[PHNOM PENH POST]
THE Cambodian Securities Exchange officially launches today after years
of planning and delays, though insiders said yesterday stock trading
isn’t expected until the end of the year.
However, government
officials, investors and academics applauded the launch, saying it would
advance transparency in the country and offer a new path for economic
growth.
The bourse was a joint venture between the Cambodian
government and the Korea Exchange, which hold 55 percent and 45 percent
of the CSX, respectively. The two sides have been working on the project
since 2007.
Hwang DBS Commercial Bank country head Han Peng Kwang touted the exchange’s potential for both domestic firms and investors.
“It
is good for local companies because now they can issue stocks as a way
of raising funds to expand their business. It is cheaper than taking a
loan from a bank,” he said.
“And local investors will have other
investment alternatives, as they normally buy property or put their
money in the bank,” he added.
Han Peng Kwang also noted that the
banking industry and stock exchange usually work together “in order to
push up the overall capital market of the country”.
At the same
time, Asia Cambodia Law Firm President Seng Vuoch Hun said the CSX could
catalyse much-needed standards of accounting in Cambodia.
“It
will be a driving force to build transparency and proper financial
reporting. It will especially urge companies to pay taxes and respect
the law,” she said. She also cautioned about protecting new investors,
as the idea of an exchange is new to the country.
“Regular
investors will feel the most impact if the market doesn’t operate
properly or regulations are not clearly implemented. The government
should think about their safety,” she said.
Panasastra University
finance lecturer Sam Visoth shared those sentiments, warning about
potential downside of a strong regulatory framework not being in place.
“If it is not seriously carried out, there will big dangers to investors, mostly small investors,” he said.
Nguon
Sokha, director general and spokeswoman at National Bank of Cambodia,
admitted the government still has some work to do to strengthen the
country’s securities industry. However, she hoped experienced market
players would help ease the transition.
“I do hope the market
will operate smoothly thanks to the new securities firms, which have
years of experience in other countries. They will bring their skills and
experience to develop the new industry in our country,” she said.
The
Securities and Exchange Commission of Cambodia so far has licensed 15
private companies to serve as underwriters, dealers, brokers and
financial advisors for the CSX.
Some of the companies are
subsidiaries of larger firms operating in more developed markets such as
Japan and South Korea. SECC Director General Ming Bankosal told
reporters last week that three state-owned companies will issue shares
on the bourse when trading eventually begins: Telecom Cambodia and Phnom
Penh Water Supply.
“I think that it will take until the end of the year before stocks start trading,” he said.
Some private companies and other state-owned companies also have shown an interest in going public, he added.
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