Cambodia - a relative winner amidst Thai clashes & US tariffs

Below we reproduce the third of our write ups from recent due diligence trip to Phnom Penh (PP). This issue concerns the politics facing the country, including Cambodia's border conflict with Thailand, as well as the threat of US tariffs at large.

We spent some good time researching these aspects and are happy to report that the bill of health is significantly better than we had feared, and what you may have expected, as well...

Border clash and trade - Cambodia on the upper hand

Whilst a lot of ink has been spilt on the negative impact of the border clashes, such as:

Article 2: ...conflict is projected to significantly impact Cambodia’s GDP and Thailand’s economy in the short term

Article 3: trade dropped sharply in August 2025, with imports down 29.1% ...and exports down 36.2% ...though Cambodia’s overall trade grew 15.5% to $42.15 billion, driven by markets like the US and Vietnam

In fact, the conclusion is already given in the headline of article 3 above - the important marginal development is Cambodia's enlarging pie with the rest of the world, rather than how it is shrinking with an ageing neighbour...

Cambodia net trade as % of GDP

What is more, Thailand has a massive trade surplus with Cambodia, worth 6% of Cambodia's GDP (red line above), meaning the need to reconcile is much stronger for Thailand than for Cambodia; however, a meaningful amount of this trade may be input components for Cambodia's further export processing.

Growth elsewhere may offset much of the loss?

In fact, looking at some sectors of the economy, you can detect significant increase in activities with other partners (article 4) , and especially so with China (article 5):

Article 4: The Royal Group Phnom Penh Special Economic Zone (PPSEZ) ...attracting new investments from China and Japan and employing over 55,000 workers.

Article 5: ...China bilateral trade reached a record $14.2 billion in the first nine months of 2025, up 27% from the previous year

The China element highlights the geopolitical trend we have been citing as a strong tailwind for Cambodia's industrialisation - the re-shoring of PRC manufacturing capacity to SEA!

As more migrant labourers return home, the momentum for capacity growth domestically also receive a major boost, where new factories will no longer have to compete with other nations for home grown workers working abroad:

Article 1: Border clashes forced 910,000 Cambodian migrant workers to return from Thailand

The flipside of this development is a loss of foreign remittances back home, which hopefully will be short term, and as these migrant workers are absorbed into new industrial zones, a lot of the lost wealth pre-remittance will now be kept in the borders of Cambodia:

Inflow remittances (%GDP)

Tariff - best of the lot!

The super proactivity in trade negotiations, even to the point of nominating President Trump for the Nobel Peace prize, suggests how hands-on the Cambodia administration is, compared to sleepier neighbours, amply illustrated by its lowest new US tariffs compared to other Asian competitors:

As a result, the latest forecast upgraded post-border clashes still sees Cambodia GPD to grow 5% before bouncing back to the 6% handle:

latest GDP forecast (Aug 2025, see here)

Senior ministers: young and highly educated

Most people may associate Cambodia with patriarchal sedantry, but a look beneath the hood reveals that the country is ruled by highly educated, young technocrats - below is the full list of cabinet ministers with their age and education:

Noteworthy is how the average age being only 55 years old, with 60% of the ministers younger than 60. Meanwhile 57% of the ministers have university degrees, from Harvard to NUS, from MIT to Wharton! The PM, Hun Manet, is even a West Point graduate...

Shouldn't these credentials give investors far more confidence investing in Cambodia than Thailand or Vietnam or Malaysia - the current top go-to destinations of investor property buying money?

======================Article 1===================

Thailand Turns to Sri Lanka to Plug Labour Gap After Cambodian Exodus

Yatt Malai                                    Published on: Thu, 21 Aug 2025

The recent border clash forced about 910,000 Cambodian migrant workers to return home, leaving Thailand facing a labour shortage that it is filling by hiring from countries including Sri Lanka, while Cambodia pledges to reintegrate returnees into its own economy despite concerns about limited job opportunities

[...]

https://kiripost.com/stories/thailand-turns-to-sri-lanka-to-plug-labour-gap-after-cambodian-exodus

======================Article 2===================

Mekong Strategic Capital Warns Thai Border Conflict Risks Significant Short-Term Impact to Cambodia’s GDP, but Long-Term Outlook Strong

Aug 14

Cambodia’s Growth Outlook Adjusted Downward Amid Border Conflict

Mekong Strategic Capital’s latest forecast anticipates Cambodia’s GDP growth slowing to around 3% in 2025, down from an earlier expectation of around 5%. This revision reflects the multifaceted economic fallout from the conflict, which escalated rapidly to become the region’s most significant economic risk.

