to the 4th Issue of the Leopard Cambodia Fund (LCF) Monthly
Newsletter. As ever we wish to begin this newsletter by extending
both a warm welcome and our thanks to those investors who have joined
us over the course of the last month. Monthly closures continue with
the next close taking place on the 29th August 2008. Please contact
our Chief Operating Officer Thomas Hugger for offering documents,
subscription forms and general enquiries at: [email protected].
Welcomes VGZ Zurich
We are very pleased to welcome as an investor Markus Winkler of VGZ
Zurich. Mr. Winkler has kindly agreed to serve as a non executive
Director of our Feeder Fund, Leopard Cambodia Investments (BVI) Ltd.
and will initially represent the Feeder on Leopard Cambodia Fund's LP
Advisory Committee. A Swiss national, Mr Winkler was educated at the
University of Zurich and the Business School of St. Gall, from which
he graduated. He is President of the Board of VGZ
Vermoegensverwaltungs-Gesellschaft Zurich, an independent asset
management company he founded in 1973. Prior to that he was trained
at Bank Leu and UBS. He is a founder-member and former Vice President
of the Swiss Association of Asset Managers as well as a founder and
Board member of the Swiss Investors' Association. He also serves on
the Advisory or Supervisory Boards of a number of Dublin, Frankfurt
and London listed funds investing in Asian and Eastern European
emerging markets. Mr. Winkler is widely experienced in the investment
world, and in addition to his professional commitments, is a regular
lecturer and writer on investment matters. Mr. Winkler will be a
valuable resource for our team and we are delighted to welcome him on
Manager's Investment Team is in the advanced stages of evaluating
two possibilities in the areas of agricultural production and
processing, to capitalize on Cambodia's underlying potential as a
world-class food producer. The team is also considering opportunities
in financial services, fast food, hotels, alternative energy, and
various other sectors; there is no shortage of investment
opportunities in Cambodia, and as the first multi-sector Fund, we
hear about many of them.
Cambodia Investment Forum 18-19 September 2008: Phnom Penh
are now just 5 weeks away from the first annual Leopard Cambodia
Investment Forum and the extremely encouraging rate of attendee
registration provides yet further evidence of burgeoning interest
in Cambodia. The forum will prove the ideal means of meeting our
team and learning more about the many opportunities which the
country offers. It takes place at the Raffles Hotel Le Royal in
Phnom Penh on the 18th and 19th September. Invited speakers so far
Dr Hang Chuon Naron, Secretary General of the Ministry of
Economics and Finance.
Thach, head of the Cambodia Stock Exchange project, from the
Ministry of Economics and Finance.
Sri Dr Chen Lip Keong, President/CEO of NagaCorp Ltd.
Sciaroni, Cambodia's leading expatriate attorney.
Sophal, Senior Researcher of Agricultural Economics at the
Cambodia Development and Research Institute.
Bonna, Managing Director of Bonna Real Estate.
Low, National Executive for Southeast Asia Growth Markets,
Bridges, former British Ambassador to Cambodia.
Hay, Chairman of ACLEDA Bank Investment Committee.
Seng, Financial Director of Seng Enterprises.
have blocked a number of rooms at the Raffles at a special
conference rate of $110, but these are limited so please register
soon. Please also take the opportunity to join our optional
follow-on trip to Siem Reap where you can experience Angkor Wat
and visit our condo project site.
on Elections July 27th
went to the polls on July 27th and registered a resounding vote of
confidence in Hun Sen's Cambodian People's Party (CPP). Results
released by the National Election Committee show that the CPP won
90 seats in the National Assembly with 58% of the popular vote, up
from 73 seats in the 2003 elections. And whilst noting some cases
of alleged intimidation, the consensus amongst foreign media and
NGO observers is that the elections were generally free and fair.
The Sam Rainsy Party headed by the former Minister of Finance
gained 2 seats for a total of 26 with 22% of the vote providing
parliament with a credible, if small, official opposition. However,
the fortunes of Prince Ranariddh's former party and first post war
Government FUNCINPEC waned yet further, losing 24 of its 26 seats.
As a result of a 2007 change to the constitution which allows a
party to form a Government with 50% of available seats, plus one
seat more, the CPP can now govern without the need of a coalition
partner. We expect Hun Sen's business friendly reform agenda, which
includes the active encouragement of foreign investment, to gather
The Prasat Preah
Vihear Temple Dispute
recent inter-Governmental spat over the provenance and legal
ownership of a temple located on the border between Thailand and
Cambodia, and the consequent deployments and counter deployments of
troops, has reawakened memories most thought best forgotten, of the
anti Thai riots of 2003 when the Thai Embassy in Phnom Penh was
burned and the offices of many Thai businesses were ransacked.
