Logo of Phnom Penh Post newspaper Phnom Penh Post - Outstanding outlook forecast for the Kingdom’s corporate sector

Outstanding outlook forecast for the Kingdom’s corporate sector

Content image - Phnom Penh Post
The construction sector could be a growth driver for the domestic economy. Heng Chivoan

Outstanding outlook forecast for the Kingdom’s corporate sector

Cambodia’s corporate sector can look forward to robust earnings, strong growth and an active economy.

According to Anthony Galliano, the CEO of Cambodia Investment Management, corporate earnings can see a strong upward trend as a result of very positive gross domestic product (GDP) expansion.

“Large corporates will enjoy robust earnings growth on the back of strong GDP growth, moderate inflation and solid increases in foreign direct investment [FDI]. These figures have reached record levels in 2018 and followed and followed with a rigorous first quarter of 2019.”

He told The Post that sectors like the construction, real estate, agriculture, financial and garment are benefiting from the rising economic tide.

However, Galliano said that there could be some soft spots in certain areas but this will be mitigated by the ongoing trade war between the US and China.

“There are some weak spots, especially in tourism and hospitality, but Cambodia should benefit further in 2019 from the ongoing trade dispute between the US and China.

Galliano added that he expects another stellar performance in corporate earnings for the first half of this year.

“Barring any unforeseen surprises, broad negative global events, or accelerated action by European Union on EBA [Everything But Arms], Cambodia should record another outstanding economic performance in 2019, best in Asia again, with robust corporate earnings as a result,” he said.

Content image - Phnom Penh Post
Galliano expects the Cambodian corporate sector to recover remarkably.

Galliano also said that while there were bumps in the economy this year, he expects the Cambodian corporate sector to recover remarkably.

“FDI is slightly lower year on year, but still very healthy. The construction industry may slow marginally, but with big infrastructure projects on the table, a strong recovery is expected.”

He said that certain sectors will also see improved earnings compared with 2018.

Galliano added that he expects continued strong credit growth, an acceleration in retail sales.

“There will be continual broadening of home ownership and fintech [financial technology], banking and insurance to perform particularly well.”

He felt that there are positive signs despite the gloom about the potential EBA withdrawal by the EU,Cambodia fortunately was able to offset this as a beneficiary of the ongoing US and China trade dispute.

“Bilateral trade between the two countries [US-Cambodia] is up 27 per cent to $3 billion. The garment sector should be stable up to 2019, especially if the US continues to skirmish with China on trade,” Galliano said.

Content image - Phnom Penh Post
The CSX could play a pivotal role to propel the capital market but it is still at a nascent stage. Heng Chivoan

On the Cambodia Stock Market (CSX), he felt that there must be some major changes in the financial and capital markets for the local bourse to play a major role in the corporate sector.

“There will have to be a paradigm shift in financial and capital markets development for the CSX to become meaningful and take its relevant place in the economic infrastructure of the Kingdom. With just five listed stocks, trading volume typically of 3K [thousand] to 20K shares a day, and a barely moving index, the CSX remains inconsequential.”

He said that while the government is providing impetus and incentives for companies to list on the CSX, there must be tighter enforcement on taxation.

“The government has been promoting listing incentives, especially for SMEs (small medium industries). But the real catalyst for driving listing will be stricter tax enforcement on large and medium corporates by the General Department of Taxation,” said Galliano.

“There must also be improving transparency and corporate governance. The National Bank of Cambodia [NBC] should also encourage development of debt markets, particularly a functioning inter-bank market and government and corporate bond market.”

This, he said, would lessen the reliance on the bank market where capital remains expensive, and elusive for small businesses.

Galliano sees the future engine of the Cambodian economy in SMEs. He felt that “entrepreneurship is in the Khmer DNA” and Cambodians will provide a strong impetus to the Kingdom’s growth this year.

“The Khmer people will continue to contribute to the economic development of the Kingdom with increasing domestic business ownership growth.

“Small and medium Khmer owned enterprises will be the future of the Cambodian economy and I expect this sector to blossom over the next decade,” said Galliano.


  • Ministry issues warning over coronavirus outbreak

    The Ministry of Health on Wednesday asked the public to be on “high alert” as a new virus wreaks havoc across Asia. However, no cases have been reported in the Kingdom thus far. The 2019 Novel Coronavirus (2019-nCoV) has raised the alarm for its similarity to

  • PM urges precaution amid virus outbreak

    Prime Minister Hun Sen on Sunday called on all Cambodians to bump up precautions to avoid contracting the 2019 Novel Coronavirus (2019-nCoV) that has already killed more than 50 people in China. The prime minister told the public to remain calm but alert about the possibility of

  • Gov’t slams NGO over 2019 corruption report

    The government on Thursday slammed a report that described the Kingdom as highly corrupt. Government spokesperson Phay Siphan dismissed the latest Transparency International (TI) report as “just an advertisement of NGOs to promote their own interests”. Released on Thursday, the report puts Cambodia near the

  • No power shortages next dry season, says energy minister

    Minister of Mines and Energy Suy Sem has assured the public that Cambodia will not suffer power shortages during the next dry season. Speaking on local TV on Tuesday, Sem projected a rise in power demand during 2020’s dry season – which starts in November and

  • App to connect farmers to millions

    The Ministry of Agriculture, Forestry and Fisheries has soft-launched a mobile app that connects farmers with potential buyers and gives them access to critical market information. The ministry’s Agriculture Marketing Office chief Meach Yady said the ‘CamAgriMarket’ app gives farmers a platform to showcase

  • Gov’t ups security to block virus

    With the new coronavirus claiming its 17th life in China, the Cambodian Ministry of Health on Thursday said it is taking measures to ensure the disease does not enter the Kingdom, including inspecting all flights from Wuhan City, the outbreak’s epicentre. Ministry secretary of