Jul 14th 2011 | HONG KONG
The Economist
IF STOCKMARKETS are like casinos, as John Maynard Keynes argued, then the new exchange that opened this week in Cambodia has dealers but no cards, croupiers but no roulette wheels. The Cambodia Stock Exchange has no stocks to exchange, making it arguably the smallest bourse in the world (see table).
It opens six months after an exchange in neighbouring Laos. Both were set up with the help of Korea Exchange (KRX), which runs the third-largest bourse in Asia. It is animated by a vision of creating “one board” on which investors can trade securities listed on exchanges all over the world. The firm is now helping to modernise the Uzbekistan exchange and has even approached Myanmar.
The Cambodians hope three state-owned companies will list by the end of the year. If so, the exchange will vault over its Lao rival, which has only two stocks. (That has not stopped it compiling its own market index, the LSX Composite.) Even then, the Lao Securities Exchange would be bigger, measured by market capitalisation, than Mozambique’s exchange, the Bolsa de Valores Moçambique, set up in 1999 with the help of the Lisbon Stock Exchange and the World Bank. The BVM’s premises boast “lovely glasswork and a posh reception desk”, says Bruce Hearn of the University of Leicester. But they open only three mornings a week. Bids can be placed over the internet but it can take three months or more to find a seller.
Even Pat Shin of KRX believes some economies are too small to warrant an exchange of their own. In his view the thresholds are a population of 5m (Laos has over 6m) and an income per person of $300-500 (Cambodia’s exceeds $800). South Korea, he points out, opened its first exchange in 1956, only three years after the Korean war. It took ten years for the exchange to contribute much to development, he says.
It is not unknown for a stock exchange to open without any stocks. The Douala Stock Exchange in Cameroon had to wait three years for a debut offering, and no company could initially meet the Bulgaria Stock Exchange’s requirements. At least the Cambodia Stock Exchange has impressive premises in the country’s tallest building. Some mighty exchanges had much humbler beginnings. One even began under a Buttonwood tree.
5 comments:
i read when they first open the vietnam' stock exchange a few years ago, there are also a lot of pessimistic view about it. so, now we hear the same skepticism about cambodia. well, i think in the beginning of all things, there's always a negative few about it. but i think in a few years, people will have confidence. again, only time will tell. i wouldn't be so biased at the start of it all, you know! give it a chance, cambodia will blossom too, you know!
a few years ago when the very first atm was open in cambodia skeptics were talking about the robbery, the grim prospect of the business, etc! look now, there are more than 500 plus atm machines in cambodia. i think the same can be said about the beginning of the cambodian stock market exchange as well. people are always having negative view about it, but i think in a few years time, they will have a different view on cambodia. well, people will always be people, again, only the rule of law matters more, really!
I like the article. It points out the shortfall yet optimistic views of our new stock exhchange. Sooner or later, when Phnom Penh become the "Pearl of Asia" again, people will mesmarize the beautiful city and people. We are seeing some progress already as the world financial crisis begin to recover, our country are growing at a steady pace of 6% or better so far and the prognosis is upward rather than decreasing. Cambodia is an emerging market which means that it is volitile and risky, but the reward can be very high depending on your hedging tolerance. In any case, it is still better than some rogue states like Lao, Myanmar, and newly East Timor Leste. Politically, we are arguably more stable than these countries relatively speaking.
As a Khmer blogger, I am very optimistic about the outlook. We will see our country prosper and trending.
Best Regards,
The Great Khmer Empire
What type of careers do you people work in? Cause these response you post are so lame and uneducated. Cambodia Exchange will expect to raise capital from foreign or domestic investors with proper respect to legal environment to appropriate the values and trusts. In which case the level of environment in CAMBODIA's Government is not suit to harvest such capitalism.
Thus, CAMBODIA IS JUST ANOTHER COMMUNIST GOVERNMENT OPERATING UNDER THE SKIN OF DEMOCRATIC STATUES. PLEASE TELL HUN SEN HE OWE ME MONEY. WHOLE FAMILY IN FACT. PHAY SHITPAN, TOO. So shut up about being arrogant.
TRUE CAPITALISM COME FROM PROPER GOVERNMENT THAT VALUES AND GAIN TRUST FROM THEIR RESPECTED CITIZEN WITH VIRTUES. CAMBODIA = CORRUPTION, FRAUD, INCONSISTENT VALUATION INCOME WISE. TOO MUCH COPYRIGHT CONCERNS.
CAMBODIAN GOVERNMENT HELP THEIR CORRUPTED CAPITAL SYSTEM TO PRODUCE LOSSES FOR AMERICAN COMPANIES BY NOT RESPECTING AMERICAN COMPANIES COPYRIGHTS.
I SEE T-SHIRTS being produce without copyright from AMERICAN COMPANIES.
DVDs production without proper copyrights.
WALT DISNEY logos without their copyright.
SO MUCH DISRESPECT from CAMBODIAN GOVERNMENT yet they whine about raising capital.
HOW MUCH FAKE STOCKS will be issues from, HUN MANET's DESK?
BY THE WAY DID YOU KNOW????
PRAHA MAE BAIT SAIT>>>>> :)
6:57am & 7:01am (one & same person) have you ever owned company shares before? yes ? then you know what is expected from the company directors when floating ipo's, right? can you realistically expect accountability in an environment where basic ownership rights are not respected? otherwise you are simply being naive and totally misled by trappings of modernity. so you think 500 ATM's are desirable right? why can't those banks employ 500 of our young educated people as cashiers instead ?
Post a Comment