Post that loan portfolios at Sathapana rose about 65 per cent to $94.6 million compared to $57 million in 2010. The number of borrowers grew from from 43,565 to 55,001.

“There was a high demand for loans as business activities continue to grow, and we don’t even seem to have any problems with repayment,” he said, adding that the NPL rate declined to from 0.93 per cent to 0.22 last year.

Sathapana provides loans to all sectors, with 40 per cent going to retail and small businesses, and more than 20 per cent to the agricultural sector.

The country’s biggest MFI, Prassac Microfinance, reported that by December 2011 its gross loan portfolio was $151 million, an increase of 43.6 per cent, with active borrowers increasing 10.9 per cent to 125,127.

“In general, I think that the industry performed well last year because all MFIs grew their portfolios while the NPL rate decreased,” Sim Senacheert, president and CEO of Prassac, said.

Prassac loans to the agricultural sector accounted for 33 per cent of its total portfolio, with trading and service making up 47 per cent.

Hout Ieng Tong, general director of Hattha Kaksekar Microfinance, reported that loan portfolios rose 70 per cent to $75 million with 62,703 borrowers, from $44 million with 47,952 borrowers the year pior. 

He added that NPL declined from 0.9 to 0.07 per cent, and that agricultural loans accounted for 35 per cent of total stocks at his compay. Sathapana Microfinance’s total deposits rose 129.4 per cent from $39 million to $17 million, while Hattha Kaksekar’s total deposits grew more than 160 percent to reach $15.78 million compared with only $5 million the year before. Prassac reported smaller increases, as its operations just began in mid-2011.

The successes are tempered, however, by the uncertain economical fates of the EU and US, where much of the industry gets its primary funding. “We are a bit worried,” said Bun Mony. 

“We see the EU in a crisis, and think there could be some slight impact on us, specifically regarding investments.”

Ngoun Sokha suggested a solution, saying, “We try to teach MFIs good governance, and to strengthen their internal capacity for infrastructure, so that they will be able to easily seek a source of funds domestically rather than just looking abroad.”

PM pushes edible exports

Prime Minister Hun Sen yesterday urged Cambodian food and beverage companies to look to export markets. 

The call, made at the opening ceremony of the Khmer Brewery, came in the wake of similar exhortations from international organisations for Cambodia to diversify its exports.

“Now, we are not only expanding our locally made products in the domestic market. We have to promote export products and beverage abroad,” Hun Sen said. “The big problem for us is to make sure that we what produce is good quality and affordable at that segment of the market.”

In 201, the food and beverage industry contributed about US$1 billion to gross domestic product, 40 per cent of it from the brewing industry. 

Khmer Brewery, one of six breweries in the country, planned to export its Cambodia Beer brand, company chairman Leang Khun said yesterday.

“We will soon start exporting Cambodia Beer to developed countries such as Japan, the US and the European Union,” he said. 

The $60 million local investment has produced beer since late last year. 

Yesterday was the official opening of the factory, which is located in Phnom Penh’s Dangkor district.

Ngov Heng Fish Sauce Cambodia exported its sauce to the US until 2009 when the company ran into some capital constraints, owner Chan Sitha said yesterday. 

He said more government support was needed for small- and medium-sized enterprises (SMEs) to succeed on the international market. 

“We did not have any problem with our exports to [the US] in terms of quality, something that was recognised as being good. But, the problem for us was the money. This business takes time and more money,” Chan Sitha said. “Of course, I plan to resume my exports but now I need to seek more capital. The government should help us if they want SMEs to export more.”

General director at the Men Sarun Mee Yeung noodle factory Linh Thorn told the Post earlier this year that his factory would look to export to the United States and Europe in the near future. 

Cambodia’s domestic food and beverage industry was strong, Suy Sem, the Minister of Industry, Mines and Energy, said at yesterday's ceremony.

When the country’s garment industry was ailing during the global financial crisis in 2009, the value of the food and beverage industry had continued to rise, he said.

The Phnom Penh Post, 

Mom Kunthear Tuesday, 15 May 2012

Will pressure make Chinese aid more transparent?

Critics have long characterised China as a secretive donor in economically poor but resource-rich countries, funding infrastructure construction in an unspoken bid for business deals and access to natural wealth and land. 

While China disburses aid with a scant paper trail, analysts say strong-arming its government to boost transparency – and aid efficacy – may hurt countries in need. 