What bought these earlier riots about? A minor Thai actress was
reported to have said she believed Angkor Wat to be Thai. Khmers hold
Angkor Wat close to their national hearts and view the complex as the
very symbol of their cultural identity, so the views attributed to
the actress were seen by the Khmers as hugely provocative words from
a daughter of a large and bullying neighbour. Relations between the
two countries have always been if not delicate, certainly delicately
managed. The roots of the current dispute go back to the 1950s when
Cambodia was a French protectorate and French maps showed the temple
as being on the Cambodian side of the border. Thai maps showed the
opposite. When the French left Cambodia in 1953, the Thais, no longer
facing a large western power, occupied the cliff on which the temple
stands. Cambodia subsequently severed diplomatic relations with Thailand
and lodged a complaint with the World Court in The Hague and in 1962
the court ruled that Prasat Preah Vihear belonged to Cambodia. The
Thai King ordered that the Court's decision be accepted and there has
been a somewhat sticky but well managed and non violent truce ever
since. Unfortunately, Thai domestic politics then came into play as
parties opposed to the Government of Samak Sundaravej, (which they
argue is effectively a proxy party part run by Thaksin Shinawatra),
used the earlier acceptance by the Thai Foreign Minister of a
slightly revised border map as evidence of the Samak Government
giving pieces of Thailand away. Indeed Preah Vihear was included in a
list of six items which opposition leader Abhisit Vejjajiva put
before the Thai parliament when it met to vote on a no-confidence
motion against the Government on June 26. Thailand's
Administrative Court has subsequently issued an injunction against
the Foreign Ministry's support for the Cambodian proposal to list
Preah Vihear as a World Heritage site. Where do we go now? Probably
not very far in the short term, there being no magic diplomatic
bullets to fire at disputes where national pride is concerned.
However, money talks and so do jobs, and Thailand is the 3rd largest
south east Asian investor in Cambodia, a country crying out for
foreign investment. Thai conglomerates such as Siam Cement might
well think twice about proposed cement and steel investments if risks
are deemed to be too great. Trade between the two countries reached
$1.47bn last year: with a forecast FY growth rate of over 20%. That
bilateral trade will be worth $1.75bn by year end, figures which will
probably serve to concentrate Governmental minds on both sides. With
both countries having much to lose, economic 'realpolitik' may well
dictate that a compromise is reached sooner rather than later.
In the News
joint projects with Qatar and Kuwait, Cambodia plans to invest
$300m over the next few years to dam the Vaico and Stung Sen
rivers with a view to increasing the amount of rice paddy under
irrigation from 44% to 60%. This follows earlier announcements of
preliminary agreements between the respective Governments
through which Kuwait and Qatar seek to secure rice supplies from
Cambodia. Cambodia had a rice surplus of 2m tons in 2007.
first steel plant, the Ti-E Steel Cooperation Company has commenced
production. The factory, which had a 'soft opening' in early
2007 is located on over six hectares in Meanchey district, Phnom
Penh and has a 25,000 ton capacity. Cambodia's demand for steel
is running at around 200,000 tons per year.
firm Global Taxi has begun a metered taxi service in the capital
a year after it signed an agreement with City Hall. The first 12
taxis are now plying the streets of Phnom Penh with 48 more to
be introduced later this year.
Ministry of Commerce has announced that garment exports
increased by 5 percent in the first half of the year and are
expected to grow to 10 percent by year's end. The Garment
Manufacturers Association of Cambodia reported earlier this year
that garment exports totalled US$2.93bn billion last year, 2
percent higher than 2006's US$2.88bn.
the ongoing Preah Vihear border dispute, tourist arrivals to
Cambodia were up by 13 per cent in the first half of 2008,
Ministry of Tourism statistics show. The Ministry said nearly
1.1 million foreigners had visited the country in the first six
months of the year, an increase on 2007, when total annual
tourist arrivals topped 2 million for the first time.
Terms of Leopard Cambodia Fund
approval by the LPs, the GP proposes to shorten the term of the fund
to better reflect the promising current investment conditions.
Currently the Fund is structured with a 5 year investment period
followed by a 5 year divestment period. With an abundance of
attractive investment opportunities coming our way, the GP proposes
to reduce the Fund's 10 year lifespan to 8 years: 4 years investment
followed by 4 years divestment. LPs will receive a separate
document to vote on this.
Fund: A Possible Listing in Frankfurt?
directors are to consider listing Leopard Cambodia Investments
(BVI) Ltd., our Feeder Fund on the "Open Market" of
the Frankfurt Stock Exchange (Germany) on or after the hard close
(31st March 2009) and, before reaching a decision, will seek the
views of investors as to the merits, or otherwise, of such a
welcome on board Matt Magenheim who has joined our Phnom Penh office
as Business Development Manager. Matt joins Leopard from the
William J. Clinton Foundation where he had served as Cambodia Country
Coordinator of the Clinton HIV/AIDS Initiative, a position which took
him to all corners of rural Cambodia. Matt earlier set up a
meat exporting business in Ulaanbaatar, Mongolia for Projects
International, and worked as an investment banking analyst at Morgan
Stanley. He received his A.B. summa cum laude from Bowdoin
College and is a recipient of the Royal Government of Cambodia's
Articles containing information and comment on both
Cambodia and on the Leopard Cambodia Fund appear regularly in
various publications and news outlets. To view the page in our
website displaying links to these click HERE
The NAV of Leopard Cambodia Investments (BVI) Ltd. was
as of 31th July USD: 1'002.40 (30th June: USD 1'001.92)
Leopard Cambodia Investments (BVI)