If you were given all the money in the world to invest in a stock from the stock exchanges of Laos and Cambodia, which stock would you choose? You might not actually get a lot of choices - both exchanges are stagnant two years after becoming operational, due... continue
Investors, along with the next two companies expected to list on the Cambodia Securities Exchange, will watch carefully this morning the action on the country’s first initial public offering, nine months after the CSX officially opened.
After a book-building process that was 17 times over-subscribed, Phnom Penh Water Supply Authority shares will sell at about a penny below the maximum bidding price originally set by the Securities and Exchange Commission of Cambodia.
PPWSA was valued at 6,300 riel, or US$1.57, a share in late March, and 514 investors bought 474,143 shares during book-building.
Nine months after Cambodia’s stock exchange was officially launched, the country’s first share started trading Wednesday, with the initial public offering of state-owned Phnom Penh Water Supply Authority.
PPWSA’s stock, priced at 6,300 riel (US$1.57), jumped 48% to 9,300 riel, according to the data from the exchange website. …
Cambodia tapped into the growing global interest in Southeast Asia with the start of trading in the sole stock at its gleaming new stock exchange on Wednesday.
Ordinary Cambodians and local businesses scrambled to buy into the country’s first initial public offering—of shares in a local water company. They weren’t disappointed when trading began at the deliberately auspicious hour of 9:09 a.m.
Phnom Penh Water Supply Authority shares jumped in price to close at 9,300 riel, or $2.33, up 48% from their IPO price of $1.57 a share, which raised $20 million. The shares—15% of the firm—were 17 times subscribed.
Two more state-owned companies, Telecom Cambodia and Sihanoukville Autonomous Port, also plan to list shares on the new exchange. …
After a string of false starts, Cambodia’s stock market finally started trading on Wednesday, marking a significant step forward for an impoverished country blighted by corruption and scarred by decades of civil war. …
But on Wednesday, traders were reaping fast gains as the price of the sole listed firm, the Phnom Penh Water Supply Authority (PPWSA), jumped 50 percent in the inaugural session.
“Today marks the birthday of Cambodia’s securities market, the day that we moved forward in a big important step in Cambodia’s financial sector and a historic day for Cambodia,” Finance Minister Keat Chhon said at the opening ceremony of the Cambodia Securities Exchange (CSX).
Keat Chhon said two more IPOs would take place later this year for state-owned Telecom Cambodia and Sihanoukville Autonomous Port. Several private companies had also shown interest in listing, he said.
Brokers and would-be investors say CSX can overcome its one-company launch and help to boost transparency in state enterprises, spurring more growth in one of Asia’s smallest economies. …
American Stock Exchange-listed Entertainment Gaming Asia Inc has announced it will build and operate a slot hall as an addition to an existing casino in Poipet city on Cambodia’s border with Thailand, according to a company statement. …
Investors should be cautious when pursuing the opportunities for growth present in Myanmar and Cambodia, Southeast Asia’s frontier markets, Templeton Asset Management Ltd. said. …
In Cambodia, state-owned Phnom Penh Water Supply Authority will have its initial public offering this month, making it the first to be traded on the stock exchange that opened last July without a single listed company. The Cambodian government has said it wants to spur economic development by selling off state- owned companies and encouraging private enterprises to expand with new funding.
Mobius, who oversees more than $50 billion in emerging- markets assets as executive chairman of Templeton Emerging Markets Group, has said he’s watching the Cambodian railroad industry “with particular interest.” …
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. …