KHMER INTELLIGENCE NEWS
28 July 2009
Foreign Trade Bank falls victim of economic crisis and property glut (2)
Cambodia’s Foreign Trade Bank (FTB), which is 50 percent owned by the state, is in serious trouble because of the worsening economic crisis and the resulting property glut. A heavy portfolio of bad loans in the property sector may require an overhaul of the bank in the next few months. Canadia Bank, which is Cambodia’s largest bank followed by FTB, is in the same alarming situation. The two financial institutions have been able so far to avoid bankruptcy thanks to a massive fund injection from the National Bank of Cambodia. The other FTB shareholders include Canadia Bank (originally 30 percent) and businessman Ung Bun Heuv (originally 20 percent). Canadia Bank itself is now actually controlled by Prime Minister Hun Sen’s family (originally 35 percent) even though its president and (still?) major shareholder is a shady businessman from Canada, Mr. Pung Kheav Se (originally 65 percent). The fall of Cambodia’s two leading and intertwined commercial banks would lead to the collapse of the whole banking system.
Market operators expect a continuous fall in the Cambodian currency (2)
The Riel has been falling against the US Dollar and major regional currencies over the last few weeks. This represents an acceleration of a trend that has been noticeable over the last 18 months. In January 2008, the US Dollar was worth 4000 Riels. The exchange rate went up to 4125 Riels for $1 by January 2009. Today, one needs 4250 Riels to buy $1. The Riel has therefore dropped by 6.25% since January 2008, whereas the Thai Baht has remained stable against the Dollar during the same period of time (around 34 Bath for $1). Market operators expect the Riel to fall more sharply in August and September, with the exchange rate possibly reaching 4500 Riels for $1. The reasons for this evolution are related to the worsening economic crisis, the severe drop in State revenue and the growing budget deficit. To cover the deficit the National Bank of Cambodia is increasingly printing bank notes (paper money), thus fueling inflation, which may get out of control by the end of the year.
French President Nicolas Sarkozy invited to visit Cambodia in September (2)
While on his official visit to France on July 13 and 14, Cambodian Prime Minister Hun Sen invited French President Nicolas Sarkozy to visit Cambodia in September. A big event then will be the inauguration of the Sihanoukville airport which has just been modernized and expanded and will be managed, like the Phnom Penh and Siemreap-Angkor airports, by a local subsidiary (Société Concessionnaire des Aéroports or SCA) of the French construction group Vinci. The French authorities have yet to positively respond to Hun Sen’s invitation because they are taking into consideration the deterioration in the social and political climate in Cambodia with the increasing number of land evictions and human rights violations and the recent spate of defamation lawsuits against government critics here. President Sarkozy had also received a letter from opposition leader Sam Rainsy prior to Hun Sen’s visit pointing to the way France could really help Cambodia. Read Sam Rainsy’s letter at http://tinyurl.com/lh39sn
CPP parliamentarian involved in criminal acts (1)
A CPP National Assembly member, Long Sakhorn is well known for her involvement in public scandals and a long series of criminal acts, which may lead her to jail since the ruling party is more and more embarrassed by her openly conducting reprehensible activities and her stubbornness. A widow of Sin Song, a former coup leader in 1994, she is continuously involved in land grabbing, environment destruction (deforestation and river filling), deception and forgery of documents and thumbprints. She is expert in cheating people and misleading the courts where she is known for her securing the support of judges through bribery. Concrete examples with photos of Long Sakhorn’s criminal offenses are presented at http://tinyurl.com/llokd2
Cambodia’s Foreign Trade Bank (FTB), which is 50 percent owned by the state, is in serious trouble because of the worsening economic crisis and the resulting property glut. A heavy portfolio of bad loans in the property sector may require an overhaul of the bank in the next few months. Canadia Bank, which is Cambodia’s largest bank followed by FTB, is in the same alarming situation. The two financial institutions have been able so far to avoid bankruptcy thanks to a massive fund injection from the National Bank of Cambodia. The other FTB shareholders include Canadia Bank (originally 30 percent) and businessman Ung Bun Heuv (originally 20 percent). Canadia Bank itself is now actually controlled by Prime Minister Hun Sen’s family (originally 35 percent) even though its president and (still?) major shareholder is a shady businessman from Canada, Mr. Pung Kheav Se (originally 65 percent). The fall of Cambodia’s two leading and intertwined commercial banks would lead to the collapse of the whole banking system.
Market operators expect a continuous fall in the Cambodian currency (2)
The Riel has been falling against the US Dollar and major regional currencies over the last few weeks. This represents an acceleration of a trend that has been noticeable over the last 18 months. In January 2008, the US Dollar was worth 4000 Riels. The exchange rate went up to 4125 Riels for $1 by January 2009. Today, one needs 4250 Riels to buy $1. The Riel has therefore dropped by 6.25% since January 2008, whereas the Thai Baht has remained stable against the Dollar during the same period of time (around 34 Bath for $1). Market operators expect the Riel to fall more sharply in August and September, with the exchange rate possibly reaching 4500 Riels for $1. The reasons for this evolution are related to the worsening economic crisis, the severe drop in State revenue and the growing budget deficit. To cover the deficit the National Bank of Cambodia is increasingly printing bank notes (paper money), thus fueling inflation, which may get out of control by the end of the year.
French President Nicolas Sarkozy invited to visit Cambodia in September (2)
While on his official visit to France on July 13 and 14, Cambodian Prime Minister Hun Sen invited French President Nicolas Sarkozy to visit Cambodia in September. A big event then will be the inauguration of the Sihanoukville airport which has just been modernized and expanded and will be managed, like the Phnom Penh and Siemreap-Angkor airports, by a local subsidiary (Société Concessionnaire des Aéroports or SCA) of the French construction group Vinci. The French authorities have yet to positively respond to Hun Sen’s invitation because they are taking into consideration the deterioration in the social and political climate in Cambodia with the increasing number of land evictions and human rights violations and the recent spate of defamation lawsuits against government critics here. President Sarkozy had also received a letter from opposition leader Sam Rainsy prior to Hun Sen’s visit pointing to the way France could really help Cambodia. Read Sam Rainsy’s letter at http://tinyurl.com/lh39sn
CPP parliamentarian involved in criminal acts (1)
A CPP National Assembly member, Long Sakhorn is well known for her involvement in public scandals and a long series of criminal acts, which may lead her to jail since the ruling party is more and more embarrassed by her openly conducting reprehensible activities and her stubbornness. A widow of Sin Song, a former coup leader in 1994, she is continuously involved in land grabbing, environment destruction (deforestation and river filling), deception and forgery of documents and thumbprints. She is expert in cheating people and misleading the courts where she is known for her securing the support of judges through bribery. Concrete examples with photos of Long Sakhorn’s criminal offenses are presented at http://tinyurl.com/llokd2
