MONDAY, JULY 27, 2009
By LESLIE P. NORTON
Barron's (USA)
Checking out Cambodia's nascent economy.
REMEMBER FRONTIER MARKETS? Those in Pakistan and Vietnam, the high-octane sector of the developing world, promising even swifter growth than the more mature emerging markets?
They've been left in the dust this year as investors swarmed to so-called BRIC funds -- those that trade in shares of Brazilian, Russian, Indian and Chinese companies -- as well as to emerging-markets funds. The MSCI BRICs index has returned 53% in 2009, while emerging markets have returned 43%, and the corresponding frontier markets index, just 4.8%. (The Templeton Frontier Markets Fund is up 23%.)
Says Michael Hartnett, Merrill Lynch's global equity strategist: "Interest in frontier markets has lagged because of liquidity issues." But if enthusiasm about growth in China and almost anywhere outside the developed world gathers steam, expect new interest in frontier markets to jump.
David Wilton, chief investment officer of the International Finance Corp.'s private-equity and investment-funds department, thinks a change is already under way: "The mood has shifted noticeably from February. Now the listed equity markets have recovered, and they're thinking about investing."
The latest market to get attention is Cambodia, where a handful of investors familiar with Vietnam and Thailand are trying to set up funds. Cambodia is very poor, with rampant corruption and crony capitalism. But economic growth is robust, even if the economy is just $8 billion. Douglas Clayton, managing partner of Phnom Penh-based Leopard Capital, has raised just under $30 million and is trying to raise more; sitting on his board is markets commentator and Barron's Roundtable contributor Marc Faber.
Cambodia doesn't have a stock market yet, but Clayton believes it could by year's end. There are numerous foreign-sponsored companies, including banks and cellphone operators, though the economy is largely agricultural. The median age in Cambodia is 21, the lowest in Asia. Clayton reckons that about 70% of the population, which numbers 14 million, wasn't yet born during the horrific regime of the Khmer Rouge, estimated to have killed two million Cambodians.
"Cambodia is back open for business," says Clayton, who is applying for citizenship. "This is a failed state that's back on its feet."
Conservative investors aren't impressed. Says Peter Newell, managing director of Vontobel Asset Management: "We look for a $50 million bottom line, low leverage, high ROA [return on assets]. Can you find that in a frontier market? No. Not even in China, not easily."
David Wilton of the International Finance Corp. agrees: Investing in Cambodia may be, as he delicately puts it, "a wee bit nascent," and there are few deals to support private-equity funds. Still, Wilton concedes that the IFC is very close to seeding a fund to invest there.
REMEMBER FRONTIER MARKETS? Those in Pakistan and Vietnam, the high-octane sector of the developing world, promising even swifter growth than the more mature emerging markets?
They've been left in the dust this year as investors swarmed to so-called BRIC funds -- those that trade in shares of Brazilian, Russian, Indian and Chinese companies -- as well as to emerging-markets funds. The MSCI BRICs index has returned 53% in 2009, while emerging markets have returned 43%, and the corresponding frontier markets index, just 4.8%. (The Templeton Frontier Markets Fund is up 23%.)
Says Michael Hartnett, Merrill Lynch's global equity strategist: "Interest in frontier markets has lagged because of liquidity issues." But if enthusiasm about growth in China and almost anywhere outside the developed world gathers steam, expect new interest in frontier markets to jump.
David Wilton, chief investment officer of the International Finance Corp.'s private-equity and investment-funds department, thinks a change is already under way: "The mood has shifted noticeably from February. Now the listed equity markets have recovered, and they're thinking about investing."
The latest market to get attention is Cambodia, where a handful of investors familiar with Vietnam and Thailand are trying to set up funds. Cambodia is very poor, with rampant corruption and crony capitalism. But economic growth is robust, even if the economy is just $8 billion. Douglas Clayton, managing partner of Phnom Penh-based Leopard Capital, has raised just under $30 million and is trying to raise more; sitting on his board is markets commentator and Barron's Roundtable contributor Marc Faber.
Cambodia doesn't have a stock market yet, but Clayton believes it could by year's end. There are numerous foreign-sponsored companies, including banks and cellphone operators, though the economy is largely agricultural. The median age in Cambodia is 21, the lowest in Asia. Clayton reckons that about 70% of the population, which numbers 14 million, wasn't yet born during the horrific regime of the Khmer Rouge, estimated to have killed two million Cambodians.
"Cambodia is back open for business," says Clayton, who is applying for citizenship. "This is a failed state that's back on its feet."
Conservative investors aren't impressed. Says Peter Newell, managing director of Vontobel Asset Management: "We look for a $50 million bottom line, low leverage, high ROA [return on assets]. Can you find that in a frontier market? No. Not even in China, not easily."
David Wilton of the International Finance Corp. agrees: Investing in Cambodia may be, as he delicately puts it, "a wee bit nascent," and there are few deals to support private-equity funds. Still, Wilton concedes that the IFC is very close to seeding a fund to invest there.
funny how someone can just label cambodia as such! don't hate and don't be jealous! show some love and forgiveness like god taught us all! ignorant is the root of all evil. be different for a change! god bless cambodia.
ReplyDeleteDemocratic Kampuchea Pol Pot Khmer Rouge Regime had committed:
ReplyDeleteTortures
Executions
Massacres
Atrocities
Crimes Against Humanity
Starvations
Overwork to Death
Slavery
Rapes
Human Abuses
Assault and Battery
Cambodian People's Party Hun Sen Khmer Rouge Regime had committed:
Assassinations
Assassinate Journalists
Assassinate Political Opponents
Murders
Killings
Extrajudicial Execution
Grenade Attack
Terrorism
Drive by Shooting
Tortures
Intimidations
Death Threats
Threatening
Human Abductions
Human Rights Abuses
Human Trafficking
Drugs Trafficking
Under Age Child Sex
Corruptions
Bribery
Illegal Mass Evictions
Illegal Land Grabbing
Illegal Firearms
Illegal Logging
Illegal Deforestation
Illegally use of remote detonation on Sokha Helicopter, while Hok Lundy and others military official on board.
Illegally Sold State Properties
Illegally Remove Parliamentary Immunity of Parliament Members
Plunder National Resources
Acid Attacks
Turn Cambodia into a Lawless Country
Oppression
Injustice
Steal Votes
Bring Foreigners from Veitnam to vote in Cambodia for Cambodian People's Party.
Abuse the Court as a tools for CPP to send political opponents and journalists to jail.
Abuse of Power
Abuse the Laws
Abuse the National Election Committee
Abuse the National Assembly
Violate the Laws
Violate the Constitution
Violate the Paris Accords
Impunity
Under Cambodian People's Party Hun Sen Khmer Rouge Regime, no criminals that has been committed all of these crimes above within Hun Sen Khmer Rouge government have ever been brought to justice.
We cannot get a lesson from those who caused the World Economy to collapse in the 21st century.
ReplyDeleteYou can call Cambodia a land of crony capitalism; what name do you propose for the United States and Wall Street that have failed on more than 600 trillion dollars of derivatives.
A Cambodian economist
7:42Am they have thing to eat you are not!
ReplyDelete