Cambodian Stock Exchange Sees Slow Progress

There are only about 3,700 accounts at the exchange, and still only 12 companies trading there.

07 September 2012

Suy Heimkhemra, VOA Khmer

PHNOM PENH - Since the public opening of the security exchange in Cambodia in 2011, progress has been slow. Not everyone knows about the exchange, and not everyone can afford to invest.

There are only about 3,700 accounts at the exchange, and still only 12 companies trading there. A third of the accounts are foreign. Currently, the Phnom Penh Security Exhcange building remains quiet, with only about 2,000 shares traded.

Sun Sokhet, a broker there, says the idea of the stock exchange is still new, which makes it difficult for people to invest.

“Unlike people in developed countries, Cambodians, with restricted knowledge, are reluctant to invest their money in something they have never experienced before,” he said. “And some people even compare investing money in the stock exchange to playing a game.”

Cambodia opening its doors to investment [-The whole country is for sale after all]

10/09/2012
Bangkok Post

With GDP growth averaging around 9% for the past decade, Cambodia is certainly attracting interest from potential investors. It has possibly the most investor-friendly environment in Asean with no exchange controls, no restrictions on repatriation of profit, and no discrimination between foreign and local investors.

Moreover, corporate income tax is 20% and there are tax holidays of up to nine years. Foreigners can also take out leases on land for up to 99 years and foreign companies can buy land.

For Thai investors, the interest so far has been in Cambodia’s growing footwear and garment industry. This is Cambodia’s biggest employer and key export earner and there are over 300 garment or textile factories. Low wages – about one-third the level of Thailand’s – are a big attraction for investors, even though the minimum wage for garment workers in Cambodia rose from $61 a month to $66 earlier this year. Cambodian garments and footwear also enjoy favourable tariff-free access to markets in the United States and Europe.

Laos, Cambodia set for more listings

August 31, 2012
Wichit Chaitrong
The Nation

Private companies and state enterprises are expected to raise large amounts of funds via the stock exchanges in Thailand, Laos and Cambodia over the next several years.

More private firms will list on the Cambodian and Laotian bourses next year, their executives told media yesterday at the "Thailand Focus 2012" conference in Bangkok.

Hong Sok Hour, chief executive officer of the Cambodia Securities Exchange, said yesterday that there was currently only one listed firm on the bourse, with market capitalisation of US$140 million (Bt4.4 billion), but five more were expected to list next year. Three of those firms are state enterprises - two port facilitators and one telecom.

He said one-third of investors trading shares in the local market were foreign.

Sacrava's Political Cartoon: PPWS

Cartoon by Sacrava (on the web at http://sacrava.blogspot.com)

Cambodian Stock Exchange sees challenges, opportunities

Monday, May 7, 2012
By Pauline Chiou
Special to The China Post

I visited the Cambodian Stock Exchange (CS--) last September in the heart of Phnom Penh. It had officially “opened” a few months prior but no companies were listed yet. The trading room was filled with new desks and computer monitors, waiting for someone to power them on. Fast-forward seven months and the stock exchange is now starting to breathe signs of life— there is now one company trading on the exchange. On April 18, the Cambodian Stock Exchange started trading with the initial public offering (IPO) of the state utility company, “Phnom Penh Water Supply Authority.”

As a frontier market, Cambodia is still a work in progress.

The government is trying to woo global investors by throwing open its doors and virtually saying, “We'll make it easy for you.” There are no capital controls. No requirements for joint ventures. International companies can own 100 percent of their local business in Cambodia. The only major restriction is on foreign ownership of land. With a young labor force that commands cheaper wages than China, Cambodia has been looking attractive to foreign companies. Despite these incentives, there are many challenges for the new stock exchange:

Resurrecting Capitalism in the Killing Fields

05/01/2012
By Evelyn Chea
MarketMinder (Fisher Investments)

History has numerous examples of the benefits of capitalism and free markets—and Cambodia, which had its first IPO April 18, is a good example.

A single IPO in a nation soon to have a grand total of three stocks may not seem like a big deal. Particularly in an emerging Asia—a region that has experienced fast growth and big liberalization gains in the past few decades. But in Cambodia, to those who experienced directly the Khmer Rouge’s reign of terror (like my parents), it’s another milestone on the long road from devastation at the hands of Pol Pot to opportunity.

Decades of war, political strife and a poor economy set the stage for Maoist revolutionary Pol Pot and his Khmer Rouge party to seize power. Pol Pot sought to turn Cambodia into an egalitarian and self-reliant agrarian society—and to create that society, he and the Khmer Rouge believed eradicating “evil” capitalism was necessary. They closed down businesses; shut down banking, phone lines and post offices; banned property ownership and religion; and eliminated currency—and in the end, perpetrated a genocide and massive socioeconomic destruction.

Cambodia's new corporate darling

30/04/2012
Luke Hunt
Bangkok Post

PHNOM PENH : When the Khmer Rouge were driven out of Phnom Penh in 1979 they left behind a city that had been laid bare. Its infrastructure was in ruins and utilities like the colonial-era water supply were in a state of filthy disrepair.

