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Asia Economic Forum April 7, 2009
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Sailing Through Rough Seas:
A Cambodia Investor’s Perspective
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Global Investment Backdrop
2Leopard Capital, LP
• Risk Aversion
• Darwinism / Upheaval
• Worst or best of times
• Opportunities in Crisis
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The World Economy
3
• Building on fire
• Most developed – top floors
• Least developed – bottom floors
Leopard Capital, LP
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Asia’s Situation
4Leopard Capital, LP
Cambodia Vietnam Philippines Indonesia Thailand Malaysia South Korea Japan Singapore0
10,000
20,000
30,000
40,000
50,000
60,000
1,900 2,600 3,200 3,600
8,000
14,500
25,000
33,500
49,900
GDP per capita - PPP basis (USD) 2007 (source: CIA)
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Coping with the Credit Crunch
5
0%20%40%60%80%
100%120%140%160%180%Domestic Credit to GDP (2007) Source: ADB
Korea Malaysia Vietnam Thailand Cambodia
Leopard Capital, LP
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The Situation
6
Catch-up opportunity for LDCs – to take bigger slice of smaller pie• Improve internal policies• Reduce inefficiencies, barriers, and unofficial costs• Bypass export sectors that are overinvested
Leopard Capital, LP
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Investment Backdrop
7Leopard Capital, LP
Next Cycle’s Winners:• Unused Resources vs. Population size• .• .• .• .
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Cambodia’s Commodities Endowment
8Leopard Capital, LP
• Crops: Rice, Cassava, Corn, Soybeans, Sugar• Trees: Rubber, Palm, Fruit, Teak, Acacia, Cashew• Energy: Oil, Gas, Coal• Mining: Gold, Bauxite, Nickel, Zinc, Copper, Lead, Iron• Water: Irrigation, Hydropower• Meat potential• Aquaculture potential
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Investment Backdrop
9Leopard Capital, LP
Cambodia Malaysia Indonesia Thailand Vietnam Philippines Japan South Korea0
100
200
300
400
500
600
Population Density
ADB Population density per km2
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Investment Backdrop
10Leopard Capital, LP
Next Cycle’s Winners:• Unused resources vs. Population size• Sustainable energy policy• .• .• .
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Investment Backdrop
11Leopard Capital, LP
Next Cycle’s Winners:• Unused resources vs. Population size• Sustainable energy policy• .• .• .
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Electrification
12Leopard Capital, LP
Cambodia Indonesia Philippines Malaysia Japan Thailand0
500
1,000
1,500
2,000
2,500
77
487
653
1,826
1,9782,048
Power usage per capita (kwh) 2007 (source: ADB)
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Investment Backdrop
13Leopard Capital, LP
Next Cycle’s Winners:• Significant resources vs. Population size• Sustainable energy policy• Favorable Demographics• .
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Differing Challenges Ahead
14
Population Age Pyramid Comparison
Cambodia: Investing in Modernization
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Investment Backdrop
15Leopard Capital, LP
Next Cycle’s Winners:• Significant resources vs. Population size• Sustainable energy policy• Favorable Demographics• Political and Policy Stability
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Assessing Risks Now
16
India
Thail
and
Malaysi
a
Indon
esia
Philip
pines
Cambo
diaChin
a
Vietna
m012345678
2007-20082008-2009
2007 and 2008 (Source: Political & Economic Risk Consultancy Ltd.)
Cambodia: Investing in Modernization
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Investment Backdrop
17Leopard Capital, LP
Next Cycle’s Winners:• Significant resources vs. Population size• Sustainable energy policy• Favorable Demographics• Political and Policy Stability• Sufficient Infrastructure
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Cambodia’s Improving Infrastructure
• Sea Port upgraded, new ports coming
• International Airports (3)
• Roads and bridges
• Railroads
• Electricity
• Wireless Network
• Internet fiber backbone
18Leopard Capital, LP
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Investment Backdrop
19Leopard Capital, LP
Next Cycle’s Winners:• Significant resources vs. Population size• Sustainable energy policy• Favorable Demographics• Political and Policy Stability• Sufficient Infrastructure• Pro-investment policies and low taxes
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Tax Comparison
20Leopard Capital, LP
Cambodia Singapore Philippines Malaysia South Korea Vietnam Indonesia Thailand Japan0
5
10
15
20
25
30
35
40
45
20 20
2527 27.4 28
30 30
40.7
Corporate tax rate (% of GDP) 2006 (source: ADB)
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Countercyclical Investment Opportunities
21Leopard Capital, LP
• Tourism Development (beyond Siem Reap)• .• .• .• .
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Tourism Development Opportunity
22Leopard Capital, LP
Cambodia Philippines Vietnam Indonesia Singapore Thailand Malaysia0
5
10
15
20
25
2.13.1
4.2
5.5
10.3
14.5
21
Tourist arrivals (mn) 2007 (sources: various)
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Countercyclical Investment Opportunities
23Leopard Capital, LP
• Tourism Development (beyond Siem Reap)• Rural Banking• .• .• .
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Banking Opportunity
24
0%20%40%60%80%
100%120%140%160%180%Bank loans to GDP (2007) Source: ADB
Korea Malaysia Vietnam Thailand Cambodia
Leopard Capital, LP
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Countercyclical Investment Opportunities
25Leopard Capital, LP
• Tourism Development (beyond Siem Reap)• Rural Banking• Wireless Communications for the poor• .• .
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Communications Opportunity
26Leopard Capital, LP
Cambodia Vietnam Indonesia Philippines Thailand Japan South Korea Malaysia Singapore0
20
40
60
80
100
120
140
13
3033
56
7176
85 86
116
Mobile phone penetration (%) 2007 (source: Asia Mobile Communications & Mobile Data report)
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Countercyclical Investment Opportunities
27Leopard Capital, LP
• Tourism Development (beyond Siem Reap)• Rural Banking• Wireless Communications for the poor• “Off-grid” Renewable Power• .
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Electrification Opportunity
28Leopard Capital, LP
Cambodia Indonesia Philippines Malaysia Japan Thailand0
500
1,000
1,500
2,000
2,500
77
487
653
1,826
1,9782,048
Power usage per capita (kwh) 2007 (source: ADB)
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Countercyclical Investment Opportunities
29Leopard Capital, LP
• Tourism Development (beyond Siem Reap)• Rural Banking• Wireless Communications for the poor• “Off-grid” Renewable Power• Affordable Housing
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Property Development Opportunity
30Leopard Capital, LP
Cambodia Vietnam Thailand Indonesia Malaysia Japan South Korea Singapore0
20
40
60
80
100
120
17.8
27.432.9
43.1
63.466
80.8
100
Urban population (% total pop.) (source: ADB)
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Opportunity for Cambodia
31
• Retool the Economy• Create Tourism Paradise• Add Value to Natural Resources• Champion emerging global themes:
• Renewable / Sustainable• Safe / Organic • Fair / Equitable
• Import Substitution
Leopard Capital, LP