[...]

https://cambodiainvestmentreview.com/2025/08/14/mekong-strategic-capital-warns-thai-border-conflict-risks-significant-short-term-impact-to-cambodias-gdp-but-long-term-outlook-strong/

======================Article 3===================

Cambodia–Thailand Trade Weakens Sharply Amid Border Tensions

Gerik                                                                                       Sep 14

Decline In Cambodia’s Imports From Thailand Signals Strained Trade Ties

According to the General Department of Customs and Excise (GDCE) of Cambodia, the total value of Cambodian imports from Thailand in August 2025 fell sharply to approximately $213 million, representing a year-on-year contraction of 29.1% from the $301 million recorded in August 2024. Cambodian exports to Thailand also dropped significantly by 36.2% to only $46 million in the same month, underscoring the mutual impact of deteriorating trade conditions between the two neighboring countries.

[...]

https://www.fastbull.com/news-detail/cambodiathailand-trade-weakens-sharply-amid-border-tensions-4343675_0

======================Article 4===================

Exports to Exceed $2B in 2025, No Significant Impact from US, Thailand, Says Royal Group SEZ

Oct 13                                                      Sangeetha Amarthalingam

By the end of 2025, the export value of goods from companies operating within the public-listed Royal Group Phnom Penh Special Economic Zone (PPSEZ) is likely to be over $2 billion, with no significant drop registered so far despite trade issues with the US and Thailand.

[...]

https://kiripost.com/stories/exports-exceed-2b-2025-no-significant-impact-from-us-thailand​

​======================Article 5===================

Cambodia-China trade hits record $14 billion, up 27%

Oct 14 Sum Manet / Khmer Times

Bilateral trade between Cambodia and China exceeded $14.2 billion in the first nine months of 2025, marking a robust 27% increase compared to the same period last year, according to the latest figures from the General Department of Customs and Excise (GDCE).

[...]

https://www.khmertimeskh.com/501772308/cambodia-china-trade-hits-record-14-billion-up-27/

Should HKEX extend trading hours to stay competitive?

Trading US stocks have long been a popular investment avenue for Hong Kong individual punters, and when one says “I’m staying up late tonight” one is often greeted by “To trade the market?”, Obviously the exchange operators in the US are eyeing the potential of tapping the increasingly affluent Asian investors in their own time zones, with the New York Stock Exchange (NYSE) reported to be looking into extending its trading hours (see here), with only 2 hours of rest between sessions (bottom bar below):

Figure 1: NYSE and LSE proposals to extend their trading hours

Not to be outdone by their peers across the pond, the London Stock Exchange (LSE) is now also reported (see here) to be studying how they could extend their offering – to an even more ambitious round-the-clock service (second bar above)!

Global markets call for 24-hour availability?

With stock investing going global in the age of easy data feeds and online trading platforms, the need to be able to access your target markets can only rise. Let us look at the current set up across major exchanges in each time zone:

Figure 2: trading hour distribution of major stock exchanges around the globe

Asians – mostly localised services

Represented by the red areas above, it is clear that most Asian stock markets cater only to their local investors, with all of opening after 9am and closing by 5pm local time. What is more, they are the only markets with long lunch breaks (up to 2 hours, yellow area above).

There is also a convenient trading overlap with major European exchanges except Australia Stock Exchange (ASX) and Tokyo Stock Exchange (JPX) which start earlier than the rest of the pack.

Europeans – geographically lucky to straddle

In the EMEA (Europe, Middle East, Africa) time zone (represented by green areas) the most diligent are the Germans, with Frankfurt Stock Exchange (FRA) boasting the longest trading hours and basically out-trades every competitor in its region; what is more, its trading hours also completely envelope the US major bourses too! This is followed by Dubai Exchange (DFM), which despite being 4 hours ahead of London, tries to grab business by starting an hour ahead of the London Stock Exchange (LSE) and closes one hour afterwards.

