The Associated Press
PHNOM PENH, Cambodia: Cambodian lawmakers approved a securities law Wednesday in the latest move to prepare the country for establishing a stock market in the next two years.
The adoption of the law on issuance and trading of nongovernment securities occurred just one week after the government's announcement of its bid to create a stock exchange in 2009.
All 79 lawmakers who attended the session of the National Assembly, the lower house of parliament, voted for the law that Finance Minister Keat Chhon said is based on international best practices for stock markets. To be enacted, the law needs approval by the Senate and to be signed by king, but those two steps are largely formalities.
He said a stock market could be set up in the first half of 2009 but that a lot of work remains to be done by the government.
Beside having to introduce more laws, he said building premises and installing the information technology network necessary for electronic trading are the major tasks that could cost up to US$15 million (€11 million).
Keat Chhon said the government will be looking for foreign partners in the project, which will be beneficial for the country's economy.
"There will be a financial market, a bond market, a stock market for companies to mobilize capital outside the banking system to invest and do business," he told reporters.
Cambodia's banking system has seen signifcant growth in deposits in recent years but still remains too weak to offer financing for any long-term investment projects, according to business experts.
The Cambodian economy has been one of the fastest growing in Asia, expanding at 11.4 percent in each of the past three years. However, its development has been heavily reliant on hundreds of millions of dollars (euros) in international aid.
Foreign donors have also urged Cambodia to diversify its economic structure, which has largely been based on the textile industry. Last year, garment exports were worth US$2.6 billion (€1.9 billion) and accounted for nearly 80 percent of Cambodia's total exports.
In launching a plan for a stock market last week, Prime Minister Hun Sen said foreign aid and increases in bank financing have yet to meet the demand for capital to develop the country.
According to the new law, any person committing insider trading can be punished with from five to 10 years in jail and fined from 20 million riel to 100 million riel (US$4,900; €3,545 to US$24,390; €17,640).
It also says securities firms that breach insider trading rules will be fined from 50 million riel to 1 billion riel (US$12,195; €8,820 to US$243,900; €176,430).
The adoption of the law on issuance and trading of nongovernment securities occurred just one week after the government's announcement of its bid to create a stock exchange in 2009.
All 79 lawmakers who attended the session of the National Assembly, the lower house of parliament, voted for the law that Finance Minister Keat Chhon said is based on international best practices for stock markets. To be enacted, the law needs approval by the Senate and to be signed by king, but those two steps are largely formalities.
He said a stock market could be set up in the first half of 2009 but that a lot of work remains to be done by the government.
Beside having to introduce more laws, he said building premises and installing the information technology network necessary for electronic trading are the major tasks that could cost up to US$15 million (€11 million).
Keat Chhon said the government will be looking for foreign partners in the project, which will be beneficial for the country's economy.
"There will be a financial market, a bond market, a stock market for companies to mobilize capital outside the banking system to invest and do business," he told reporters.
Cambodia's banking system has seen signifcant growth in deposits in recent years but still remains too weak to offer financing for any long-term investment projects, according to business experts.
The Cambodian economy has been one of the fastest growing in Asia, expanding at 11.4 percent in each of the past three years. However, its development has been heavily reliant on hundreds of millions of dollars (euros) in international aid.
Foreign donors have also urged Cambodia to diversify its economic structure, which has largely been based on the textile industry. Last year, garment exports were worth US$2.6 billion (€1.9 billion) and accounted for nearly 80 percent of Cambodia's total exports.
In launching a plan for a stock market last week, Prime Minister Hun Sen said foreign aid and increases in bank financing have yet to meet the demand for capital to develop the country.
According to the new law, any person committing insider trading can be punished with from five to 10 years in jail and fined from 20 million riel to 100 million riel (US$4,900; €3,545 to US$24,390; €17,640).
It also says securities firms that breach insider trading rules will be fined from 50 million riel to 1 billion riel (US$12,195; €8,820 to US$243,900; €176,430).
4 comments:
Stock Market trading is form of gambling! More Cambodian people will lose their shirt and their life saving if need not careful!
KEAT CHHOUN said the minimum for stock trading would be $500!
I wonder how many dirt-poor Cambodian people have $500 to do stock trading?
Capital markets law is essential for any country which chooses to grow its economy. Cambodian companies have a hard time securing bank loans, and most loans to small businesses are from other Cambodian individuals at high interest rates- all this with no regulatory supervision. The stock market will offer a regulated way for individuals to invest including foreign investors. With S.Korea's participation in setting up, and running the stock exchange, it will be a success and very helpful to the average Cambodian company looking to expand. Prior to this Cambodian company's wanting to list, had to apply to other stock exchanges e.g. HKex; Singapore, or Malaysia.
The passage of this law is a good first step.
Ahahhahhahahahha!
Cambodia has many of good law in the book already and nobody seem to care or to enforce the laws!
I am just amazed that AH HUN SEN Vietcong puppet government can pass all kind of law but he can't seem to pass anti-corruption law!
I say the first step is to pass anti-corruption law first and the rest of the law will fall in place!
Is Hunsane going to offer Fried Cricket Stock and Fried Spider Stock for sale!
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