Newly-Appointed Director General of the state-owned Telecom Cambodia (TC) Kim Vikra vowed Monday to enhance the enterprise's governance in order to improve business operations and revenues.
"I am committed to working with all colleagues in order to lead the enterprise to progress,"he said at his official appointment ceremony."I will enhance the... continue
Shares of the state-owned Phnom Penh Water Supply Authority (PPWSA) will trade at 6,300 riel, or $1.57, when the firm launches its initial public offering (IPO) on the Cambodian bourse on April 18, PPWSA announced yesterday.
The price puts the company at the top of the originally proposed range of between $1 and $1.57 per share. …
Enthusiasm about the start of trading at the exchange, which opened last July without a single listed company, extends beyond the borders of the Southeast Asian country. Investors including Templeton Emerging Markets Group Chairman Mark Mobius said they plan to participate in Cambodia’s stock market after state-owned Phnom Penh Water Supply Authority has its initial public offering next month. …
Demand for Phnom Penh Water’s shares is more than 10 times the amount available, according to a person with knowledge of the matter who declined to be named because he wasn’t authorized to speak about the IPO. The company, which plans to raise as much as 82.8 billion riel ($20 million), held a two-week roadshow in the nation’s capital starting Feb. 29 with about 400 potential investors crammed into a conference hall with seating capacity for half that number. …
With two dozen computers in an air-conditioned room on the 25th floor of Phnom Penh’s tallest office building, Cambodia Securities Exchange Co. is a joint venture with Korea Exchange, the operator of the Seoul bourse. …
Cambodia’s first initial public offering is fast approaching, and demand is expected to be robust.
Bookbuilding, the process during which bids are taken and a price set for shares, ended last Wednesday for Phnom Penh Water Supply Authority (PPWSA). The final offering price will be announced before subscriptions begin on March 29, with the listing date set for April 18.
PPWSA intends to issue 13.04 million ordinary shares with a par value of 1,000 riels (7.70 baht or 25 US cents) each. This represents a 15% float. Eleven percent of the float will be allocated to the company’s employee stock option plan.The state, represented by the Ministry of Economy and Finance, will retain 85% ownership or 73.9 million shares.
The shares will be available to both Cambodian citizens (a 20% allotment) and non-Cambodians. Permitting foreign investor participation should dramatically improve the prospects for the IPO as this will be the only publicly traded equity exposure in Cambodia.
CSX chief executive Hong Sok Hour explains how the exchange will function on its first day of trading and into the future.
The way to begin trading on the CSX is to open an account with any one of a dozen securities firms which are licensed by the SECC and are members of the CSX. Traders need to have some money in their brokerage accounts to buy shares, says Hong Sok Hour, CEO of the Cambodia Securities Exchange.
During the process of opening an account, traders will receive an investor ID issued by the SECC.
“Before you start trading, you need to have some money. You also pay brokerage fees for each trade,” Hong says.
For the first stage of trading, the CSX will start with two trading sessions in the morning, the first one running from 8am to 9am.
“At 9am, there will be matching between sell and buy orders, and we will have an opening price. One millisecond after 9am, the second session will begin. Orders that are not executed in the first session will be included for an execution in the second session,” Hong says.
At 11:30, there will be a second matching of buy and sell orders, he says.
Under way now is the “book building” process by the state-owned Phnom Penh Water Supply Authority, which will be the first IPO in Cambodia and the first listing on the CSX. …
Local stock-exchange staff will be trained by foreign experts
Overseas experts will play an important role in the start-up of the Cambodia Securities Exchange (CSX), says Larry Ng of Cana Securities.
“Foreign investors will lead the CSX and securities market at the beginning because they have the expertise and the experience. However, sooner or later, local people and companies will eventually play a major role in this securities market and also cooperate with foreign investors to make this market grow,” Ng says.
“The first group of local Cambodian experts will be born during the CSX start-up period.
