No.9 (June 4, 2019)

Market Industry Trends

Venture capital firm ooctane identifies start-ups to fund. OOctane, a Cambodian venture capital firm backed by local logistics company Worldbridge group, has identified potential start-ups in the kingdom to fund, saying it has reserved $55 million for Cambodia’s growing number of entrepreneurs. the firm last first launched in June 2018 with Worldbridge Group’s founding chairman Sear Rithy investing $5 million of his own men in the fund. Now the fund has total capital of $55 million raised from friend network of Mr. Rithy.  (Phnom Penh Post)

CSX trading breaks all-time record with $29.6M volume. Stock trading at the Cambodia Securities Exchange (CSX) on May 22, 2019 broke an all-time record since its opening in 2012, as volume reached 9.45 million shares, or 120.12 billion riel ($29.6 million). A CSX press release said PAS’ stock contributed the most to Tuesday’s trading at 120.02 billion riel. Of the amount, only 0.02 billion riel was traded through the Auction Trading Method (ATM) and the remaining 120 billion riel through the Negotiated Trading Method (NTM). (Phnom Penh Post).

China steel company relocates to Cambodia. China state-owned iron and steel company China Baowu steel group corp Ltd has unveiled plans to relocate its blast furnaces from Xnjiang Autonomous region in the northwest of China to Cambodia, which will be the first overseas Baowu production plant. Baowu is looking at the feasibility of shipping two blast furnaces, with a combined capacity of 3.1 million tonnes, along with two converters to turn iron into steel, to Cambodia late this year. (Phnom Penh Post).

Malaysian poultry producer to set up Cambodian operation. Malaysia-based poultry producer Leong Hup International Bhd unveiled its plans to set up operations in Cambodia, where it already exports chicks and chicken feed, after successfully raising $247 million from its initial public offering (IPO) on the Malaysian stock exchange. A Reuters report about the firm’s debut on Bursa Securities last week quoted its chief financial officer Chew Eng Loke as saying that sales of chicks and chicken feed in the Kingdom have been promising and a warehouse is under construction to boost growth. (Phnom Penh Post).

Market Deals

JICA committed to support development of Pas port. Japan International Cooperation Agency (JICA) has expressed commitment to support the development of the Sihanoukville Autonomous Port (PAS) by continuing to provide grant aid and loans after it transferred its shares of PAS to Japanese logistic firm Kamigumi Co., Ltd., When the port listed on the Cambodia securities exchange in June 2017, JICA bought a 13.5% stake – the first time it had acquired equity in an assistance target. (Phnom Penh Post).

Second corporate bond by LOLC listed on CSX. Cambodia’s second corporate bond issued by microfinance firm LOLC (Cambodia) Plc officially listed in the Cambodia Securities Exchange (CSX) on Friday, after it was completely purchased by institutional investors when the subscription period ended on April 26. LOLC issued two types of bonds – namely FX-indexed bonds and fixed-coupon bonds – and successfully raised 80 billion riel ($20 million) for the growth of its lending business. Underwritten by Yuanta Securities, the bonds were subscribed with an interest rate of eight per cent per annum for FX-indexed bonds and nine per cent per annum for fixed-coupon bonds with a maturity date of three years. A total of 800,000 bonds were issued, valued at 100,000 riel per unit. (Phnom Penh Post).

CIMB, CapBridge to provide firms access to private capital. CIMB Bank Bhd’s recent memorandum of understanding (MoU) with Singapore’s CapBridge Pte Ltd will facilitate capital raising and trading of shares for private companies through the latter’s investment platform and the 1exchange (1X) private securities exchange. This MoU will see CIMB Bank and CapBridge collaborating to offer the bank’s customers in Malaysia, Singapore, Indonesia, Thailand and Cambodia access to private capital and liquidity through the holistic CapBridge private capital ecosystem, CIMB said in a statement on Sunday. The CapBridge Investment platform is a private capital raising platform for growth stage and pre-initial public offering (IPO) companies, while 1X is a trading platform which facilitates a buyer-seller match for private securities listed on the exchange by using block chain to register and track the shareholdings of investors who trade on the platform. The wide-ranging partnership provides a unique value proposition to CIMB’s small- and medium-sized enterprise (SME) and mid-sized corporation clients looking to raise capital and have part of their shares traded, while remaining private and in full control of their businesses. (Phnom Penh Post).

ABA set to be the third bond issuer on CSX. Advanced Bank of Asia Limited (ABA Bank), a National Bank of Canada Group member, will become the third bond issuer in the Cambodian capital market after it obtained approval from the National Bank of Cambodia (NBC), it announced on May 31. Insiders have said the move shows that the Cambodian capital market is becoming more attractive to investors. ABA Bank plans to raise 100 billion riel ($25 million) through its first corporate bonds issued in the Kingdom’s capital market. The bonds will have a maturity date of three years with an annual coupon rate of seven to 7.75 per cent. Net proceeds from the bond issuance will be used for operating expenditures as well as growth in the lending business, according to the bank. (Phnom Penh Post).

Macro-economy

Cambodia export to US surpass $1B in Q1 for first time. According to the latest trade data from the US government, Cambodian exports from January to March 2019 amounted to $1.12 billion – up 24% from $903.6 million during the same period of 2018. Major exports include suitcases and handbags under GSP program since July 2016. Cambodia imported from the US amounted to $122 million. (Phnom Penh Post).

CBC reports $6.7B in consumer credit. The total outstanding balance of consumer credit in Cambodia reached $6.7 billion at the end of March – a 7.4 per cent increase from the end of December – the latest report from the Credit Bureau of Cambodia (CBC) said. The CBC said some 1.14 million Cambodians applied for consumer credit at the end of March, an increase of 5.3 per cent from the end of December. As of March, non-performing loans after 30 days (NPL 30) reached 1.24 per cent, a slight increase on the 1.18 per cent recorded at the end of December. Consumer credit encompasses personal finance loans (51.2 per cent of all outstanding consumer credit loans), mortgages (47.6 per cent) and credit cards (1.1 per cent). Consumer credit outstanding at $6.7 billion accounts for roughly 36 per cent of the total out-standing balance of individual loans in the market. (Phnom Penh Post).