Logo of Phnom Penh Post newspaper Phnom Penh Post - Businesses cite asset bubble as top concern

Businesses cite asset bubble as top concern

Businesses cite asset bubble as top concern

Executives surveyed by the World Economic Forum cited a potential asset bubble as the biggest economic concern of businesses in the Kingdom, followed by risks from energy price shocks and unemployment.

The survey, released yesterday as part of the group’s annual Global Risks Report 2016, had respondents list out the top five global risks they deemed could affect their local business operations.

They ranked an asset bubble as their primary concern, far higher than the global average, where respondents ranked it seventh.

The survey did not detail the exact nature and geographical nature of this bubble, but cited three potential scenarios: equities, real estate and government bonds.

Grant Knuckey, CEO of ANZ Royal Bank, said of the three possibilities Cambodia’s economy was susceptible to a real estate bubble, but it was only a “latent risk”.

“The only one of those bubbles that is relevant here – and I’m sure the one survey respondents were referring to – is a real estate bubble,” he said.

“I think the conditions exist for a bubble to develop, but we don’t currently meet the threshold measures,” Knuckey added.

He said other risks cited in the survey, such as energy price shocks, should not affect Cambodia, given that oil prices were not expected to rise anytime soon, coupled with the country’s progress towards becoming more energy self-sufficient.

On a global front, the report had underemployment or unemployment as the most likely economic risk, with energy price shocks expected to have the highest impact.

“Economic risks of fiscal crisis and asset bubble remain very important and we have heard about this recently and they are also linked to underemployment and unemployment,” said Margareta Drzeniek Hanouz, head of Global Competitiveness and Risks at the World Economic Forum.

The top global concerns for 2016 were large-scale involuntary migration and the failure of climate change mitigation and adaptation.

MOST VIEWED

  • US think tank warns of China's 'ulterior motives'

    A US think tank on Tuesday warned that spreading Chinese investment in the Indo-Pacific follows a pattern of leveraging geopolitical influence at the expense of the nations receiving investment, including Cambodia. The report looks at a sample of 15 Chinese port development projects, noting that the

  • Defence Ministry denies weapons in smuggling case came from Cambodia

    After a Thai national was arrested last week for allegedly smuggling guns from Cambodia to Thailand, Cambodia's Defence Ministry has claimed the weapons seized during the arrest are not used in Cambodia, despite the fact that both types of rifle seized are commonly found in

  • More than three tonnes of ivory reportedly bound for Cambodia seized in Mozambique

    A total of 3.5 tonnes of ivory reportedly bound for Cambodia was seized by authorities in Mozambique late last week, according to the NGO Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). CITES' information was based on a report from the

  • Shipwreck found off coast of Koh Kong

    Royal Cambodian Navy researchers are working to identify a decades-old shipwreck found earlier this month off the coast of Koh Kong province. Divers found the 70-metre-long wreck on April 4 about a mile from Koh Chhlam island, according to Navy officials. Deputy Navy Commander Tea Sokha,