The ideology of the ultra-Maoists also left 1.7 million people dead and obliterated Khmer culture. Even money was abandoned as an agrarian utopia based on self-reliance was attempted.

It failed and 33 years later the historical ironies of Cambodia's past are becoming all too evident.

Industries such as tourism and garment production are booming. Mining is taking off and the Cambodian Stock Exchange (CSX) is finally up and running after a 10-month delay with Phnom Penh Water Supply (PPWS) its first listing.

Trading volume drops on new Cambodia Securities Exchange

A trader reacts during the first trading day of the Cambodia Securities Exchange in Phnom Penh earlier this month. Photo by Will Baxter

Friday, 27 April 2012
Don Weinland
The Phnom Penh Post

The Cambodia Securities Exchange has seen a sharp decrease in action this week, with trading volume yesterday falling to 3,453 shares, down nearly 100 per cent from Monday.

Despite the drop, which was accompanied by a strong shift from institutional to retail investors, experts have stressed the time and patience required for a fledgling market – one with a single stock traded – to find its feet.

The relatively high opening price for public utility Phnom Penh Water Supply Authority contributed to the declining volume of trades, insiders said.

PPWSA closed at 8,800 riel (US$2.18) yesterday, down 4.86 per cent, near to the exchange’s mandated 5-per-cent trading range for the stock.

Cambodia must solve two big problems for takeoff

23 Apr 2012
By Martin Hutchinson
Reuters

(The author is a Reuters Breaking views columnist. The opinions expressed are his own)

NEW YORK, April 23 (Reuters Breaking views) - Cambodia must solve two big problems to achieve the kind of rapid, sustained growth Asia's tiger economies have delivered. Opening its stock exchange on April 18 is a good start - it shows the country is relatively friendly to foreign investors and markets. But meeting the needs of a rapidly growing population will be expensive, and Cambodia's corruption is both dreadful and pervasive.

Cambodia's economic performance, at first glance, looks decent. It is expected by the Asian Development Bank to grow at 6.5 percent in 2012, around the same rate as in 2011. But with Cambodia's population growing 1.7 percent annually, GDP per capita is increasing at less than 5 percent. That means living standards are increasing more slowly than in richer Asian countries like Vietnam, India and China.

Feeding, educating and housing ever more Cambodians will be a challenge. Cambodia's population is increasing faster than the 1.1 percent annual growth in Vietnam and 1.3 percent in India, and will require large additional investments in infrastructure and services before growth can take off. The new stock market might assist at the margins by bringing in more foreign capital; more reliable pension provisions, making large families less of a necessity, would help too.

Corruption is the real enemy. Even for Asia, the country's property rights are poor, and it ranks with the worst global slums on Transparency International's Corruption Perceptions Index. The World Bank has ranked Cambodia one of the most difficult countries in which to start a small business, in terms of both time and cost. Solving the problem requires action at the top as well as a clean-up campaign throughout the various layers of state bureaucracy.

Cambodia's Stock Market - Questions

Dear All,

I just came across news regarding Cambodia. One of topics has caught my attention. The first stock market transaction in Phnom Penh started on last Wednesday became the breaking news. For this special event, Keat Chhon, minister of Economy and Finance, said : “This is a historic day to mark the first launch of a Cambodian stock exchange. This is a leap forward for Cambodia’s finance sector”.

This event is no doubt a historic day but I have 3 questions (maybe stupid questions):

1. How can a short term financial investment is supposed to finance Cambodia’s economic and industrial development which needs long term investment?
2. How much poor Cambodian people or other investors can be guaranteed given the current accounting and audit system in Cambodia ?
3. How can M. Keat Chhon assure that Cambodia will not move toward a “Casino Economy”?

Best Regards

Kith Chamroeun

Sacrava's Political Cartoon: Hun Xeng Stockmarket

Strong start for Cambodian bourse

April 18, 2012
By Sarah Mishkin in Hong Kong
Financial Times

Cambodia launched its first stock exchange on Wednesday amid investor enthusiasm that drove its first listed shares up 47 per cent by the end of the debut session.

Southeast Asia’s smaller markets have been looking to translate their fast economic growth into stronger capital markets that can draw in foreign investors and help the government privatise assets.

Neighbouring Laos launched its stock exchange last year, and Myanmar confirmed last week that the Tokyo Stock Exchange will help it open a securities market.

Extreme Investing in Cambodia

Cambodia’s Growth May Lure Samsung Asset to Newest Stock [-After the sale of the country, now the sale of state-owned companies?]

Sam Rainsy, leader of Cambodia's main opposition political party, said investors in Cambodia face risks in the stock market because of ineffective financial and legal systems. Photographer: Balint Porneczi/Bloomberg

April 18, 2012
By Weiyi Lim and Anuchit Nguyen
Bloomberg

Cambodia opened its stock market today as the government seeks to lure foreign capital by selling shares in state-owned companies to bolster the economy.

