November 3, 2011

Private firms plan CSX IPOs


First private-sector companies show interest

A logistics firm and two garment manufacturers planned to list on the Cambodia Secur-ities Exchange during the second half of 2012, underwriter Phnom Penh Securities said yesterday.

The companies are the first known private businesses to confirm their intentions of listing on the Kingdom’s still-dormant bourse.

Manufacturing companies Grand International Ltd and TY Fashion Co Ltd signed initial-public-offering preparation contracts in June and July, respectively, Phnom Penh Secur-ities CEO Stephen Hsu said.

Olair Dry Port Worldwide Co Ltd, a logistics firm, had reached an underwriting deal in mid-July, he said.

The plans – among several rumoured private listings – were a welcome signal from the private sector, as so far only the state-owned firms Phnom Penh Water Authority, Sihanoukville Autonomous Port and Telecom Cambodia were expected to hold offerings, Hsu said.

“The listing of these private companies will add to the vitality and liquidity of the market,” he said, adding that Phnom Penh Securities submitted letters of intention to the Securities and Exchange Commission of Cambodia in mid-August.

The prospect of an incerease in public listings on the CSX represented a maturing Cambodian market, SECC deputy director-general Huot Pum said yesterday.

“It’s good news for us, because it proves that our people are aware of the new market and [it shows] we will have more liquidity,” he said.

“Whenever we get more private companies listed, it means that our market is improving.”

Phnom Penh Securities’ Hsu said at least 10 other private companies, including banks, transportation and insurance companies and garment manufacturers, had signed underwriting contracts or were in negotiations with his company. Subsequent letters of intent would be submitted when they were ready, he said.

“I predict about 10 companies will be listed on the CSX by end of 2012, five of which will be [underwritten by] Phnom Penh Securities. This will bring not only liquidity but also ensure the confidence of investors,” Hsu said. Phnom Penh Securities does not appear to be alone in advising clients on holdings IPOs.

Tong Yang Securities managing director Han Kyung-tae, underwriter for Phnom Penh Water Authority and Telecom Cambodia, claimed during a conference in October that his firm was in talks with some private companies about listing.

The bourse officially opened on July 11, but trading was delayed until the end of the year because the three state-owned enterprises that planned to list were not ready. Technical difficulties also accounted for the delay.

In October, Minister of Economy and Finance Keat Chhon announced listing would be further delayed until next year, saying also that Phnom Penh Autonomous Port was preparing for an IPO as well.

The delay should allow securities firms and potential IPO candidates enough time to get ready for the market and enable the governing body to improve and develop rules and regulations to ensure smoothness of the market operation and public confidence, Hsu said.

Grand International Ltd, TY Fashion Co Ltd and Olair Dry Port Worldwide Co Ltd declined to comment for this article.

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