“Those people who participate in the opening of the CSX and initial stage of the securities market will be able to take this opportunity and learn from the overseas experts.
“ These Cambodians will become the future backbone of the securities market in Cambodia.”…
Stock market a good choice for long-term investors
Stephen Hsu, a native of Taiwan, runs Phnom Penh Securities, one of a dozen underwriters licensed by the SECC to prepare companies for IPOs on the CSX and to engage as an intermediary with the public for trading on the CSX. Hsu has spent the last 20 years in banking, insurance and securities. He heads a team of 45 employees, six from Taiwan and 39 Cambodians.
• It looks like the choice of Phnom Penh Water Supply Authority (PPWSA) is a good one for the first CSX IPO. Everybody needs a steady water supply and they seem to have sound management and a good infrastructure. Do you agree? Would you recommend investors buy in to PPWSA?
PPSWA is a good company and it has stable business performance. We can predict that there will be stable return by dividend or right. For the investor, if you are long-term investor, and want more interest rate than a bank can give, then this would be a good choice. For the short-term investor, state-owned enterprises generally won’t have big price fluctuations. Stocks will follow the trend of the international markets and currently, due to the debt crisis in Europe, the international stock markets won’t have big fluctuation. We won’t advise our clients to make short-term investments. Moreover, the liquidity risk is part of the equation as well. We suggest making a conservative amount for subscription.
Furthermore, PPSWA transferred 84 per cent of shares to Class A stock, and 16 per cent of shares to common stock in February, 2012. The Class A stock holder can’t vote and also can’t get a dividend. This will lead to an earnings per share (EPS) increase of 6.25 times, but we need to notice that an investor only needs to possess 8 per cent of the original capital, to control the whole company easily.
• How about the trading in Riel on the CSX and the ability to settle in USD? Would you advise your clients just to keep Riel accounts and settle in Riel rather than settling in USD?
It seems like there might be too many exchange rate fees. …
One of the personalities closely associated with the development of the stock exchange in Cambodia, Morten Kvammen, a director at SBI Royal Securities, says the CSX needs more companies to list in order to be successful.
Kvammen, a graduate of the Wharton School of Finance and a former fund manager in the Middle East, makes the case that investors want exposure to any economy that underlies the stock exchange in any market.
“Investors will want to invest to get exposure to the underlying economy. You need companies listed that represent each sector of the economy,” he says.
“We would like to see more companies from the private sector coming to the market in areas such as banking, finance, mobile telecommunications and agriculture, including both plantations and processing like rice millers.”…
One of the men deeply involved in the development of Cambodia’s financial system, Dr Ghanty Sam, of the Financial Institute of Cambodia, who is also a board member of the Securities and Exchange Commission of Cambodia, says people should be aware of the downside of investing in any stock exchange, as well as the upside.
When people say they play the stock market, they imply that it’s a game, like gambling at a casino, Ghanty Sam says.
“In gambling, you don’t have the probability you are going to win. The probability is shaky. You are subject to the law of gambling. In investing, you know the probability of winning or losing because you have the information available to make the right decisions,” he says.
“Information is what makes investing different from gambling. Our whole training at the Financial Institute of Cambodia is to teach them how to use the information.”…
The executive director at the Financial Institute of Cambodia (FIC) says 726 students have completed courses so far at FIC since it opened in early 2011. Tith Seyla, who earned his bachelor’s degree from the Royal University of Law and Economics followed by a master’s degree in economics and management from Lyon 2 University in France, joined the FIC more than four months ago.
The institute is located just opposite Boeung Trabek High School, at the southern end of Monivong Boulevard.
The FIC recently conducted an “approved persons” examination on behalf of the Securities and Exchange Commission of Cambodia (SECC) that included nearly all of the CEO-level stock exchange brokers and underwriters.
