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Malaysia investment firm eyes opportunity in Cambodian finance

Malaysia investment firm eyes opportunity in Cambodian finance

Malaysia-listed Gunung Capital Bhd, an investment holding company involved primarily in chartering out land-based transportation assets, is looking to acquire a 20 per cent stake in a Cambodian financial institution.

Malaysian media outlet Bernama reported on Wednesday that the management of the company has been invited by promoters of a yet-to-be-issued, fully fledged commercial banking licence in Cambodia to evaluate a proposal to participate in.

It said the company management is currently in advanced discussions regarding the allowable equity participation in financial institutions. The parties are also in advanced discussions on other qualitative and quantitative requirements, such as governance issues, imposed by the relevant authorities in the Kingdom on foreign equity participation.

“At this stage of evaluation and discussions, the company cannot confirm the amount of the investment value involved,” Bernama reported the company as saying in a filing with the Malaysian stock exchange, Bursa Malaysia.

“Upon completion of the evaluation of the proposal, and [that] the prospective yield of such an equity investment is strongly beneficial to the company, then the management will seek a meaningful equity participation of at least a 20 per cent equity stake to maximise on this investment opportunity,” it said.

The Post could not reach National Bank of Cambodia (NBC) director-general Chea Serey for comment on Thursday.

Bernama also reported that Gunung is potentially looking to unlock the value of the bank through a listing on the Cambodia Securities Exchange. Gunung said it was premature to conclude that a listing exercise in Cambodia is the company’s only option to unlock the value of an equity investment.

“This option is obviously a long-term strategy given the current infancy stage of the commercial bank proposal and the un-concluded evaluation of the proposal, and would require the necessary approvals from relevant authorities in Cambodia to list on the stock exchange,” Gunung was quoted as saying.

As of the end of last year, the Kingdom has 46 commercial banks, 15 specialised banks and 82 microfinance institutions (MFIs). There are also 248 rural credit operators, 15 leasing companies and 20 payment service providers, said the NBC Annual Report 2019.

Banks’ outstanding loan portfolio reached $24.5 billion last year while deposits stood at $25.5 billion. Among MFIs, loans reached $7.2 billion and deposits $3.9 billion, it said.

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