The Mobius Diaries: A postcard from Cambodia.

Templeton's emerging markets guru Dr Mark Mobius was suprised by the investment opportunities he found in Cambodia.

'Cambodia is a big surprise. And it’s not because of Angkor Wat but because of so much more that is happening in this country. It’s not a big country. Compared to its neighbours, its population is only 14 million, while Vietnam’s is 84 million and Thailand has 65 million. Of course, it has more people than Laos’ six million. Of those four adjoining nations, Cambodia has the smallest land area of about 177,000 square kilometers compared to Laos 231,000, Vietnam 325,000 and Thailand 512,000. I always look at these countries together since they share so many cultural and historical characteristics.

'We flew to the capital, Phnom Penh. There we could tell that Cambodia is enjoying an economic boom. Since 2003 the country has been growing at about 9% a year as a result of a spectacular construction boom, increased garment exports and tourism, which now results in almost two million visitors a year. Garment exports rose 17% to over $2.5 billion in 2006 with most of it going to the US. Tourism, mainly because of Angkor, earned the country about $1.4 billion in 2006. The optimism can be felt as we traveled around the country and particularly in Phnom Penh. Our visit to NagaCorp’s, NagaWorld hotel and casino complex in the heart of the city was an eye opener.

'Dr. Tan Sri Chen, who is Chairman of listed companies in Malaysia as well as an economic advisor to the Prime Minister of the Cambodian Government, has created an attractive complex drawing visitors from China, Hong Kong, Singapore, Thailand, Malaysia and other countries in the region. He graciously showed us the entire well run complex as well as his plans for extending the complex. Those plans call for the construction of a spectacular water fountain display in front of the complex as well as many other facilities.

'More and more countries are looking for investment opportunities in Cambodia. For example, Korean companies have already built up a strong market position in the IT sector while Chinese companies are also involved in some mega infrastructure projects.

'Despite the sad history with the Khmer Rouge and the “killing fields” atrocities, the people clearly are in a positive mood and look forward to a better life. Another hopeful sign: oil and gas reserves have been discovered off Cambodia’s coast in the Gulf of Thailand. Of course, a lot needs to be done if the country’s 14 million people are to rise out of a very low standard of living. Wages are low as I learned from the beautifully crafted handicrafts hawked at Angkor Wat at unbelievably low prices. The average wage for most Cambodians is less than $1 per day. This means that the country will continue to have an advantageous position in a number of high labour content industries.

'We left Cambodia knowing the country was moving rapidly towards a more dynamic and influential position in Southeast Asia. The prospects of investing in companies with exposure to Cambodia are good and we continue to look for such opportunities.'