When it was established in 2011, the FIC signed a memorandum of understanding with the SECC about the securities market training including the legal framework. …
On the post office square, a beautiful Art Deco building now houses the restaurant Van, an insurance company and the offices of the AFD (French Development Agency). An inquiring mind will not fail to notice on the gates the presence of little medallions with the initials CBI, which refer to the Bank of Indochina.
This reminds us that among the various changes instituted by the French protectorate regime (1863- 1953) was the creation of the first currency in Cambodia : the piastre.
Jean Daniel Gardère provides a brilliant account of this in his book about currency and national sovereignty. According to him, what is essential to understand in Cambodia is the impressive number of missed appointments between national sovereignty and one of its essential attributes: currency. …
The laws and regulations that govern Cambodia’s securities market were derived from the Objectives and Principles of the International Organization for Securities Commissions (IOSCO) and the best practices in the region, according to Dr. Ming Bankosal, Director General of the SECC.
… the SECC which is the regulatory body that governs the Cambodia Securities Exchange (CSX) has been established and licenses the securities firms to operate as underwriters, dealers, brokers and investment advisors that act as intermediaries with the public to carry out buy and sell orders for stock transactions. The SECC was established in 2008. …
The SECC is governed, in turn, by a Commission chaired by the Deputy Prime Minister Keat Chhon, Minister of Economy and Finance and includes representatives from the Ministry of Economy and Finance Dr. Aun Porn Moniroth, the National Bank of Cambodia, the Council of Ministers, the Ministry of Commerce, the Ministry of Justice, the Director General of The SECC and two private sector representatives, Dr. Ghanty Sam and Dr. Sam Sok Khon. According to the law “The Minister of Economy and Finance is automatically the chairman and the members have a five-year mandate,” Dr. Bankosal said. …
… The Cambodia Securities Exchange (CSX) is an important component of a larger ecosystem of capital markets, according to Eugene Lam, CEO of OSK Indochina Securities Ltd, one of Cambodia’s securities underwriters approved by the Securities and Exchange Commission of Cambodia (SECC).
… Lam says one of the upsides to listing your company on the CSX with an IPO is that you’ll get a better credit profile with banks and suppliers and a better image dealing with customers, especially those from overseas. “You could tell your suppliers that your company is publicly listed on a stock exchange.
“This implies that corporate information regarding your company is publicly available, which may help foreign suppliers do a simple background or credit assessment of your company before they agree to start doing business with you.
It began in November of 2006 with a memorandum of understanding (MOU) between the Ministry of Economy and Finance (MEF) and the Korean Exchange (KRX) titled “The Development of the Securities Market of Cambodia.”
A further MOU between the parties in January, 2008 established the Cambodia Securities Exchange (CSX), of which the MEF owns 55 per cent and the KRX own 45 per cent.
On July 11, 2011, the CSX was inaugurated, however without any listed equities to trade. The launch of Cambodia’s equity market finally came to fruition Februry 29 with the commencement of book-building by sole underwriter, book runner and lead manager Tongyang Securities (Cambodia) for the primary offering of Phnom Penh Water Supply Authority, the first initial public offering in Cambodia.
An IPO is the first sale and issue of a company’s shares to investors on a public exchange. A company may require equity to expand, develop new products, purchase buildings or equipment, to acquire another company or simply for working capital. There are generally two methods to raise capital, through debt financing or equity financing. ….
The head of the underwriting team that will launch Cambodia’s first IPO April 18 is Han Kyung Tae, Managing Director of Tongyang Securities (Cambodia) PLC and a South Korean stock market specialist. …
Tongyang Securities (Cambodia) Ltd. is the Cambodian subsidiary of Tongyang Group, a South Korean Conglomerate in financial services, information technology and manufacturing.
…in December of 2006, the Korea Stock Exchange and the Ministry of Economy and Finance signed a Memorandum of Understanding, and that’s when Tongyang began to focus on stock exchange projects. Han’s team became exclusive financial advisor to the Ministry of Economy and Finance.
