Cambodia mobilizes $62M through govt bonds
Cambodia mobilizes $62M through govt bonds
The Cambodian government has mobilized about $62 million from local investors through the issuance of government bonds in the first semester of this year to support public investment projects, according to a report by the National Bank of Cambodia.
This achievement underscores the growing confidence of domestic investors in the country’s economic trajectory and the government’s fiscal management.
The funds raised in the first six months of this year represented more than 50 percent of the targeted $108 million that the government set to raise in 2024.
“Auctions of government bonds have been made six times in the first six months of this year, with a total amount of 255.3 billion riels (approximately $62 million),” read the report.
The funds raised from the bond sales will be allocated to crucial public investment projects aimed at bolstering infrastructure and other essential sectors and promoting economic growth and productivity.
The Ministry of Economy and Finance started issuing government bonds in September 2022 as a new financial instrument, enabling the government to augment domestic revenue, thereby reducing the need to borrow from foreign sources for infrastructure development.
“The Royal Government issues bonds under the objective of financing projects that can provide direct revenue to the government and provide quick returns to ensure sustainable investment efficiency in managing public debt and the national budget,” the ministry said in a report.
The issuance of sovereign bonds is also to finance projects that can provide direct revenue to the government and ensure investment efficiency and sustainability of public debt management.
Government bonds are currently auctioned through the National Bank of Cambodia Auction Platform (NBCP) with investors from institutional investors such as banks and insurance companies.
The central bank said it has been working and preparing legal procedures and facilitation to allow non-bank companies to make transactions on government bonds in NBCP both in the primary market and secondary market.
Government bonds have also been planned to be issued through a second platform called the Government Securities Auction Platform (GSAP), under the Cambodia Securities Exchange (CSX).
Investors in sovereign bonds will enjoy a 50-percent deduction of withholding tax on the interest earned from holding and trading the bonds, and tax exemption on capital gains from purchasing and trading the bonds for three years, according to the Ministry of Economy and Finance.
