CamGSM deal said to be close

TELEKOMUNIKASI Indonesia’s majority-stake purchase of Cambodian mobile operator CamGSM is nearing the end of negotiations that have lasted almost a year.

“We’re in the final approval stages right now,”  Mark Hanna, chief financial officer at Royal Group, which owns CamGSM, said yesterday.

Hanna would not give a time frame for the closing of the deal, but said negotiations were certainly moving forward.

However, Indonesia’s Ministry of State Owned Enterprises has not granted approval on the Telkom purchase, according to reports yesterday. Telkom, which is majority-owned by the Indonesian government, could not be immediately reached for comment.

Angkor Wat continues to drive tourist numbers

Tourist arrivals to Siem Reap and Angkor Wat increased by almost 25 percent in the first eight months of the year compared with 2010, according to statistics obtained from the Siem Reap Tourism Department.

An increasing number of Asian tourists, especially from neighbouring Vietnam, had benefitted the Kingdom’s tourism industry, said Chhoeuy Chhorn, the department’s administrative director.

“The increasing number of direct flights from regional countries is encouraging more tourists to visit Angkor Wat,” he said.

Premier predicts high growth

Cambodia's economic growth could surpass previous estimates and hit 8.7% this year, Prime Minister Hun Sen said in a speech yesterday.

Earlier government forecasts estimated growth of 6% for 2011, though increasing garment exports and a strong recovery in the tourism sector have stimulated the economy above expectations, according to the prime minister.

“We originally projected the economic growth at 6% for the year. However, two months ago, the National Institute of Statistics predicted growth of 8.7%,” he said at a ceremony for National University of Management students at the Diamond Island Convention and Exhibition Center.

Real estate developers warned

Unlicensed real estate developers may find their projects blacklisted if they fail to register with the Ministry of Economy and Finance, a ministry official said yesterday.

The MEF published the names of three developers in a local paper last week and has promised to warn consumers of other unlicensed projects, Mey Vann, director of the Department of Industry and Finance at the MEF, said. Real estate scams have plagued the Cambodian market since 2007, he added.

Consumers put down payments on unfinished residential and commercial projects only to find developers absconding with their cash, Mey Vann said.

Satellite city speculation

Construction will soon begin on yet another satellite city in Phnom Penh, this time worth US$1.6 billion. Most people must be scratching their heads, as there are already four similar projects totalling $4.4 billion either planned or presently under construction in the capital.

The general sense of economic optimism that drove investment before the global financial crisis seems to have returned. Perhaps that feel-good factor is what drove the prime minister this week to predict as much as 8.7-percent growth in domestic GDP for the year, a significant jump over the Asian Development Bank’s most recent projection of 6.8 percent.

Struggling Sihanoukville

News this week that two domestic airlines plan to offer flights between Siem Reap and Sihanoukville town was positive for the Kingdom’s tourism industry, though Cambodia’s coast is still far from being a top destination.

Cambodia Angkor Air and Tonle Sap Airlines have said they will begin trafficking passengers between the two destinations by the end of the year, with the former saying delays into 2012 are possible.
Regardless, the launch of these new routes begged a question.

As tourists to Siem Reap most often enter Cambodia from Thailand, why would these visitors choose Sihanoukville over any of that country’s world-class beaches and resorts?

Prices rise, but economists upbeat

Cambodia's consumer price index rose 5 percent year-on-year through June, official data from National Institute of Statistics showed. However, experts remained positive despite rising costs, saying the increase was due to the Kingdom’s improving economy and surging global fuel prices. “We are not concerned. It is manageable as what we expected,’ said Chan Sophal, president of the Cambodian Economic Association. “Whenever the country’s economy is growing, it will push the price of goods up. That is why we see product price at advanced economic countries are high,” he added. The official data showed price gains in food and non-alcoholic beverages; alcoholic beverages, clothing and footwear, housing, electricity, gas and other fuels, among other sectors.

Major bank downgrade

Moody's Investors Service announced yesterday  it had downgraded the credit rating of ACLEDA Bank, citing the departure of two of  the bank’s major investors in as many years.

The loss of a second big sharehol-der in the first half of this year had led to Moody’s cutting the bank’s local-currency long-term deposit and debt issuer ratings from Ba1 to Ba2, Christine Kuo, a Moody’s vice-president and senior credit officer, said in a statement yesterday.

Moody’s defines banks with Ba-grade ratings as being speculative and “subject to high credit risk”.

“The one-notch rating uplift from shareholder support, previously incorporated in ACLEDA Bank’s ratings, is no longer appropriate given that two of its major shareholders have now divested their stakes of 12.25 per cent each,” Kuo said in the statement.

Tourism stronger than predicted

THE Kingdom’s tourism industry this year will perform much better than the government expects thanks in part to Cambodia’s growing popularity as a vacation destination, investment firm Cambodia Capital has said.

Total tourist arrivals to Cambodia for 2011 will reach 2.85 million, while total revenues from tourism will reach US$1.98 billion, according to the firm’s latest research report.

Those numbers represent increases of 17 per cent and four per cent over the Ministry of Tourism’s estimated 2.8 million total tourist arrivals and $1.91 billion in total revenues for this year, respectively.

Cambodia Capital, describing its projections as conservative, said the tourist arrival growth of 13.5 per cent between January and July would hold for the rest of the year.