Cambodia considers sovereign bond issue

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Cambodia1Cambodia has reiterated that it is mulling the issuance of sovereign bonds, it emerged at the Asian Development Bank (ADB)’s annual summit in India on May 1.

Standard & Poor’s credit rating for Cambodia currently stands at B, while Moody’s rating for Cambodia sovereign debt is B2, which means non-investment grade/highly speculative.

Cambodia has been studying the possibility of issuing state bonds since for longer. In November 2012, Citibank has offered to underwrite a sovereign bond issue by Cambodia as it had long-term plans to establish a branch in the country. However, Cambodia’s central bank director general Nguon Sokha has not given any details of the size or timing of a possible bond issue.

Cambodia’s economic growth is forecast at 7.2 per cent in 2013, picking up to 7.5 per cent next year as recovery in Europe and the US takes hold, according to the ADB’s annual economic outlook.

The US and Europe are the largest purchasers of Cambodia-made garment and footwear products. “European demand for Cambodian garments and footwear is expected to maintain good growth, supported by duty-free access to the Europe,” the report said. “Shipments to the US will likely be subdued in 2013, but should pick up after that.”

Cambodia’s economy is mainly supported by four main sectors– garments, tourism, real estate and construction, and tourism.

The report noted that net foreign direct investment (FDI inflows into Cambodia surged by an estimated 75 per cent in 2012 to $1.5 billion, funding new industries including automotive parts, electronics, and processing of agricultural products, as well as diversifying garment production into higher- value products and tourism into new areas.

It said that about 23 per cent of the total FDI inflows into Cambodia last year came from China, and the rest came from other countries in ASEAN, Asia and Europe.

The industry sector as a whole is expected to expand by 10.5 per cent in 2013, while the service sector is expected to grow by about 7 per cent, with strong growth in tourism and real estate activity.

Agriculture is likely to grow by 4 per cent. The inflation rate is expected to average 3 per cent this year, assuming stable domestic food prices, and rising to 3.5 per cent in 2014 due to robust domestic demand.

 

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Reading Time: 2 minutes

Cambodia has reiterated that it is mulling the issuance of sovereign bonds, it emerged at the Asian Development Bank (ADB)’s annual summit in India on May 1.

Reading Time: 2 minutes

Cambodia1Cambodia has reiterated that it is mulling the issuance of sovereign bonds, it emerged at the Asian Development Bank (ADB)’s annual summit in India on May 1.

Standard & Poor’s credit rating for Cambodia currently stands at B, while Moody’s rating for Cambodia sovereign debt is B2, which means non-investment grade/highly speculative.

Cambodia has been studying the possibility of issuing state bonds since for longer. In November 2012, Citibank has offered to underwrite a sovereign bond issue by Cambodia as it had long-term plans to establish a branch in the country. However, Cambodia’s central bank director general Nguon Sokha has not given any details of the size or timing of a possible bond issue.

Cambodia’s economic growth is forecast at 7.2 per cent in 2013, picking up to 7.5 per cent next year as recovery in Europe and the US takes hold, according to the ADB’s annual economic outlook.

The US and Europe are the largest purchasers of Cambodia-made garment and footwear products. “European demand for Cambodian garments and footwear is expected to maintain good growth, supported by duty-free access to the Europe,” the report said. “Shipments to the US will likely be subdued in 2013, but should pick up after that.”

Cambodia’s economy is mainly supported by four main sectors– garments, tourism, real estate and construction, and tourism.

The report noted that net foreign direct investment (FDI inflows into Cambodia surged by an estimated 75 per cent in 2012 to $1.5 billion, funding new industries including automotive parts, electronics, and processing of agricultural products, as well as diversifying garment production into higher- value products and tourism into new areas.

It said that about 23 per cent of the total FDI inflows into Cambodia last year came from China, and the rest came from other countries in ASEAN, Asia and Europe.

The industry sector as a whole is expected to expand by 10.5 per cent in 2013, while the service sector is expected to grow by about 7 per cent, with strong growth in tourism and real estate activity.

Agriculture is likely to grow by 4 per cent. The inflation rate is expected to average 3 per cent this year, assuming stable domestic food prices, and rising to 3.5 per cent in 2014 due to robust domestic demand.

 

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