Hydropower, mining, oil and gas sectors cover 85 per cent of total investment

Investment sectors in hydropower, mining, oil and gas covered 85 per cent of total investment in Myanmar, said Aung Naing Oo, Director General of Directorate of Investment and Companies Administration in a conference held at Myanmar Investment Commission Office in July 25. (ELEVEN MEDIA)

“The main foreign investment in Myanmar is hydropower. The investment in hydropower sector has over 40 per cent of overall investment. Exploring oil and natural gas came second and has over 30 per cent of total investment. The third is the mining sector and has 7 per cent of total investment,” he said.

Myanmar has now over US$42 billion from foreign investment and China is top among foreign investors. China’s investment accounts for 34 per cent of total foreign investment. Although foreign investment in above sectors is up, investment in production and agricultural sectors has a little investment.

“Although foreign investment those three sectors are high, investment in agricultural which is the important sector for 70 per cent of total population and labour intensive industries which can create many job opportunities are low. We are trying to make investment increase in those sectors,” the director general said.

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Cambodian garment export up nearly 20 pct in 1st half

The garment industry, Cambodia’s largest income earner, reported 2.51 billion US dollars in export value in the first six months of this year, a 19.5 percent rise from $2.1 billion over the same period last year, the figures of the Commerce Ministry showed Wednesday.

Cambodian apparels are mostly sold to the United States and European countries, with some to Canada, Japan, South Korea and China.

The figures said that from January to June this year, the garment exports to the United States were valued at $1.02 billion, up 10 percent year-on-year. The exports to the European nations were 862 million dollars worth, up 27 percent, and the exports to other countries were $629 million, up 27 percent. (XINHUA)

“Our garment products are mainly reliant on the US and European markets, so our export growth demonstrates better economic situations in those countries,” Khuon Savuth, an official at the Commerce Ministry’s Import-Export Inspection and Fraud Repression Department, said Wednesday.

According to the figures, garment export accounted for 80 percent of the country’s total exports.

The industry is comprised of about 500 factories with some 510, 600 workers. A worker’s monthly minimum wage is 80 dollars.

In 2012, the impoverished Southeast Asian nation earned 4.6 billion dollars from garment exports.

Large banks focus on corporate bonds

HA NOI (VNS)— The total value of corporate bonds sold during the first six months of this year has reached VND15 trillion (US$707.5 million), equivalent to 88 per cent of last year’s total, according to a report from the Bank for Investment and Development of Viet Nam (BIDV).

Property developer VIDP Group issued VND7.6 trillion ($358.4 million) in corporate bonds, mineral giant Vinacomin raised VND2.5 trillion ($117.9 million) and HCM City Infrastructure Investment (CII) issued VND1 trillion ($47.1 million) worth of bonds.

The BIDV report recorded small scale issuance of under VND100 billion ($4.7 million) from other companies. “Most of the bonds belonged to real estate firms,” the report said.

Corporate bonds were favoured by commercial banks. BIDV and Techcombank bought VND500 billion ($23.8 million) and VND3 trillion ($141.5 million) worth of bonds in VIDP Group, while all the bonds issued by CII, totalling VND1 trillion ($47.6 million), were sold to Vietcombank (VCB).

“Attractive yields have brought banks with large cash reserves to corporate bonds,” the report said. “Despite the gloomy economic situation that made it for bond issuance more difficult, large corporations are still alluring to investors.”

The supply of corporate bonds is expected to continue to rise as companies take advantage of low interest rates to raise capital. “Along with increasing supply, demand will be large, especially for bonds from reputable businesses,” the report said.

Bond yields for three to five-year terms range from 13-15 per cent.

Meanwhile, Government bonds were less attractive, according to Viet Dragon Securities Co. Government bonds during the first six months yielded about 6-9 per cent. Declining yields discouraged investors, especially banks.

In June and the beginning of this month, foreign investors sold Government bonds with a net value of VND7.2 trillion ($339.6 million). — VNS

UK to invest in Myanmar’s oil, gas and travel sectors

The United Kingdom has pledged to invest over US$385 million in Myanmar in two years time, according to statistics of the Directorate of Investment and Company Registration. (ELEVEN MEDIA)

The UK invested over US$2659.954 million in March 2011, and the investment is increased to over US$3045.434 million in June 2013. China is still the biggest investor in Myanmar with more than US$14 billion. The UK is standing in 5th place behind China, Thailand, Hong Kong and South Korea.

The UK is making investment in nine sectors in 2013. On June 12 the Myanmar Investment Commission (MIC) gave permission to UK-based Leisure Holdings Asia Ltd. to organise river cruises between Yangon, Mandalay, Began, Banmaw, Mawlite and Homemalin. On May 10 the MIC is also allowed the joint venture of UK based HC (Asia) Holding Co. Ltd. and a Myanmar company to establish a production plant of plastic bottles in Mingalardon Industrial Zone.

