Cambodia and South Korea to establish SEZ for Korean companies

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CSX index closes lower amid mixed stock performances On May 20, 2024, the CSX index closed at 415.4 points, down 0.47% from the previous day. The main board showed mixed results: PWSA (+0.55%), GTI (+0.44%), and PAS (+0.16%) posted gains, while PEPC (-3.56%), CGSM (-0.82%), MJQE (-0.49%), and PPAP (-0.30%) saw declines. PPSP remained unchanged. On the growth board, DBDE remained unchanged, whereas JSL rose by 0.50%. The total trading volume was 152,346 shares, with a cumulative trading value of KHR 636 million. (Source: YSC Research)

Economy and Industry

Cambodia and South Korea to establish SEZ for Korean companies Cambodia and South Korea are strengthening their economic partnership by establishing special economic zones (SEZ) for Korean companies in Cambodia. This initiative, announced after a meeting between Cambodian Prime Minister Hun Manet and South Korean President Yoon Suk Yeol on May 16, 2024, aims to attract more Korean businesses and investments. Details on the zone's specifics are under discussion, with the Council for the Development of Cambodia (CDC) and the Korean Embassy involved. Cambodia Chamber of Commerce Vice President Lim Heng noted the SEZ would boost foreign direct investment (FDI) and offer technology transfer and upskilling for Cambodian workers. This initiative builds on the Cambodia-Korea Free Trade Agreement (CKFTA) and plans to leverage the Regional Comprehensive Economic Partnership (RCEP) and other free trade agreements for mutual benefit. (Source: Khmer Times)

Agricultural loans decline as Cambodia's economy diversifies As Cambodia diversifies its economy, the share of agricultural loans in rural credit has fallen from 35.8% to 31% over five years, according to the National Bank of Cambodia (NBC). Agriculture remains vital, contributing 22% to Cambodia's GDP in 2023, down from 36% in 2013. The rise of industries such as textiles, tourism, and manufacturing has shifted loan patterns. In 2023, 114 rural credit institutions (RCIs) allocated 31.7% of loans to agriculture, compared to 35.8% five years ago. Other sectors, including commerce, services, and construction, have seen increased lending. Dr. Jayant Menon of ISEAS-Yusof Ishak Institute notes significant rural-urban migration from agriculture to industry and services. However, this trend may be reaching its limit. RCIs, which cater to low-income households, particularly in rural areas, have faced scrutiny for ethical practices. In 2023, NBC revoked the licenses of 109 RCIs, reducing the total to 114 from 245 in 2019. (Source: Khmer Times)

Korea FDI reaches $5 billion Prime Minister Hun Manet announced that the bilateral trade volume between South Korea and Cambodia reached approximately $751 million, with Korean FDI in Cambodia at $30 million last year, totaling $5 billion. At the Cambodia-Korea Business Forum, attended by over 300 investors, Hun Manet highlighted Korea as a major trade and investment partner, ranking 11th in trade volume and 9th in FDI for Cambodia in 2023. The Cambodia-Korea Free Trade Agreement, signed in December 2022, aims to facilitate further investment. The event saw the signing of four MoUs and two agreements, including partnerships with JB Financial Group, Kookmin Bank, Woori Bank, and the Korea Credit Bureau to enhance cross-border QR payments, remittances, and financial services. The agreements are intended to improve financial accessibility and efficiency, benefiting migrant workers and supporting trade and tourism. (Source: Khmer Times)

Corporate News

Wing Bank partners with Mekong EV to offer electric motorcycle loans Wing Bank (Cambodia) Plc. has partnered with Mekong EV Co., Ltd. to provide loans, up to $5000, for individuals purchasing TAILG Electric Motorcycles and collateral-free loans for distributors. Han Peng Kwang, CEO of Wing Bank, emphasized the eco-friendly benefits of electric vehicles, including lower CO2 emissions and reduced operating costs. A Ministry of Environment study found that electric motorcycles emit five times less CO2 than conventional motorcycles and save users around $1.60 per 100 km. Customers can now access Wing Bank's Motor Loans with competitive interest rates and no collateral requirements. Meanwhile, distributors of Mekong EV can benefit from collateral-free Quick Loans via Wingmarket to expand their business. Mekong EV, the exclusive importer of TAILG motorcycles in Cambodia, is actively seeking business partners to join their network and become distributors across Cambodia. Additionally, Mekong EV will assist dealers in business management, marketing and sales, store design, and other various support. The collaboration aims to promote environmentally friendly transportation and align with Cambodia's vision of becoming a sustainable and green city by 2050. (Source: Khmer Times)

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