The favourable location of Europe allows these exchanges to overlap with Asian exchange at the start of the day and then again segue into the American exchanges before they shut up shop, thus serving a crucial bridging function in providing market continuity over the day.

Now that we have a basic understanding of the trading hour distributions, it is not hard to see why LSE is proposing – to extend its own time advantage to cover the entire world (light green area)!

Americans – biggest need to extend trading hours

Given how overwhelmingly dominant the US stock markets are – the two US exchanges are home to $49trn worth of market capitalisation, more than all the other above exchanges combined at only $45trn, and value traded totalling $50trn compared to $48trn for the rest (above all 2023 figures) – there is probably far greater practical benefit to extending the US trading hours.

What do the numbers say about lengthening trading hours?

In theory, the longer the trading session, the higher should an exchange’s volume-to-market-cap ratio be. Below is a plot of all exchanges in our study:

Chart 1: Vol / Mkt Cap vs Hours Traded

There does not seem to be any correlation at all it seems:

a)     the two biggies (NYSE + NASDAQ, marked by a horizontal blue line) top the volume/market cap metric amongst all open capital account markets, despite their shorter trading hours;

b)     the two Chinese exchanges Shenzhen Stock Exchange (SZSE) and Shanghai Stock Exchange (SSE) have disproportionately high volume relative to their listed market caps, all while having the shortest trading hours!

Besides capital controls (which trap liquidity), we also suspect that lack of investment alternatives and high retail participation are the drivers of such high trading velocity for the Chinese exchanges:

 

Chart 2: Vol / Mkt Cap vs Retail Participation

The chart above seems to prove our suspicion – with significantly higher retail stock investing (in the 80%s), the PRC exchanges corroborate the trend line of higher retail = higher volume/market cap.

If we take out the PRC exchanges, then we get a tighter new pattern (Chart 3), where 5 to 7 hours seem to be the norm for most jurisdictions, with a large volume/market cap spread between the high teens through to over 100%:

Chart 3: Vol / Mkt Cap vs Hours Traded (Excluding SSE & SZSE)

One big disappointment is that of LSE, which despite having longer trading hours, features badly in its trading efficiency. This suggests that there are other structural issues at play – could it be low valuations which put off potential listing candidates, or is it over-enthusiastic regulation making life difficult for existing candidates? After all, what this also points to is the fact that stock exchanges are in a global competitive race for members, and extending trading hours is but one of many factors that will make or break an exchange’s future prospects.

 

Hong Kong – extend and upgrade

What does all of these leave HK? We can discern a number of actions that will help the city:

a)     as always deregulation and limiting the over-protective interference of the SFC will definitely attract more listings and trading volume;

b)    policy help from mainland China certainly helps – including all the redomiciling of PRC listcos to HK given heightened geopolitical risks, a trend we see continuing for a number of years ahead;

c)     and of course, longer trading hours, including even scrapping the lunch break - this is now almost unavoidable given the biggest to competitors are both studying similar strategies, HK should not be left behind.

 

All of these measures will help prepare for the day when HKEX’s stature approaches that of the American exchanges, when overseas traders would appreciate the convenience of trading HK stocks any time they want, and not having to get out of bed in the middle of the night to do.

 

The author would like to thank Tang Kwan Po Aaron from The Chinese University of Hong Kong majoring in System Engineering and Engineering Management for assisting in data collection and analysis of this article.

【要葳唔好戴頭盔】全球債市極度危險，未爆煲只係時機未到？港樓幾時終極一跌？20250912

載於2025年9月12日 【MTF Channel 要葳唔好戴頭盔】 

主題:

》全球債市極度危險，未爆煲只係時機未到？

》港樓幾時終極一跌？

》3大投資部署不可不做！

訪問來源：【MTF CHANNEL】

https://www.youtube.com/@mingtakfn

特此鳴謝

主持: 葳葳

攝影，剪接及製作: MTF CHANNEL團隊

節目連結

讀張維迎專訪有感：干預經濟屬「致命的自負」20250902

近日閒來閱讀，碰上一篇值得推薦的文章，視頻如下，亦附全文於尾：

   

北大張維迎﹕干預經濟屬「致命的自負」｜信報月刊專訪 

近年本港越見奉行大政府經濟政策，正是張公所批評的行政干預思維。此一現象在當今經濟疲弱之勢下，尤為顯著，當就業人口在2019移民潮開始後大幅下挫，再遇北上消費，通關後外遊等因素，令本港就業境況「見波幅，無升幅」已達四年之期： 