Chinese-funded projects have become ubiquitous in Cambodia, Laos and Myanmar, countries once passed over by traditional donors. 
In river-rich Laos, a government development plan calls for 55 new dams to generate hydroelectric power, many of them funded by Chinese state-owned companies. 

Media there reported that China’s government recently signed five agreements pledging more than US$30 million to build government offices. 

Prime Minister, Hun Sen inaugurated one of the largest Chinese construction projects in the Cambodia in December 2011, a dam in Kampot province. This project comes on top of $1.2 billion the Chinese government pledged to Laos in 2010 - more than any other bilateral or multilateral donor. 

Officials also welcomed Chinese aid in August 2011, when the World Bank suspended new loans to Cambodia after finding that a Bank-financed land-titling project failed to secure property rights for residents facing eviction. 

Cambodian leaders – including the prime minister – have repeatedly stated they are not worried about losing World Bank loans because they prefer “no strings” Chinese aid. 

Elsewhere in the region, media have reported ongoing talks between the Burmese government and the China Power Investment Corporation to restart construction of the US$3.6 million Myitsone Dam, which Burmese president Thein Sein suspended in September 2011 over concerns about transparency and environmental damage. 

Despite the chronic tensions between China and Myanmar over drug trafficking, refugee outflows and ethnic conflicts along their shared border, the Chinese government is one of Myanmar’s largest investors.

“China’s aid is focused on infrastructure, which is badly needed in developing countries,” said Wang Yong, director of the Centre for International Political Economy at Peking University in Beijing. “By comparison, US aid is more driven by strategic and political objectives.” 

With almost no information available about China-funded projects in the public domain – including their potential environmental impact – EarthRights relied on company press releases and government statements. Other NGOs in the region have complained that environmental impact assessments are often not open to local communities or there is too little time to comment. 

Chinese aid is disbursed in line with its policy of staying out of other countries’ governance, as laid out in its April 2011 aid position paper.

“It might interfere in other ways, like currying favour and obtaining sweetheart deals for its companies…Their Ministry of Commerce determines the aid, which tells you just what’s driving their considerations,” said Sophal Ear, a California-based political economist specialising in aid and governance. 

China’s estimated US$3.18 trillion in foreign exchange reserves can be enormously” transformative for poor countries, Ear added. 

Pressure pitfalls 

Aid watchdog NGOs like the London-based Publish What You Fund use publicity to urge China to be more forthcoming with its aid figures, hoping such scrutiny will help money get to the people who need it most. 

The NGO lists China as “very poor” in aid transparency, ranking it the third least transparent donor out of 58 ranked last year.

Its position was determined by 38 indicators, such as the passage of freedom of information laws and participation in the International Aid Transparency Initiative (IATI), a London-based group of donors and NGOs that have set aid disclosure standards. 

“The problem is that China is not systematically releasing its information,” said Karin Christiansen, Publish What You Fund’s director. 

While transparency is a good route to achieving aid effectiveness, pressure may not work, said Ear. Strong-arming China into transparency will lead to a “backlash” of even less transparency, he added. “They value their sovereignty more than most countries. They see it [as] inviolable.” 

Still, said Christiansen, the group’s approach is credible because it does not require “changing what they [China] are actually doing, but about becoming more transparent on the approaches they are already taking”. 

South-South rules 

The country is increasing aid transparency at its own pace, say observers. Last December, China publicly declared transparency a principle it upholds when it signed an agreement at the Fourth High Level Forum on Aid Effectiveness held in Busan, South Korea. 

The word “transparency” appears four times in the document, which includes a pledge of “zero tolerance for all corrupt practices”. It also notes that “the nature, modalities and responsibilities that apply to South-South cooperation differ from those that apply to North-South cooperation”, and the complexity of “new actors”, who may still face poverty at home but want to share lessons and experiences along the way. 

Unfavourable attention may have prompted China to become more public about its aid policy, said Wang. “The Chinese government does care about its international image and the international media.” 

Even with the will to boost aid transparency, China still faces a “diplomatic dilemma” in enforcing it: to meet compliance both sides must be willing and able, and recipient countries with weak governments often have poor aid oversight. 

“To carry out this principle [transparency] is not so easy in practice because it is influenced by circumstances of the governance structures of recipient countries and diplomacy, sometimes requiring some form of confidence,” Wang said.

The Phnom Penh Post, IRIN Tuesday, 01 May 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.