Trust investments reach close to $1.8 billion

Trust investments reach close to $1.8 billion

Signalling the high growth momentum, Sok Dara, Director General of the Trust Regulator, yesterday said that the funds invested in trust sector have reached nearly $1.8 billion.

Speaking at a seminar on ‘Money Market Trust’ at the Business Development Centre, Dara talked about the concept of ‘Money Market Trust’ saying, “It is a type of commercial trust established by the trustor (the owner of assets/property), who transfers funds to the trustee.

“The trustee manages and invests these funds in the money market, focusing on short-term debt instruments of high quality or other highly liquid financial instruments.”

In Cambodia, all trusts, including ‘Money Market Trusts’, require prior approval and registration permission from the trust regulator pursuant to the Law on Trust, the Sub-Decree on the Registration of Trust, the Sub-Decree on Financial Trust, and other relevant provisions currently in force.

Dara said the number of Commercial Trusts in the country has reached 1,176. “Real estate leads the sector at 784. It is followed by escrow services (298), fixed deposit (34), pension funds (32), shareholding (4), green bond (2) and cash (1).”

Speaking to Khmer Times, Dara said, “In 2024, we received around $430 million in the trust sector, which is a substantial increase from around $156 million in 2021 – the year in which the Trust Regulator was established.”

Khim Fadane, Deputy Director General of the General Department of International Cooperation and Debt Management at the Ministry of Economy and Finance, said the government bond market is on a growth trajectory.

“It was in 2019 when the government first prepared the framework to issue bonds and the first bond was issued subsequently during the pandemic period. In 2021, first framework for government bonds was developed in collaboration with the National Bank of Cambodia as well as the Securities and Exchange Commission of Cambodia.”

He pointed out the development of government bond market in the Kingdom has been planned to be implemented in two phases. “Phase I (2023-2026) and Phase II (2027-2028) clearly sets the priorities and goals for developing the sector.”

Fadane also listed the benefits of government bonds, which include mobilizing capital for public investments, diversifying financial sources alongside lowering borrowing costs, contributing towards risk management and financial stability apart from sustainable, inclusive socio-economic development.

“From an investor’s perspective, government bonds are a risk-free asset, which helps in portfolio diversification. These standardized instruments also offer fixed-income returns.”

He said prospective investors can obtain government bonds through direct as well as indirect channels. “Direct participation is buying the bonds through banking institutions or security firms while the indirect channel refers to buying from intermediaries.”

He stressed that Cambodia’s stable public debt status is an added advantage for the government bonds sector.

Seng Chanthoeun, Chief Executive Officer of Royal Group Securities Plc, said the Kingdom’s corporate bond sector is equally vibrant. “Corporate bonds are an ideal investment option, for they provide steady and predictable income stream, enhance portfolio diversification alongside tax incentives for bondholders.”

Speaking to Khmer Times, on the sidelines of the seminar, Michal Gorczewski, Chief Executive Officer of CCU Trust, said trusts are managed by licensed professionals, giving a chance for informed decisions that can help to optimise returns while mitigating risks.

“They also can provide diversification, spreading investments across multiple securities to reduce exposure to any single issuer. Investors benefit from regulatory oversight under the Trust Regulator, ensuring transparency and security.

“Additionally, trusts should offer greater accessibility to government and corporate securities, which may otherwise be challenging for individual investors to access directly. For risk-averse investors, government debt securities deliver low-risk, stable income, while corporate securities present opportunities for higher returns.

“This can be a good way to park investors’ money before making longer-term investment decisions in other assets. Moreover, trusts serve as a valuable succession planning tool, especially for long-term bond investments. With these advantages, trusts provide an efficient, secure, and strategic way to invest in Cambodia’s growing debt market.”

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