Welcome to the
may we extend a warm welcome and indeed our thanks to those investors
who have joined us over the course of the last month. Monthly
closures will continue until the $100m funding target is reached when
the fund will close (with a final close no later than 2nd April
2009). The next close will take place on the 30th June 2008.
Please contact our Chief Operating Officer Thomas Hugger for offering
documents, subscription forms and general enquiries: [email protected].
2008: Phnom Penh
Veterans of investing in Asia will be familiar with the
tried and tested Investors' Forum concept pioneered by CLSA in Hong
Kong back in the early '90s and we Leopard Cambodia partners who took
part in many of these know their value. These forums provide investors
with an efficient means of meeting both companies and policy makers
over a short period of time, not to mention of course, many other
fellow investors. CLSA and Leopard Cambodia jointly hosted a
mini forum in Siem Reap on May 17th and 18th which gave both current
and would be investors a first hand look at the country's booming
tourist industry, currently growing at 20% per year and centred for
now, before Cambodia's magnificent beaches see some hotels, upon
Angkor Wat, reckoned by many to be the 8th Wonder of the
The first annual Leopard Cambodia Investment Forum will take place at
the Raffles Hotel Le Royal in Phnom Penh on the 18th and 19th
September. With speakers from the worlds of Banking, Property
Development, Agriculture, Law, and Government, investors will be able
to hear at first hand of the many opportunities emerging in Cambodia
and meet the investment team, advisors, and business partners of
Leopard Cambodia Fund. A poolside reception on the evening of
the 18th and dinner on the evening of the 19th will provide investors
with a chance to mingle and talk with many of those who live and work
in Cambodia. An optional follow-on trip to Siem Reap will be
organised for the weekend of the 20th and 21st so investors may experience
the spectacular Angkor Wat. For now we ask you to make a note
in your diaries: detailed programmes and registration forms will
follow by email.
Cambodia in the News
Articles containing information and comment on both
Cambodia and on the Leopard Cambodia Fund have appeared in the
Financial Times, the Wall Street Journal, the International Herald
Tribune, Bloomberg and in various other media over the course of the
A link to our website containing these articles in full can be found
In the News...
The IMF has cut its Cambodia GDP growth forecast to 7%
for FY 2008 due to a slowdown in growth of garments exports to the
USA, although the Fund continues to describe the country's growth
this year as 'robust'.
In a bid to slow very rapid loan growth, the Central
Bank has doubled foreign currency reserve requirements from 8% to 16%
effective from July this year.
Malaysia's TM International has announced plans to
invest $150m over the next two years upgrading its mobile network in
The Government has approved the award of two HydroPower
projects to Chinese Companies China National Heavy Machinery and
Michelle Corporation. Between them they will build capacity of 584MW
in the south west province of Koh Kong.
Based on YTD numbers, the Ministry of Tourism estimates
full year tourist arrivals will reach 2.3m, up from 2m in 2007.
The National Election Committee has announced that only 11 Political
Parties will contest the July elections this year down from 20
competing parties in the 2003 elections, as the rationalisation and
merger of minor parties continues.
Additions to the
Our newest Associate, Polleak-Guillaume Ok Serei, 27, has over three
years of experience working in Cambodia in the development sector
within the UN system, mainly with a project of the International
Labour Organization. He was also a lecturer in International
Relations at the Pannasastra University of Cambodia.
holds a law degree from the Université de Paris X and an MA in
International Economics and International Relations from SAIS Johns
Assistant Sreymom Hum, 28, has worked in Cambodia's hospitality
industry, and most recently in public relations and administration.
She is presently completing a Bachelor's degree in Finance Accounting
from Phnom Penh's Vanda Institute of Accounting.
will see the addition of a password accessed Members Area in our
website. There, you'll be able to read the current newsletter and
past issues, view our performance and prices, and download documents
of interest. You also be able to read the many press articles being
written about us, and click on links to the Internet media coverage
which is fast raising international awareness of Cambodia's first
Private Equity Fund.
reminder that we have moved to new offices and that we have a new
81B, Street 57
PO Box 1141
Phnom Penh, Cambodia
Tel: +855 (0) 23 221634
Cambodia is not Vietnam..."
investors have asked us whether they should be worried about
Cambodia's outlook, given Vietnam's recent decline in asset prices
and growing fears of weakening currency. The simple answer is
"No." Here's why.