 

在此緊縮環境下，卻見公營部門編制屢創新高（見【橙線】），直追本港經濟最高增值板塊（金融是也；同時可見金融線亦在漸行漸低，勢頭不妙，見【紅線】）：

再以絕對值比較，原來公共行政／社會服務類別搖搖領先於2019-2025年間之增幅榜，大幅抽高4.1%；在人口和就業人數皆下跌的環境下，是否有些膨脹的感覺？儘管公務員編制微降1.4%，但相對於整體就業人口下跌6.7%的大局下，於滿街吉舖的今天（零售／飲食業人手在同時間大縮22%之巨！），似乎政府仍然瘦身未竟，須要更加努力：

 行文至此，再翻出數篇以前拙作，皆與下文理念相近，以饗讀者： 

房策萬箭齊發 樓市無所適從？

香港的士：僵化思維下之畸形生態

最低時薪要克制　經濟自由靠競爭

宇論舊文重溫：隧道補貼分流 不如乾脆免收 

張教授現為北京大學博雅特聘教授兼國家發展研究院經濟學資深教授，因其倡導自由市場及企業家精神的開創性研究而聞名。

------------------訪問原文--------------------

 2025年7月3日  

【信報月刊】干預經濟屬「致命的自負」—— 北大教授張維迎：相信企業家和市場自有出路 

 【本刊記者李俊杰】回顧歷史，人類的狂妄與自負往往帶來災難。40多年的研究讓著名經濟學家張維迎堅信，處理宏觀經濟，唯有收起致命的自負，讓企業家在市場當中試錯與成長，才能切實帶來社會創辦與進步，讓哪怕是普通百姓都能受惠，這也是他為當今中國經濟開出的藥方。今年6月初，張維迎親臨香港恒生大學接受榮譽博士學位，記者藉此機會跟他進行了一場關於中國經濟前景的訪談。

北京大學教授張維迎是中國經濟學界的市場派領軍人物，多年來著作甚豐，以思考邏輯綿密、言談豪氣干雲見稱，名場面不勝枚舉。

2016年在北京大學朗潤園跟主張政府強力介入市場的「經濟國師」林毅夫教授激辯；2017年於北京大學國家發展研究院畢業禮以《自由是一種責任》為題致詞演講；疫情期間的公開演講，也一針見血地指出企業家信心不足緣於體制及法治，全都讓人印象深刻。

市場經濟、自由、法治、企業家精神──這是他1984年在中國經濟學界嶄露頭角以來，一直主張而且捍衞的核心思想。不論是當年改革開放大潮流，還是現時國進民退苗頭漸現，這位奧地利學派經濟學家始終忠於自我認知及思考。
「無論你是官員還是科學家，也不論你有多聰明，知識都非常有限。你不要那麼狂妄，不要覺得自己無所不知。我們很渺小，所以才要市場，讓大家選擇。」時刻保持自省自覺的張維迎觀察到，過去十餘年，一種跟承認無知截然相反的自負在中國強化得比較厲害，「特別是我們加入世貿後，取得巨大經濟進步，財富增加許多，很多人回答『我們為什麼發展得這麼快？』時，傾向歸因於中國的特殊性，例如，政府較多控制經濟等等。」

致命的自負

「尤其受過一定程度教育的人，總覺得自己全盤理解社會運作，以為最優決策是一道數學公式，有標準答案，可以計算出來，『按照我的方式去做，社會就會變好』，但真實世界不是這樣的。」

張維迎借用奧地利學派宗師海耶克（Friedrich Hayek）的作品名稱《致命的自負（The Fatal Conceit）》來形容這種心態，「計劃經濟本身就是致命的自負」。他以曾被他形容為「穿着馬甲的計劃經濟」的產業政策來解釋：「產業政策利用國家政策和資金，扶持特定行業發展，當中意味着，一些人能夠看準未來要怎麼做。」

「產業政策所表現出來的集中化（投資）像中國人押寶一樣。賭注放在同一點，風險很大。近年最典型的是就是電動車和光伏產業，兩者現時均有巨大產能過剩，這很大程度是政府的政策造成。」

訪問來源：【信報月刊】

 

China - Has Home Price Bottomed Yet?

