Money moves

For first-time in­vestors, talk of bulls and bears, booms and busts, can sound like so much gib­ber­ish. Grant Thorn­ton Cam­bo­dia CEO and part­ner Ron­ald Almera breaks down some of the ba­sic do’s and don’ts of putting your money to work

Southeast Asia Globe - - Advertorial - IN­TER­VIEW BY PAUL MIL­LAR

What ad­vice would you give to first-time in­vestors?

Usu­ally what I would sug­gest would be to put it in a bank. Now you have two choices, an MFI [mi­cro­fi­nance in­sti­tu­tion] such as Prasac or com­mer­cial banks. The gen­eral knowl­edge here is that all of the banks, re­gard­less of the form, are do­ing rel­a­tively good in Cam­bo­dia. So Prasac can be your best bet in terms of build­ing your money [with an in­ter­est rate of ] 8% per an­num.

Un­for­tu­nately, you can­not take a large amount of money from Cam­bo­dia and in­vest it in an­other coun­try. There’s a lim­i­ta­tion as to those other in­vest­ments they can go into. On a per­sonal ba­sis, if you are re­ally a risk-taker – and some years I am – you do on­line trad­ing. There’s E-Trade, an elec­tronic trad­ing plat­form, and ba­si­cally you can buy any stocks around the world. So I signed up for E-Trade, and dur­ing times that I feel I want to take a lot of risk, I buy US stocks through on­line trad­ing. I have a US bank ac­count, so it’s easy for me to do that.

Now if you have longer pa­tience, some of my for­eigner friends are in­vest­ing in real es­tate. They buy a con­do­minium or other real es­tate through a nom­i­nee, and then wait for ap­pre­ci­a­tion. Right now the hot item is the land near Si­hanoukville, where all the Chi­nese in­vest­ment is com­ing in. That’s hot prop­erty now.

What are the ad­van­tages of in­vest­ing in real es­tate?

The re­turns are higher be­cause in a mat­ter of days, you can re­cover your costs. Why? Be­cause there is an ac­tive buyer and an ac­tive seller, and that is what makes a good mar­ket. Of course there is a risk there, be­cause if no one wants to buy your prop­erty, then you’re stuck with the land, whereas in a tra­di­tional fi­nan­cial in­vest­ment, what­ever you do ev­ery year, you get a fixed amount of in­ter­est. So it de­pends on the risk ap­petite of the per­son.

A lot of [com­mon mis­takes] in­volve real es­tate. They don’t know the process, so what they do is they trust some­body whole­heart­edly in real es­tate, and then they give them the money. And then this per­son sud­denly dis­ap­pears. Be­cause they have to have a nom­i­nee – they don’t know the lan­guage, they don’t know the process. That’s why some peo­ple fall into the trap – some­one be­friends you, and you can trust them for six months. And then if you give them the money, sud­denly they don’t ap­pear any­more. So that’s the big­gest mis­take, not know­ing what the process is.

Buy­ing the land per se is not an is­sue, be­cause as I’ve said – de­pend­ing on the lo­ca­tion – it will ap­pre­ci­ate in value, so there’s no prob­lem with the value of the land. It’s the per­son that you’ve dealt with that is usu­ally the prob­lem. That’s why a lot of foreigners now are tak­ing the safer way: they put up a com­pany just for hold­ing the land ti­tles.

Are there any other com­mon in­vest­ment routes here?

I think what you’re dis­cussing is phys­i­cal wealth, phys­i­cal money. There is an­other wealth that can be had here in Cam­bo­dia, but it doesn’t con­cern money. It’s the in­tel­lec­tual wealth. I see that a lot of young Cam­bo­di­ans re­ally are in­ter­ested in learn­ing a lot of things. So if you’re a young Cam­bo­dian, ob­vi­ously you don’t have a lot of money, you in­vest into the lan­guage, the English lan­guage, some peo­ple learn Chi­nese, they take on ac­count­ing sub­jects. That’s what I’m see­ing in the younger pop­u­la­tion: they in­vest in their knowl­edge.

Grant Thorn­ton Cam­bo­dia CEO Ron­ald Almera on in­vest­ment ba­sics

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