Cambodia is at a far earlier stage in its economic renaissance.
If one believes that Vietnam's current woes result from too much
investment, too quickly, then one may be tempted to examine
Cambodia's ongoing economic renaissance in a cautious light. However,
Cambodia is at a far earlier stage of the investment cycle than
Vietnam, with still a low debt to GDP ratio (20%). Cambodia's recent
land boom has been driven by cash rather than leverage as in Vietnam,
and land prices in Cambodia remain a fraction of Vietnam's prices
even after Vietnam has corrected. Cambodia's banking system is
structurally sounder than Vietnam's as in Cambodia there are no
state-owned banks, no bubble-bursted stock or bond markets, and
hardly any interbank market to transmit individual banks' risks. On
any available yardstick of economic development, Cambodia is still at
a very low base, few investors or observers in Cambodia see
over-investment or excess capacity as a concern. On the contrary,
Cambodia needs more of almost everything!
II. The Cambodian system is a free market with few subsidies.
The free-market nature of Cambodia's economy provides better pricing
signals; for example, Cambodia does not heavily subsidize fuel as
does China, Malaysia and Indonesia. Residents pay fair market prices
for most expenses as public transportation and public services are
either meager or non-existant. The authorities do not intervene to
control commodity prices as does Thailand and Vietnam. Thus, Cambodia
faces no budgetary crisis or looming inflationary shock from
eventually being forced to float fuel or commodity prices. With the
majority of Cambodia's population engaging in unmechanized farming
using minimal oil or fertilizer, Cambodia produces food surpluses and
enjoys some net benefits from the recent rise in global food prices.
III. Despite rising inflation, the currency is under no apparent risk
of weakening. Cambodia's balance of payments is sound, buttressed by
long term inflows of capital, foreign aid and FDI.
Inflation is indeed a problem for Cambodians, especially for urban
dwellers whose manufactured goods and major food items are mostly
imported. Rising fuel prices and costly food and raw material prices
are quickly passed onto consumers and businesses alike. However, the
case for a weakening of the Cambodian Riel, which is used maninly by
people at the very bottom of the economic "pyramid," is
more difficult to see than in its neighbour, for two reasons.
Firstly, the Cambodian balance of payments has been improving
alongside a robust stream of long term inflows. The trade deficit
worsened to 18% of GDP in 2007 (compared to an average deficit of 14%
over the previous five years). However, foreign currency reserves
strengthened to four months of imports at year end 2007 driven by
strong performance by the services account and the capital account.
Our observations from being on the ground and frequent interaction
with both the private sector and government (both Cambodian and
foreign) foresee that the steady stream of inflows will
continue. We have seen no warning signs that the taps are going to be
turned down for tourism, FDI, foreign aid or personal remittances
Secondly, the Cambodian economy is also largely dollarized, so there
is little threat of a sudden, painful devaluation as many suspect is
possible in Vietnam.
IV. The Cambodian authorities are vigilant and have the will to
The Cambodian authorities have the strength and moral conviction to
act vigilantly and decisively. This is partly because both the
economy and the government is small and manageable (few state
enterprises exist and the network of bureaucrats is limited). As
inflation began to worsen and hectic loan growth showed no signs of
abating, the National Bank of Cambodia aggressively hiked the reserve
requirement of commercial banks from 8% to 16%. The move was a clear
signal to commercial banks to cool their rapid loan growth, which
rose over 80% YoY in 2007. The bulk of this lending is to
non-speculative sources and the move will merely defer loan demand
until a later date. Total private sector lending is a mere US$140 per
capita in Cambodia, so lending is still on a very low base and the
prospects for loan growth are very strong over the long term.
The NAV of Leopard Cambodia Investments (BVI) Ltd. was
as of 31st May 2008 USD 1'001.41 (30th April 2008:USD
Leopard Cambodia Investments (BVI)