“We started working with MEF and advised them that the first group of companies listed in the new stock exchanges were always the best state-run companies. Then the government finally chose Phnom Penh Water Supply Authority and two other SOEs, Cambodia Telecom and Sihanoukville Port. …
The Kingdom’s first initial public offering is fast approaching, and demand is expected to be robust.
Book-building, the process during which bids for the IPO are taken and a price is set for shares, ended yesterday. The final offering price is expected before the subscription for the IPO begins March 29, with the listing date set for April 18.
PPPWSA shares will be available to both Cambodian citizens – a 20 per cent allotment has been provisioned – and non-Cambodian citizens. Permitting foreign investor participation should dramatically improve the prospects for the IPO as this will be the only publicly traded equity exposure in Cambodia.
Only 13 million shares will be floated, and a maximum of 10.4 million shares will be available to foreign investors. …
Just months before stock exchanges in Southeast Asia plan to link up their trading, key players remain divided, with one top bourse official saying the region may be going through a “reality check” on the many hurdles facing further economic integration.
The plan for cross-border trading among the exchanges in the region is part of a grander scheme for some form of economic community within the 10-nation Association of Southeast Asian Nations by 2015. But the initiative has already faced some setbacks, with several exchanges’ decisions to participate in the trading link pending. ….
Through the so-called “Asean Trading Link,” investors will be able to buy and sell shares in any of the participating markets while settling the transactions in their home market. The seven exchanges—including two in Vietnam —are estimated to have a combined market capitalization of roughly $2 trillion, bringing them closer to stock markets in Hong Kong and Shanghai. …
The long awaited first security listing on the Cambodian Securities Exchange became a reality on February 23 with the Security Exchange Commission of Cambodia’s “in principle” approval of Phnom Penh Water Supply Authority’s (PPWSA) “disclosure document for public issuance of equity securities”.
This is effectively a preliminary prospectus that includes information on the company such as its history, operations, management and financials as well as the terms, proceeds use, timetable, and risk factors of the offer.
TongYang Securities (Cambodia) Plc, an overseas affiliate of South Korea’s TongYang Securities Inc, will act as sole underwriter, book runner and lead manager. An initial public offering, also referred to as a primary offering, is first sale of a company’s shares to investors on a public exchange. PPWSA intends to issue 13.04 million ordinary shares with a par value of 1,000 riels.
The state, represented by the Ministry of Economy and Finance will retain 85 per cent ownership or 73.9 million shares. …
The Cambodia Securities Exchange and Securities Exchange Commission must approve the final offering price. …
The prospective listing date is April 18, and secondary market trading begins thereafter. …
Proceeds from the offering will be used to repay loans from the World Bank, CAPEX, business expansion and working capital.
Phnom Penh Water Supply Authority is gearing up to price an initial public offering of up to $24 million on 18 April, making it the first stock to be traded on Cambodia’s fledgling stock exchange.
… Huy Vatharo, an executive director at underwriter Tong Yang Securities, confirmed that PPWSA would list 15% of its shares at a price of $1.00-1.57 per share, with the government retaining the remaining 85%. …
Foreign investors will be able to invest directly in the company, although it remains to be seen whether PPWSA’s reputation as one of the best managed public utilities in Asia is enough to convince non-domestic accounts to take a punt.
The potential for investment in Cambodia certainly appears to be there, as the country’s location in Indochina affords much opportunity for cross-border trade with Thailand, Laos and Vietnam, says Mark Mobius.
Mr Mobius, who oversees more than US $40 billion worth of investments as executive chairman of the Templeton Emerging Markets Group, is watching the Cambodian railroad industry with particular interest.
‘‘There has been substantial investment in railroads — Cambodia is part of the southeast railroad project to link the south of China to Singapore — so transportation has been interesting,’’ he wrote in a posting on his website yesterday.
Cambodian companies listed abroad provide opportunities for early exposure to the nation’s prospects, Mr Mobius added without mentioning specific stocks. …
