Logo of Phnom Penh Post newspaper Phnom Penh Post - Plans for sovereign bonds still far away

Plans for sovereign bonds still far away

Plans for sovereign bonds still far away

There still is a long way to go until Cambodia issues its first sovereign bonds, the director general of the National Bank of Cambodia (NBC) told the Post yesterday.

“Some day, we need to move into that direction, together with the Asean member states,“ Nguon Sokha said yesterday.

On Friday, she announced during the Asian Development Bank (ADB)’s annual meeting in India that Cambodia is studying the possibility of issuing sovereign bonds, supported by the ADB and the Asean+3 group that includes China, Japan and South Korea. The bonds would help the government to move away from its dependence on overseas aid.

“However, capacity building and infrastructure are the biggest technical issues. Politically, we need to strengthen the confidence in the bond market to make sure it will be successful,“ Sokha said.

According to the ADB’s Senior Financial Sector Specialist Hiroyuko Aoki, it would be a good time for the Cambodian government to improve financial stability by issuing sovereign bonds.

“The main challenge of issuing government bonds is maintaining sound fiscal management. As the budget deficit is not so significant, the risk is deemed as manageable at this moment,” he said.

Not issuing government bonds may carry far higher risks, Aoki added. “As the life insurance sector and pensions are emerging, they will be seeking long-term investment opportunities that are presently unavailable.”

He also said the government bond market is a key measure to curb domestic yields and benchmark interest rates for the corporate sector, thus leading to financial support for SMEs. It would also be a major tool for adjusting money supply.

“Government bonds can be an alternative for investments for real estates and can serve as a preventive measure for financial bubbles, especially in the real estate sector,” Aoki said.

MOST VIEWED

  • Serious flooding across country

    The Kampong Speu provincial Committee for Disaster Management on Wednesday issued an alert after non-stop heavy rain caused widespread flooding. In Koh Kong province, authorities are working with the disaster committee and the Cambodian Red Cross to assist those affected after more than 350 homes were

  • CNRP points to King in call for vote boycott

    Leaders of the former Cambodia National Rescue Party (CNRP) have taken a new tack in their call for a boycott of the national elections later this month. They are now claiming that the people should follow the King, who is expected to abide by tradition

  • Actress’s NGO takes heat for promoting the ruling party

    An actress’s NGO which participated in an election campaign event contrary to the Law on Association and Non-Governmental Organisations (Lango) has been slammed. Chorn Chanleakena, a celebrity and the president of the Association of Artists Volunteering to Help Society, allegedly led its members in

  • Troop moves ‘won’t worry people’

    Senior officials at the Ministry of Defence and National Police said on Tuesday that riot training provided to the country’s police forces were aimed at preventing unexpected demonstrations and strikes before and after the July 29 national elections. The troop mobilisation, they said, would not