While only one stock -- Phnom Penh Water Supply Authority - - started trading today, Samsung Asset Management Co., South Korea’s largest money manager, said it would consider buying Cambodian stocks after about a year. Cambodia, along with Laos, Vietnam and Myanmar, are poised to emerge as “new frontier growth markets” that will start catching Southeast Asia’s biggest economies, Samsung Asset’s Alan Richardson, who helps oversee $89.5 billion, said by phone from Singapore yesterday.

“The Indochina markets are all interesting because there is so much opportunity,” Richardson said. His Samsung ASEAN Securities Master Investment Trust (5670800) has risen 12.1 percent this year, beating 72 percent of its rivals, data compiled by Bloomberg show.

Economic growth in Cambodia, with a population of 14.3 million, may reach 6.5 percent this year, the Asian Development Bank estimates. While that’s less than the average of 8 percent between 2001 to 2010, it’s more than the ADB’s prediction of 6.4 percent growth for Indonesia, Southeast Asia’s largest economy, and 5.5 percent for Thailand, the second biggest.

Cambodian bourse in long-awaited first day of trade

18 April 2012
AFP

PHNOM PENH: The Cambodia Securities Exchange (CSX) finally began trading shares on Wednesday nine months after it officially opened, when a water monopoly became the first firm to list.

Trading symbolically started at 09:09 am local time (0209 GMT) -- the number nine is considered lucky in Cambodia -- and will finish at noon. Normal trading hours will be from 08:00 am until 11:30 am.

Cambodia launched the bourse to great fanfare in July 2011, after numerous delays because of the global financial crisis and regulatory hurdles.

But no firms were ready to list on the market -- a joint venture between the government and South Korea's stock exchange.

Cambodia May Lure Up to 10 IPOs a Year, Korea Bourse Says

April 13, 2012
By Saeromi Shin
Bloomberg News

Cambodia’s stock market, which is set to open next week after several delays, may be able to lure five-to-10 initial public offerings a year, according to Korea Exchange Inc., the Cambodian government’s partner in the bourse.

State-owned Phnom Penh Water Supply Authority (PPWSA) will start trading on April 18, while Telecom Cambodia and Sihanoukville Autonomous Port are preparing to go public, Kim Bong Soo, Korea Exchange’s chairman and chief executive officer, said in an April 9 interview at his Seoul office. Telecom Cambodia may list as early as October, according to Tong Yang Securities (Cambodia) Plc, which is managing the share sale.

“Cambodia is going to be a very attractive market as investors benefit from the nation’s economic development,” Kim said. “Many inquiries are being placed for possible listings.”

Cambodia Embracing Capitalism With First IPO Since Khmer Rouge

March 18, 2012
By Joyce Koh
Bloomberg News

Tokyo-based Asset Design Co. and Frontaura Capital LLC of Chicago said that while they’re interested in investing in Cambodia there are hurdles. A high valuation for the PPWSA offering and administrative hassles like having to turn up in person to transfer money are among the drawbacks, said Nick Padgett, managing director of Frontaura, which invests more than $90 million in countries such as Tanzania, Serbia and Pakistan.

Min Sovannry wasn’t born when the Communist Khmer Rouge took power in 1975 and abolished Cambodia’s money, markets and financial system. Now the 21-year- old college student can’t wait to embrace capitalism.

One of thousands of Cambodians who have attended more than 200 stock-trading seminars in Phnom Penh, Min said she plans to invest as much as one-third of the $300 monthly salary she expects to earn next year in the country’s stock exchange, which is scheduled to begin trading its first shares April 18.

“I’m very excited,” Min said in an interview. “I’m happy to have this market because it’s a chance for me to make money from buying stocks instead of putting it in the bank.”

Cambodia Embracing Capitalism With First IPO Since Khmer Rouge

Mar 18, 2012
By Joyce Koh
Bloomberg

Min Sovannry wasn’t born when the Communist Khmer Rouge took power in 1975 and abolished Cambodia’s money, markets and financial system. Now the 21-year- old college student can’t wait to embrace capitalism.

One of thousands of Cambodians who have attended more than 200 stock-trading seminars in Phnom Penh, Min said she plans to invest as much as one-third of the $300 monthly salary she expects to earn next year in the country’s stock exchange, which is scheduled to begin trading its first shares April 18.

“I’m very excited,” Min said in an interview. “I’m happy to have this market because it’s a chance for me to make money from buying stocks instead of putting it in the bank.”

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.

Cambodia's first IPO nears

19/03/2012
Anthony Galliano
Bangkok Post

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.

Cambodian water utility to price IPO on 18 April

1st March 2012
Global Water Intelligence

Phnom Penh Water Supply Authority is gearing up to price an initial public offering of up to $24 million on 18 April, making it the first stock to be traded on Cambodia’s fledgling stock exchange.

The company’s roadshow kicked off yesterday, and will run until 6th March.

Huy Vatharo, an executive director at underwriter Tong Yang Securities, confirmed that PPWSA would list 15% of its shares at a price of $1.00-1.57 per share, with the government retaining the remaining 85%.