At the headquarters of the Cambodia Securities Exchange on the 25th floor of Canadia Tower, something seems to be missing.
Here, in Phnom Penh’s business heart, the sights typically associated with trading shares – gesticulating, shouting traders, the confusing hand signals, the buzz in the air as thoughts of money blanket the room – are nonexistent. …
Nearly two years after Cambodia’s landmark bourse launched in July 2011, the heady enthusiasm of the early days is competing with disillusion. Only one company is listed: the state-owned Phnom Penh Water Supply Authority. And, after an initial spike, its shares have plummeted back to its listing level. Attempts by others to make the leap onto the exchange have fallen hard. …
Plans for a Cambodian bourse materialised in 2008 between the Cambodian Ministry of Economy and Finance and the Korea Exchange.
A year later, both parties signed a joint venture to create the CSX. Under the agreement, Cambodia owns 55 per cent, while the rest goes to the Korea Exchange. While the market had its inauguration in July 2011, trading started in April 2012, after the water supply authority went public. …
The initial plan for the exchange was to begin with three state-owned companies, including Telecom Cambodia and Sihanoukville Autonomous Port.
Earlier this month, however, the director general of the Sihanoukville deep sea port, Lou Kim Chhun, said the company is still working with an underwriter, SBI Phnom Penh Securities, on its IPO. He didn’t have a time frame.
In March, Telecom Cambodia’s plan to join was derailed by poor finances and after an alleged embezzlement scandal at its top levels. …
After the listing of Taiwanese-owned garment company Grand Twins International (Cambodia) Plc on the Kingdom’s stock exchange was delayed indefinitely, its underwriter said yesterday that the firm hopes to list before the national elections in late July.
According to the underwriter, Phnom Penh Securities (PPS) Plc, negotiations between the company and the Securities Exchange Commission of Cambodia (SECC) over the initial public offering price are finished by now and “we hope [they can list] before the election…We still have a lot to do. We’ll try our best.”
In February, the Post reported that Grand Twins International said it intended to list on the Cambodia Securities Exchange (CSX) in March. PPS said then that the company would offer 12 million shares at $0.25 a share. …
Anne Renzenbrink and May Kunmakara
State-owned fixed-line company Telecom Cambodia’s (TC) plan to join the Cambodia Securities Exchange (CSX) has been postponed indefinitely because of its poor financial performance, reports The Phnom Penh Post. The company will need to redesign its business plan to improve operations, said Sarak Khan, secretary of state at the Ministry of Post and Telecommunications. …
It will be worse still when the transit fee, a major source of revenue for TC, is deducted from this year, added Khan. According to Khan, revenue from transit fees account for about USD 17 million annually, more than 50 percent of TC’s total revenues. …
Securities and Exchange Commission of Cambodia (SECC) director general Ming Bankosal said any company that fails to make a net profit in the last three years of operation will be barred from joining the country’s bourse …
The Taiwanese-owned garment company Grand Twins International (Cambodia) Plc says it intends to list on the Cambodia Securities Exchange (CSX) next month, in a boost for the Kingdom’s nascent stock market.
Phnom Penh Securities (PPS), an underwriter for Grand Twins International (GTI), said yesterday the company would offer 12 million shares at $0.25 a share. …
The government has said it plans to list two other state-owned enterprises, Telecom Cambodia and the Sihanoukville Autonomous Port, some time this year. Officials of both enterprises did not confirm that time frame yesterday.
PPS said that as of June last year, GTI’s total assets and total capital were about $31.6 million and $27.7 million, respectively. GTI is incorporated as a 100 per cent Taiwanese company. …
Phnom Penh Water Supply Authority’s price was unchanged at 6,200 riel yesterday, with 854 shares changing hands, according to data of the CSX.
GTI’s sales increased about 17 per cent, from $21.86 million to $25.56 million, between mid-2011 and mid-2012. …
May Kunmakara and Sarah Thust
Adding its name to a rapidly growing list of private companies, Tonlesap Airlines is gearing up for an initial public offering on the Cambodia Securities Exchange. And like many of these companies, the listing is still years off as Tonlesap prepares the tax and financial information required to go public.
