National bank to lend US100 million in loan to banks

After break-out of the global financial crisis, the national bank of Cambodia (NBC) has set up an approximately US$ 100 million loan for commercial banks to make sure that they will have cash on hand if needed. The central bank is ready to be careful with this issue, keeping a close eye on the banking sector.

Hang Chuon Naron, Finance Ministry Secretary General, was quoted by the Cambodia as saying on the sidelines of a signing ceremony for the country’s forthcoming stock exchange that the loan will help banks that might face short-term short-ages in liquidity, particularly due to high levels of withdrawals.

The NBC senior official said at the banking Cambodia conference that despite the world economic recession, the Cambodian banking sector still remained in a healthy state. The local banking sector has had no direct exposure to the global subprime mortgage crisis. Continue Reading >>

Loan available for American businessmen in Cambodia

Despite the global financial crisis, US president Barak Obama issued a new release on June 13, 2009 from Washington D.C to decide to make business loan available for American investors who are making investment in Cambodia. It is expected that this decision is to encourage more private companies from America to ask for commercial loans to do business in Cambodia.

Khieu Kanharith, Minister of Information and Government’s spokesman, said that he welcomes this decision and regards it as a way to encourage more commercial businessmen from United States of America to invest in Cambodia since America is a major partner of Cambodia, reported Khmer-language newspaper, Rasmei Kampuchea.

Chheang Von, lawmakers and chairperson of the Commission of Foreign Affairs of the National Assembly, said that America’s decision is a big encouragement for Cambodia and facilitation for trade and investment related to international cooperation between Cambodia and other countries, especially United States of America, which is the powerful country of the world, continued newspapers.

Khieu Kanharith added that though the funding aid from America to Cambodia is a small amount, but it has assisted Cambodia a lot in different international institutions. In addition, Obama’s decision is another step in order to push for more American businessmen in Cambodia, reported paper. Continue Reading >>

Contracts for Petroleum Development - Part 1

In virtually every country around the world, petroleum resources in the ground are considered the property of the state. Whether and how the country’s petroleum resources are developed, and how much revenue will flow to the government, depend on the nature of contracts signed between the government and the investor. This briefing note, the first in the series of three, describes basic features of petroleum contracts for exploration and production. The series focuses primarily on production sharing agreements, the type of contracts used in Cambodia, with a focus on fiscal terms.

In all countries except the United States, the government owns petroleum resources under the surface (ground or sea). These resources can be extracted and converted into financial assets only once and are eventually depleted. An important objective is to maximize the revenue to the government that can be effectively utilized in the long run. Achieving this objective depends on many factors, including the government’s ability to attract qualified investors, the timing of production, petroleum price movements, and the government’s capacity to spend revenue productively.

Governments have considerable influence over when and how fast to extract petroleum resources. The timing and pace of resource development in turn depends, amongst others, on the legal, fiscal, and contractual framework for the petroleum sector. Petroleum exploration and production carries high risks and is capital-intensive. That said, it can be extremely profitable if a sizable commercial discovery is made. The fiscal and contractual framework determines how risks and profits are shared between the government and the investor. Continue Reading >>

Acleda bank rating upheld by Global credit risk agency

On Friday, 19 June, 2009, Moody, US-based global credit risk agency, confirmed in its statement that it has kept up the bank’s previous ratings mainly due to the role of Acleda’s shareholders, have has long-term focus and have demonstrated their support to the bank by providing equity and debt financing since its inception.

According to the Moody’s statement, Moody’s investor services confirmed Acleda bank local currency deposit and issuer ratings of Ba1 with a stable outlook. The agency also held other ratings for the bank steady, giving Acleda a score of ‘D’ for financial strength rating, a foreign long-term deposit rating of ‘B3’ and a foreign currency long-term issuer rating of ‘B1”.

Im Channy, CEO and president of Acleda bank, said in news release that “we are naturally very pleased with this outcome as it shows that our bank withstood the rigorous scrutiny which we have been put under and have maintained our ratings at a time when so many other banks in the world have been downgraded.”

Christine Kuo, a Moody’s vice president and senior analyst said in the statement that “In light of Cambodia’s current situation and prospects, Moondy’s has concluded that the systemic support input for Cambodian bank rating should be changed from Ba1 to B1.” Continue Reading >>

Commercial bank handled State revenue transaction

In a bid of the Cambodia government to enhance national financial accountability and strengthen effective management in public institutions, Ministry of Finance on Monday signed a memorandum of understanding with commercial bank, Acleda, to handle government’s budgetary and revenue transaction, including the payment of government salaries in Kandal and Banteay Meanchey provinces.

“Using the commercial banking system to manage its national revenue and expenditure transactions is designed to enhance financial accountability and increase effective management in public finance,” said Aun Porn Moniroth, Finance Ministry Secretary of State, quoted by the Cambodia Daily as saying.

Providing commercial banking services for two provinces will be implemented from July 1. The government chose Acleda to be partner to handle revenue transaction because the bank has its networks throughout the country. If successful, this pilot program will be expanded to five provinces.

Revenue and expenditure transactions are currently executed through the National Bank of Cambodia (NBC). Continue Reading >>