Brakes put on auto imports
Insurance, real estate operators look to list
WITH the Covid19 pandemic cutting into the global vehicle and parts manufacturing industry and transforming Cambodians’ spending habits, imports have seen a sharp decline this year.
Cambodia imported $600.903 million worth of vehicles and parts in the first five months of the year, plunging 17.39 per cent on a yearly basis from $727.358 million, data from the General Department of Customs and Excise show.
Broken down by category, the Kingdom imported $96.654 million worth of motorbikes (down 15.43 per cent year-on-year) and $251.385 million worth of cars (down 21.46 per cent).
It imported $17.448 million worth of vehicles for 10 or more passengers ( down 59.98 per cent), $171.065 million worth of freight vehicles (down 8.25 per cent) and $31.815 million worth of parts (down 12.74 per cent).
Imports of other vehicles were worth $32.536 million (up 22.86 per cent).
Ministry of Commerce spokesman Pen Sovicheat told The Post on Tuesday that the outbreak of Covid-19 had sapped the momentum of international trade in almost every country, notably that of non-agricultural products.
He said: “These slumps have become an overarching trend during these times.”
But as the world achieves and maintains better control over the Covid-19 situation, he said, signs of gradual recovery in import volumes have emerged.
“As Covid-19 eases, imports are likely to take a big jump by the end of the year,” said Sovicheat.
Cambodia Chamber of Commerce vice-president Lim Heng said the domestic market for vehicles had contracted significantly during the Covid-19 era, and imports were expected to shrink accordingly.
“The Covid-19 disease has slashed demand for cars and motorbikes to almost zero,” he said, adding that lost incomes during the pandemic has forced people to think twice before investing in a new vehicle.
But once revenues return to pre-crisis levels, demand will rebound, he said.
Royal Academy of Cambodia economics researcher Hong Vanak said the Covid19 crisis had roiled domestic demand and supply from producing countries.
“There are many reasons why the value of these imports fell, including Cambodians focusing a greater portion of their budget on food and trimming unnecessary spending, the strain on the logistics and transport sector, and factories abroad being hit by disruptions and uncertainties,” said Vanak.
He expressed his optimism that imports of vehicles and parts will see steady growth after the Covid-19 situation improves. “Things will likely return to growth once the borders open, but I do not anticipate a strong rebound.”
The Kingdom’s total import and export volume was valued at $36.7 billion last year, data from the National Bank of Cambodia show.
Exports amounted to $14.53 billion and imports $22.19 billion, a year-on-year increase of 12.7 per cent and 18.6 per cent, respectively.
INSURANCE and real estate operators have expressed their interest in listing on the Cambodia Securities Exchange (CSX), Securities and Exchange Commission of Cambodia (SECC) directorgeneral Sou Socheat said on Tuesday.
He told The Post that some of the companies in the two key sectors are in their initial planning and preparation stages to list corporate bonds and stocks on the CSX.
“We are working with the insurance and real estate companies. Given how early in their preparation stages they are, we are unable to say at this time whether they will be ready by the end of the year or next year,” said Socheat, without naming the companies.
CSX vice-chairman Ha Jongweon also confirmed that there are several companies in the listing pipeline. They are working with their initial public offering teams comprising an underwriter, an accounting firm and a legal firm.
“Some of them will submit documents to the CSX for review soon. Some plan to list by this year and others to list early next year,” he said, without disclosing further details
The CSX welcomed its first domestically listed company, the state-owned utility Phnom Penh Water Supply Authority (PWSA), on April 18, 2012.
As of the end of the first half of the year, the market has 12 listed firms – six bond-listed companies and six stock-listed companies.
The listed firms have raised $223 million in trading. Market capitalisation increased 58 per cent from $442 million in 2018 to around $701 million last year. Trading volume increased nearly six-fold from $26,000 in 2018 to around $150,000 last year.
As of last year, t here were five centra l counterparties in t he derivatives market, 27 derivatives brokers, five f und management companies and five trustees licensed by the SECC.