In recent years, Cambodia's economy has grown rapidly. According to a report released by the International Monetary Fund (IMF) in January 2024, Cambodia's economic growth rate is expected to reach 6% in 2024. With the fast growth of the economy, Cambodia’s capital market has also gained significant attention. How does Cambodia’s capital market compare to more developed ones, and what are its key characteristics?  

At the First Capital Market Summit Forum in Cambodia, international experts like Mr. Samuel Lui, Head of Investment Banking at FTAG, and Mr. Barrett Lu, Managing Director of China Cinda Asset Management Co., Ltd., shared their views on the current overview of Cambodia's capital market.

They pointed out that while Cambodia's capital market is still in its development stage, it holds great potential. The Cambodian government is actively implementing policies to improve the country’s infrastructure, a vibrant human resource pool is driving social change and innovation, and the country’s growing soft power is becoming a strong force for national development. These factors are expected to help Cambodia’s capital market enter a golden period of growth soon.

The Potential of Cambodia's Capital Market is Emerging

with Future Growth Expected 

Experts in foreign capital markets generally believe that Cambodia's capital market is still in its early stages but has great potential. It is expected to enter a golden period of development in the next 10 to 20 years. 

Mr. Samuel Lui, head of investment banking at FTAG, said that Cambodia's capital market is still young, but the Cambodian government's recent policies and actions show strong potential for growth.

"The Cambodian Royal Government is actively promoting innovation in various sectors. For example, with the new electronic entry system, foreigners used to fill out paper cards to enter Cambodia, but now they can do it online through the Cambodian entry system.

These changes show that the Cambodian Royal Government is not only focused on improving physical infrastructure but also on developing digital governance, improving government services, and following the government's "Pentagon Strategy."

On August 24, 2023, Prime Minister Hun Manet announced the implementation of the Pentagon Strategy and the first phase of the national development plan. The Pentagon Strategy is a long-term plan aimed at turning Cambodia into a high-income country. It focuses on five key areas: developing human resources, diversifying the economy, supporting private sector growth and job creation, strengthening resilience and sustainable development, and promoting the digital economy and society.

The strategy opens new doors for Cambodia’s development, driving economic growth and giving a fresh boost to its capital market.

Mr. Samuel Lui finds these changes both surprising and inspiring. A country that is efficient, convenient, and committed to making well-informed decisions sends positive signals to market participants, boosting investor confidence and attracting more international capital to Cambodia's capital market.

A Young Population Brings Strong Momentum to

Cambodia's Capital Market Development

Mr. Samuel Lui highlighted that Cambodia's capital market is young and full of potential.

"The last time I visited Cambodia was 12 years ago when I was part of a delegation with Indonesian President Susilo Bambang Yudhoyono, during President Obama's visit to Phnom Penh. Compared to 12 years ago, this time I see a Cambodia that is rapidly changing. 

For example, I see many energetic and vibrant young people. The data shows that the average age in Cambodia is 26. A country with such a young population has enormous potential in its capital market. I believe Cambodia’s capital market will enter a golden period in the next 10 to 20 years." 

According to Worldometer, as of September 4, 2024, the average age in Cambodia is 26, with 61.7% of the population between the ages of 15 and 59. This youthful population provides strong energy and potential for the growth of Cambodia’s capital market. 

First, a young population will drive business structure adjustments and innovation in Cambodia, increasing the need for companies to raise funds through the capital market. Second, a younger population will make the market more active and drive financial innovation. Finally, it will attract global investment, injecting strong momentum into Cambodia's capital market development. 

Mr. Barrett Lu, Managing Director of China Cinda Asset Management Co., Ltd. one of China's four largest asset management companies, agrees with this. He pointed out that the key to developing a capital market is the inflow of capital, and capital always follows people. 

As Cambodia’s Royal Government continues to invest in education and expand skills training programs, the quality of the country's human resources is improving. This provides strong support for the growth of industries like technology, finance, and manufacturing, attracting more funds into Cambodia’s capital market.

Cultural Heritage Empowers Top-Notch Services, 

Creating a “Magnet” for Capital 

At the forum, Mr. Barrett Lu also pointed out that Cambodia’s high-quality service environment is gradually becoming a key factor in attracting capital.

“First, when I checked into my hotel, I was surprised by the thoughtful and attentive service. Then, when I requested room service, it was provided within 10 minutes, and the staff even took off their shoes before entering the room. These small details left a deep impression on me, and I have never experienced this level of service anywhere else in the world.”

He believes that Cambodia’s rich cultural heritage and excellent service are important intangible assets for attracting capital. World heritage sites like Angkor Wat, combined with Cambodia’s unique folk traditions and the deep influence of Buddhism, provide strong support for the country’s service quality. This unique cultural charm, paired with exceptional service, makes Cambodia highly appealing to investors.

However, opportunities come with risks. Mr. Barrett Lu emphasized that as participants and promoters of Cambodia's capital market, while we see its potential for growth, we must also learn from the long-term experiences and successes of global capital markets. It’s important to objectively assess the advantages of investing in Cambodia’s capital market and to mitigate risk.

As the government continues to improve laws and regulations, enhance trading mechanisms, strengthen information disclosure, attract institutional investors, and drive innovation and development, investors should fully understand Cambodia’s investment policies and regulations, ensure legal employment practices, and fulfill social responsibilities. Only through collective efforts can Cambodia's capital market achieve steady growth, and through collaboration, we can build a stable, healthy, and vibrant capital market that supports Cambodia's long-term economic development.

With improving infrastructure, deepening capital market reforms, accelerated financial openness, and a young population, Cambodia is emerging with great potential and vast investment opportunities, positioning itself as a rising economic star in Southeast Asia.