July 12, 2011

Let’s get the ball rolling


The trading room at the Cambodia Securities Exchange
Minister of Finance Keat Chhon yesterday marked the official opening of the Cambodia Securities Exchange by urging three state-owned enterprises to move faster with their public offerings.

The CSX project has already suffered a series of delays, having begun  back  in 2007.

And although the exchange is now open for business, stock trading is not expected until the end of this year.

Keat Chhon called on the three state-owned companies – Telecom Cambodia, Phnom Penh Water Supply and Sihanoukville Deep Sea Port – to meet that deadline.

“The inauguration today signals the readiness of the securities market for trading, which is planned for the end of this year if the companies can issue securities as planned,” he said, speaking at Canadia Tower, the new home of the CSX.

Once companies were listed, corporate governance, business management and transparency to improve, Keat Chhon said.

Executives from two of the companies yesterday reaffirmed their commitment to list on time, but the third, Phnom Penh Water Supply, was unclear about its ability to do so.

“I don’t think we will face any problems. We just need to change our accounting system from a national auditing firm to an international one to comply with Securities and Exchange Commission for Cambodia requirements,” Telecom Cambodia director-general Lao Sareoun said.

“I expect we will need about four to five months to complete our work for trading, and we now have more clients from Japan interested in our business plans.”

Officials at Sihanouk Port also confirmed their intention to meet the trading deadline.

“We will try our best to complete preparations before the end of the year,” director-general Lou Kim Chhun said.

He added that Sihanouk Port would begin holding meetings with its chosen underwriter, ISP Phnom Penh Securities, on July 14.

The other public company set to list, Phnom Penh Water Supply, however, failed to clarify whether it would be ready in time.

“At present, I don’t know if we will be ready. Why ask me?” director-general Ek Sonn Chan said.

Although Cambodia now had a stock exchange where companies can raise funds, Phnom Penh Water Supply still had work to do before it met the government’s requirements for a public company, he said.

“We should not sell a tiger’s skin before killing the tiger.”

Ek Sonn Chan was unable to say exactly how large an  amount of funds would be required for expansion, as the company was looking at a variety of projects.

The next step for the CSX is the task of attracting private companies within Cambodia and foreign investors.

Although it is unusual for a market to open without any trading transact-ions, economists in the Kingdom are confident the CSX will succeed.

“It is a little regretful that the initial public offering process of three state-owned enterprises cannot be completed in time for the opening of the CSX,” Hiroshi Suzuki, chief economist at the Business Research Institute of Cambodia, said.

He noted, however, that the same situation had occurred at the launch of the Laos Stock Exchange.

“I hope to see private companies join the CSX as soon as possible, as well as the SOEs,” he said.


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