China has been on a long property cycle correction; although not the longest fall compared to the 97-03 cycle, it certainly feels like the deepest drop experienced - down 39% from the 2021 peak in Shenzhen for example:

The drop has triggered a lot of support measures in recent months, ranging from policy relaxations to rate cuts. Whilst prices are now back to 2015 levels (red line above), price-to-income ratios have seen even deeper correction - the price-to-disposable income ratio (green line above) is now back to 2007 levels, a full 18-year roundtrip! The less relevant price-to-per-capita-GDP measure has returned to 2015, similar to the price index correction (blue line).

If we looked further back to the Asian Crisis period, the drop in price-income ratios has taken us to even the 1999-2001 period. So are we near a bottom yet?

Cycle bottom near, but not there yet

The market has recently shown some signs of recovery, as the first shoots of rebound has appeared in price statistics - the latest monthly YoY numbers has registered one recovery (green bar below), after the longest period of all cities reporting drops (red bars) continuously since 2024:

Shenzhen price moves (red line above) has always been a lead indicator of national trends - each time the line turns up, the number of cities reporting price rises increase. This time however, the SZ line has not made a reversal yet, suggesting perhaps the odd city rising in the latest monthly stats is but 'counter-trend rallies' rather than trend changes...

This assessment is corroborated by stock analysts out there too, see article 1 for details. The still negative outlook is justified given still very strong global headwinds in both trade wars (article 3) and proxy hot wars, which can both flare up further. On the micro side, the inventory glut remains in need of digesting:

for more charts see here​

Both geopolitics and weak retail appetite has been weighing on China's business sentiment, which has stayed in contracting territory in Q2, following a longer period of drops for most of 2023-24:

As a result, both consumer (blue line below) and producer prices stayed neutral (at best) to negative:

The saving grace has been the aggressive rate cuts carried out by the PBoC, taking funding costs to levels significantly below HK/US levels now:

However, the pressure from rate arb is now mounting, especially when most Western nations are seeing their long bonds crash driving up rates. We don't expect this trend to end any time soon, and as a result, China's near record discount vs TBs could be due for mean reversion:

What is the bullish case?

For Shenzhen specifically, the strong momentum of Hongkongers consuming up north seem to be providing some support (article 2), and as the porosity of the SZ-HK border continue to increase, price equalisation could have some further legs to run, benefiting the prices there (more than most other cities).

The rate cuts and increasing rental yields are also tilting fundamentals in favour of owning for end users, and buying for investors. The negative yield gap (currently around 2%, see blue lines below) for home owners however could recover more before buying demand returns in numbers:

As a result, we expect likely another 100-200bps of narrowing - either from rental growth or further rate cuts - before prices begin recovering meaningfully. The timing seems to be more likely 2027 on current trajectories from the chart above.

=====================Article 1====================

Goldman Sachs Says China Home Prices May Drop 10% Before 2027 Market Bottom

2025/06/26 | Iris Hong

China’s property slump could extend into 2027 with a further 10 percent decline in home prices, as policymakers remain cautious about easing measures, according to a Goldman Sachs report released on Wednesday.

[…]

https://www.mingtiandi.com/real-estate/research-policy/goldman-sachs-says-china-home-prices-may-drop-another-10/​

​

=====================Article 2====================

Benefits of Shenzhen/Hong Kong tourism mainly flow one way

2025/06/12

[…]

While Hong Kong tourists travel north to take advantage of cheaper hotels and restaurants, Mainland tourists arriving from Shenzhen are more inclined to take short trips and focus on sightseeing rather than shopping and restaurants. Shenzhen has now overtaken Macau as the most popular weekend destination for Hong Kong residents.

[…]

​https://www.savills.com/prospects/cities-benefits-of-shenzhen-hong-kong-tourism-mainly-flow-one-way.html​

=====================Article 3====================

Trump Says He'll Set 50 Percent Tariff on Copper

2025/07/08

[…]

“Today, we’re doing copper,” Trump said at a July 8 Cabinet meeting in front of reporters. “I believe the tariff on copper, we’re going to make it 50 percent.”

[…]

​https://www.theepochtimes.com/business/trump-to-impose-50-percent-tariff-on-copper-5884328