Category Archives: Cambodia

A Very Frank Discussion of Corruption and Risk in Frontier Markets

2013.02.22.Frank discussion of corruption and risk in Frontier MarketsHuge kudos to Andrew Henderson of Nomad Capitalist and Chris Tell of Capitalist Exploits for this discussion of investment prospects primarily in frontier markets. The focus is mainly on Mongolia, but they also cover Fiji, Myanmar and Cambodia. The podcast is worth listening to in its entirety, but the discussion of risk and corruption in particular grabbed my attention for its rare candor. I don’t think Henderson consulted any of the things I’ve previously said about due diligence and liquidity risk, but some of his questions may as well have been lifted directly from some of my thoughts on these themes, most recently here and here.

Since I can’t find any transcription of the interview anywhere, I thought I’d transcribe the salient points directly since this is definitely something I’ll be referring back to: Continue reading

Leopard Capital discusses Frontier Markets as a safe haven

This is a five minute segment, I can’t find a transcript of it anywhere, and since I have little faith in the permanence of this video’s availability, I thought I would take a few minutes to do a quick transcription. Leopard Capital’s Doug Clayton, whom we last heard from here, went on CNBC Asia last Thursday to discuss frontier markets. Much like CNN, CNBC’s level of sophistication I find to be nothing less than infantile within the US context, but fortunately its foreign bureaus seem to appreciate the importance of a quality conversation and this interview is no exception.

As for Clayton, he opens with the claim that frontier markets are “high growth, low risk”, which I personally find slightly misleading, but other than that minor point, he has some interesting things to say here:

Martin Soong: As China’s and India’s economies show signs of slowing, is it time to turn attention to other markets in Asia for opportunity? Doug Clayton is managing partner at Leopard Capital, he joins our guesthouse with Slim Feriani of Advanced Emerging Capital. Doug, good to see you, welcome back and we talked about a month or so ago, when you were up in Hong Kong. Have your views changed at all on frontier markets?
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Frontier Markets Due Diligence, Round Two

With all due respect to Wells Fargo, hearing they’re looking into Frontier Markets investing is sort of like hearing J.C. Penney and Marks & Spencer are looking into selling guayaberas and sarongs (unless JCP and Marksies have entered Quezon City? Anyone?). Stereotypes aside, after watching Fox Business interview Wells Fargo Private Bank CIO Ron Florance and then reading about WF’s latest Southeast Asia due diligence trip, it looks like they’re serious. Fox Business, on the other hand, either insists on talking down to its viewers, or just assumes we’re all as goo-goo eyed about this as they are, but whatever, let’s have the clip done with so we can move on to the substance of what’s happening here:

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Cambodia Plans for More Convertible Riel

Those familiar with Cambodia know that despite having its own currency, it is an effectively dollarized economy. What I did not know is the extent of the dollarization. According to the IMF, “dollars make up about 80% of Cambodia’s money supply, up from less than 70% a decade ago.”

For a country that has a sovereign currency that’s a pretty high percentage. The problems with such high levels of dollarization (or the closely related currency peg) are by now well-documented and have been on prominent display in the past in a range of countries around the world, mostly owing to having to submit to another nation’s monetary policy. What makes Cambodia different:
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