VOA Khmer
Original report from Phnom Penh
29 October 2007
Cambodia approved a securities law in September to prepare the country for a stock market in 2009. The stock market will be managed by the Finance Ministry in cooperation with the South Korean stock market and is expected to open its trading in 2009. But critics say Cambodia's laws are too weak to instill the kind of confidence a stock market requires.
Opposition party lawmaker Son Chhay told VOA Khmer recently he worried that the government is moving too fast.
"We need at least three to five years to make sure we have capable people or else we will have bogus companies that will take investors' money and run," he said.
Finance Minister Keat Chhon has said his ministry is evaluation about 400 companies, foreign and local. He said foreign and local companies have equal rights in participating in the stock market.
Cheam Yeap, a lawmaker from the ruling Cambodian People's Party. He said the securities law has strict rules and punishment for those who violate it.
"Article 9 makes it clear that anyone who sells stocks illegally will be punished from 1 million to 1 billion riel and a jail term from 1 to 20 years," he said.
Critics say Cambodia cannot yet rely on its laws to stabilize a securities market.
"For a stock market to succeed, there must be strict laws governing the market, and an independent court must be in place," Tith Naranhkiri, a former professor of economics and international finance at Johns Hopkins University in the US, told VOA Khmer. "In Cambodia, corruption is rampant, so a clean agency in charge of monitoring and investigating the companies registering in the stock markets is not feasible."
But supporters say a stock market will never work if they never try.
"Prime Minister Hun Sen has always advised us that a 1,000-mile journey cannot be completed unless the first step is taken. And that first step needs to be bold in order to finish the journey," said CPP lawmaker Chea Peng Chheang. "So, I do not worry that much. It is important that we have so-called on-the-job training to make the introduction of the stock market a success. If something happens along the way, we just need to fix it, and continue the journey."
Opposition party lawmaker Son Chhay told VOA Khmer recently he worried that the government is moving too fast.
"We need at least three to five years to make sure we have capable people or else we will have bogus companies that will take investors' money and run," he said.
Finance Minister Keat Chhon has said his ministry is evaluation about 400 companies, foreign and local. He said foreign and local companies have equal rights in participating in the stock market.
Cheam Yeap, a lawmaker from the ruling Cambodian People's Party. He said the securities law has strict rules and punishment for those who violate it.
"Article 9 makes it clear that anyone who sells stocks illegally will be punished from 1 million to 1 billion riel and a jail term from 1 to 20 years," he said.
Critics say Cambodia cannot yet rely on its laws to stabilize a securities market.
"For a stock market to succeed, there must be strict laws governing the market, and an independent court must be in place," Tith Naranhkiri, a former professor of economics and international finance at Johns Hopkins University in the US, told VOA Khmer. "In Cambodia, corruption is rampant, so a clean agency in charge of monitoring and investigating the companies registering in the stock markets is not feasible."
But supporters say a stock market will never work if they never try.
"Prime Minister Hun Sen has always advised us that a 1,000-mile journey cannot be completed unless the first step is taken. And that first step needs to be bold in order to finish the journey," said CPP lawmaker Chea Peng Chheang. "So, I do not worry that much. It is important that we have so-called on-the-job training to make the introduction of the stock market a success. If something happens along the way, we just need to fix it, and continue the journey."
6 comments:
Excellent, this will certainly to boost investing in Cambodia by a good factor annually in the years to come. I can't wait to see it happens!
I hope Cambodia don't sell its reputation.
Cambodia does not sell it reputation, but being a poor country, it is not out of this world to see some imperfection. And of course, we can look forward to a bunch of power hungry hypoes to capitalize on every little incident or flaw that is uncovered to try to spoil it for everyone.
Cambodia is not ready for a stock market, not now, not 5 years from now - until she has fixed her crazy banking system and her dysfunctional legal system. As long as respect/enforcement of private property rights remains a rickety business i can't see how you could trade ownership in financial assets. i'm afraid to say that her lawmakers haven't got a clue what they are asking for.
Everything all fixed, and we are ready to kick off our stock market.
Cambodia must mover forward and capital markets is one necessary step which will allow Cambodian owned and operated companies to obtain money for expansion and jobs. S.Korea has vast experience in running the stock market so it will be done correctly.
The only law that needs to be "strong" is the capital markets law, and strong really means comprehensive in the sense that it covers areas of the law that have not been yet passed- for example, the capitol markets law should have a provision for liquidation and/or bankruptcy of a "listed company". So while there is no bankruptcy law yet in Cambodia, listed companies which file bankruptcy will do so under the capital markets law provisions, and under the supervision of the
Securities Exchange Commission in the same way and the Banking and Financial Institutions law allows for liquidation of banks.
It will be important for the SEC to be independent much like the National Bank, and even though the SEC is under MOEF, it should not be interfered with. Actually, in my view, it would have been better to have been placed under the RGC- that is the Council of Ministers rather that MOEF. The clear trend in the world is that the SEC should be under PM or President and not under Finance i.e. Japan etc.
The Phnom Penh Stock Market should be privately owned, and it should be regulated by a SEC who
apply the standards for listing to new IPOs and serve as a watchdog.
Bottom line, this is a good thing for Cambodia and a necessary step towards prosperity for its citizens.
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