The three years of records is one of the major factors holding companies from listing on the exchange. While many insiders have said the three-year benchmark promotes a higher degree of transparency – and a more stable CSX – others say the time is an eternity not only for interested companies, but for the exchange itself, whose only traded company is losing the attention of investors. …
The firm has recently recommended that the Securities and Exchange Commission of Cambodia (SECC) lower the required documentation to one year of financial and tax history, Hsu said, a move that he said would boost the number of companies on the bourse. Vietnam’s State Securities Commission requires only one year of disclosure from potential listing companies. …
Don Weinland, P. 7
An official at the Sihanoukville Autonomous Port yesterday said the state-owned firm would miss its target of registering with the Securities and Exchange Commission of Cambodia (SECC) next month, a key step before listing on the country’s nascent bourse. …
Ho Hongsik, director of SBI Royal Securities, the firm preparing the port’s initial public offering, said he would not comment on the timing of the registration because the issue was too sensitive. …
Reaksmey and Zsombor Peter, P. 25
The Securities and Exchange Commission of Cambodia (SECC) has set a minimum capital requirement for securities firms…
A statement from the SECC, released yesterday, said that securities underwriters are required to hold a minimum of 40 billion riel of their shareholder’s equities…
It also requires securities firms to maintain a net capital ratio not lower than 150 per cent and required them to report on the status of the net capital of their company.
May Kunmakara, P. 8
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. …
Post Staff, P. 6
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. …
Post Staff, P. 9
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. …
Post Staff, P. 10
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. …
Post Staff, P. 7 - Stock Exchange Education Report Supplement
… 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.
Post Staff, P. 4 - Stock Exchange Education Report Supplement
Stock exchange officials were conducting a five-day workshop on the IT system that will allow trading, Securities and Exchange Commission of Cambodia director-general Ming Bankosal said yesterday. The workshop, held in conjunction with the Cambodia Securities Exchange, would also seek feedback on the system’s functionality as well as providing training, he said. The workshop, slated to run until Friday, is being attended primarily by representatives of firms that are acting as brokers, dealers, or underwriters on the exchange.
(May Kunmakara, pg. 7)
Émile Coué was a French psychologist who introduced a method of self-improvement based on optimistic autosuggestion. “Every day, in every way, I’m getting better and better,” was his mantra. He died in 1926 and probably never visited Cambodia, but his spirit has been hovering over the four-year-long preparation for the Cambodia Securities Exchange (CSX). Continue
While the Cambodia Securities Exchange (CSX) recently opened its doors for business, it’s not quite ready to actually do business. As it currently stands, there is no actual trade taking place, making it the smallest bourse in the world in terms of market capitalization. However, it’s only a matter of time before the fledgling stock exchange begins the process of trading stocks. “The market will [be] fully operational before the end of this year. That means listing companies will complete the initial public offering (IPO) process and be able to sell their shares in the secondary market of the CSX in Cambodia,” said Keat Chhon, Deputy Prime Minister and Minister of Economy and Finance at the recent CSX inauguration ceremony…Keat Chhon expected that three state-owned enterprises–Phnom Penh Water Supply Authority (PPWSA), Telecom Cambodia (TC) and Sihanoukville port–will be able to be listed on time this year, which should pave the way for other companies to be listed on the bourse.
(Leng Bunthea, p 22)
Several securities firms are opening accounts, even as the first listing on the Cambodia Securities Exchange are not expected until later this year, company officials said yesterday. The CSX was launched on July 11 without any listed firms, though state-owned Telecom Cambodia, Phnom Penh Water Supply Authority and Sihanoukville Autonomous Port are expected to trade later this year by listing via Initial Public Offerings. Sonatra Securities Operations Officer Sokhna Rachana said yesterday the firm had opened accounts for both foreigners and locals.
(By May Kunmakara, pg. 8)
The former country partner and staff of Grant Thornton Law and Associates in Cambodia have joined the accountancy and advisory firm BDO Malaysia effective July 1, according to a statement. As a result, BDO Cambodia’s team will now comprise over 30 staff and partners, a company statement said. BDO is one of three accounting firms licensed by the Securities and Exchange Commission of Cambodia to provide accounting and auditor services to the country’s securities sector, according to the statement. BDO Cambodia is also one of the National Bank of Cambodia’s panel of approved independent auditors for banks and financials institutions, the company said.
(By Tom Brennan, pg. 7)