During his trip to the UK, Myanmar President Thein Sein invited UK companies to invest more. Myanmar has plenty of natural resources and needs foreign investment to develop into an industrialised country like UK.

Deposits and loans increase

Deposit and loans at major commercial banks have continued to climb over the first half of this year, industry officials say. Grant Knuckey, chief executive officer of ANZ Royal Bank, said yesterday that ANZ continues to see strong growth in trade finance led by the agricultural sector. He added that from January until the end of June, loans and deposits at ANZ Royal were up 13 per cent compared with the same period a year ago. “The commercial banking sector has had continued strong volume growth in the first half of 2013, but there has certainly been margin compression.” Knuckey said, referring to the fact that while the volume is up, profit margins have been smaller due to competition and the need to lower rates. Knuckey said he expects “a pick-up in activity towards the last quarter of 2013 based on both seasonality and post-election expenditure and re-stocking.” Acleda, the leading bank in Cambodia, disbursed $1.39 billion in loans at the end of June this year, up 22.6 per cent from the first half of last year. Deposits at the bank grew 20 per cent year-on-year to reach $1.59 billion at the end of June. So Phonnary, executive vice president of Acleda Bank, said that loans to micro, small and medium enterprises (MSME) are major contributors to the growth, followed by loans in agricultural activities, which increased 34.6 per cent at the first half of this year compared with the same period in 2011. “Acleda Bank loans and deposits are growing and the market trend is still good for the second semester,” Phonnary said. Union Commercial Bank (UCB), is also seeing increases in the first six months of 2013. According to Yum Sui Sang, general manger of UCB, at the end of June, loans $200 million and deposits stood at $271 million, representing a 44 per cent bump and a 24 per cent bump, respectively, from the first six months of 2012. “We see more and more people are coming to invest in Cambodia. We have not only Cambodian clients but also foreign investors,” Yum said yesterday. The most recent data from the National Bank of Cambodia (NBC) revealed that loans provided by all Cambodian commercial banks reached about $6.14 billion, and deposits made at all commercial banks reached about $6.39 billion at the end of March this year versus the same period in 2012.

Tue, 16 July 2013 – Hor Kimsay

Aeon Mall’s vision explained

Costing more than $200 million, the four-storey Aeon Mall in Phnom Penh, set to open  in July 2014, is being hailed as Cambodia’s biggest shopping complex. Makoto Yajima, managing director of Aeon Mall Cambodia, talked to Mak Lawrence Li about the project.

What makes this project stand out among similar ventures in  in Phnom Penh?

The shape of our mall is in a “Two Anchors with one Mall” format, which consist of two or more large-scale anchor stores connected with a mall area occupied by specialty stores. While other facilities in Cambodia are mainly in tall buildings, ours is long on the site which is quite different. Our mall includes a huge cinema complex and a brand new bowling centre, which is comfortable and exciting for customers to visit.

Why come to Cambodia now?

The economic growth is rapid here in Phnom Penh, and it is also a dynamic market with such a huge younger generation. There is no special reason for the timing. Time is now for us, and from now on we will do our best for Cambodia.

What does Aeon Mall bring to Cambodia?

A new style of shopping is coming here. Citizens, especially for the younger generations, always seek new fashion, services and amusement facilities. What we want them to realise is that shopping can indeed combine with entertainment, all together as a whole in one place. We would also like to offer three things: high quality products, excellent services and adequate parking space. Many malls in the city do not consist of enough parking spaces, but we do and there will be 1,400 for cars and 1,800 for motorbikes.

What are your marketing strategies? Any targeted customers or income groups?

We call it the ‘one-stop solution’. Four aspects: shopping, community, entertainment and ecology. Customers can fulfill all their needs here. And the location we choose is located very near to the city centre so people can get here easily, which is already another strategy. We are very confident we will be competitive because of our services provided. Every citizen in Phnom Penh will be our target; we offer high quality products and services with affordable prices.

What do you want to accomplish in the long term?

Our primary aim is to introduce our brand to citizens, letting them know about the unique styles of Aeon. The second thing is training up local staff with Aeon Mall standards, which is ‘serving with hospitality’. We have looked at some of the shopping situations here and staff used to eat or sleep inside the stores, they don’t pay much care to the customers. We want all our customers to enjoy proper services and staff will also be confident in serving clients.

How about volume and spending? Any estimates or predictions?

Regarding sales or revenue, it is hard for us to disclose at the moment but we hope for up to 10 million visitors at the mall in the first year.

What are your future plans in Cambodia?

We will consider opening two or three malls in Phnom Penh, if the first one is successful enough. We want to stick as the closest retailing company in every place for serving our customers, and the Aeon Mall Cambodia Company would want to
become a local enterprise eventually.

How would you foresee malls developing in Cambodia?

There will be more and more competitors and I think it is good news for us. Keen competition means fast growth and the customers will have more choices too.

By Mak Lawrence Li│14 June 2013│The Phnom Penh Post