Shelter from the Storm

Cambodia’s gaming market has great investor potential—provided corporate governance continues to improve.

“Let us rise up and be thankful, for if we didn't learn a lot today, at least we learned a little, and if we didn't learn a little, at least we didn't get sick, and if we got sick, at least we didn't die; so, let us all be thankful.” Lord Buddha

Events are moving very fast in the global economic crisis. In those circumstances, predictions on prospects for the Asian gaming industry issued only weeks or even days ago can start to look like very old news indeed.

The height of a crisis may not seem the most auspicious time to be talking about gaming infrastructure investment in an emerging market such as Cambodia, or indeed gaming investment full stop.

The reality is, however, that despite the roller coaster ride experienced in the financial markets from New York to London, and from Hong Kong to Shanghai and beyond, life goes on. As all market players know, financial dips actually tend to offer rare opportunities to buy assets at rock bottom prices.

Bargains galore

This may be particularly appealing if the assets are in a dollarised economy such as Cambodia, and the purchaser is from an economy such as China or Europe where the currency is not directly pegged to a weakening US dollar.

Cambodia has often been ruled out by foreign investors as having too many question marks surrounding corporate governance and corruption. Change is in the air though, led by the good example of the gaming operator NagaCorp, the first Cambodian company of any kind to list on an internationally-respected stock exchange, namely Hong Kong’s.

New rules

Cambodia’s newly re-elected government promised in mid-September that it would pass laws to formally regulate the casino sector. Challenges nonetheless remain. The issue for Cambodia may be not so much the passing of regulation but the effective and transparent enforcement of it. But the success of NagaCorp is a striking example of how things can change and what can be achieved if the desire for change is strong enough.

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