Cambodia Delays Stock Exchange Yet Again

JULY 21, 2010
Associated Press

PHNOM PENH, Cambodia—Cambodia has delayed the opening of its proposed stock market for a second time, pushing the date back to July 2011.

In a statement Wednesday, the Finance Ministry said the delay was due to technical issues and the global economic crisis.

``The postponement of the stock market is to adapt to the evolving situation of the global economic and financial situation, which shows some positive signs of recovery but is still fragile,'' the statement said.

Last December, officials said Cambodia's stock market would open by the end of this year after initially targeting it to begin operating in 2009. After receiving the approval from Prime Minister Hun Sen, the Cambodia stock exchange is expected to kick off in July 2011, the statement said.

The Cambodian economy is small and reliant on textiles, which account for nearly 80% of exports, and hundreds of millions of dollars in international aid. Foreign investment has been deterred by the country's reputation for endemic corruption.

Neighboring Vietnam started its stock market in July 2000. Nearby Laos also is planning a stock exchange.

Hong Sok Hour, director general of the Cambodia Securities Exchange, said the delay was necessary because Cambodia needs everything to be in place before the opening.

``We want our bourse to be a good one when we open. That is why we need the infrastructure and human resources to be ready at the same time,'' he said.

In December, Cambodia awarded a contract to a South Korean firm, World City Co. Ltd., to build the $6 million, four-story, 71,900-square foot stock market building in Phnom Penh's planned financial district on the outskirts of the capital.

The finance minister announced plans in 2007 to launch a stock market, saying Cambodia needs to find new ways to attract international capital beyond international aid and bank loans. Soon after, lawmakers approved a securities law on issuance and trading of nongovernment securities to pave the way for the market.

Cambodia delays stock market plan: official

Nearly one third of Cambodia's population survive on only 50 US cents a day or less

Wednesday, December 02, 2009
AFP

PHNOM PENH — The global financial crisis has caused Cambodia to push back its plans to open a national stock exchange this year, officials said Wednesday.

Cambodia signed an agreement last year with representatives from South Korea's stock exchange, the Korea Exchange (KRX), Asia's fourth-largest bourse operator, to establish a stock market in 2009.

However government officials said Wednesday that the Southeast Asian nation was not ready to go ahead with the plans due to the world financial slowdown.

"We are not ready in terms of capital... amid the financial crisis situation," said Mey Vann, director of the industry and finance department at Cambodia's ministry of finance and economy.

The new date for launching the stock market had not been set, he said, but the country planned to start operations or trading in late 2010, he told AFP.

"A stock market is good for our economy. It helps collect money outside the banking system for the investment," Mey Vann said.

While still among one of the world's poorest countries, Cambodia has emerged from decades of conflict as one of the region's rising economies.

But after several years of double-digit growth fuelled mainly by tourism and garment exports, Cambodia was buffeted by last year's global economic downturn.

The International Monetary Fund in September predicted Cambodia's economy will contract 2.75 percent this year amid the slowdown.

By comparison the economy grew by 10.25 percent in 2007 and was projected at 6.5 percent in 2008, according to the IMF. Last year's figure is still to be fully established.

Cambodia remains a largely cash-only economy and a high degree of mistrust keeps many people hoarding their money at home instead of using banks.

Nearly one third of Cambodia's 14 million people survive on only 50 US cents a day or less.

Hun Sen fesses up: Crisis does hit Cambodia after all and it may hinder stock market plan

PM: Crisis may hinder Cambodian stock market plan

PHNOM PENH, Feb. 17 (Xinhua) -- The world financial crisis may delay the establishment of a Cambodian stock market despite a plan to have it up and running by this year end, national media Tuesday quoted Prime Minister Hun Sen as saying.

A delay would help Cambodia avoid the "anarchy" and tumbling stock prices like other stock markets around the world, Hun Sen said on Monday at an economic conference in Siem Reap province.

"If the world stock markets are still in anarchy, should we follow the plan in 2009 or not?" English-language daily newspaper the Cambodia Daily quoted the premier as saying.

"If the stock market is born to die, we should not establish it at this time," he added.

According to local reports, the Korea Exchange (KRX) planned to sign an official agreement with the Cambodian government on Thursday to help launch the kingdom's proposed stock exchange market in December.

KRX manager Inpyo Lee expected institutional investors and foreigners to be the main source of liquidity in the early stages of the market, and about 30 companies would be listed by the time the exchange was operating "normally."

Meanwhile, experts have expressed their doubt and lack of confidence, warning that the timing of the initiative could create problems as Cambodia faces reduced economic growth, increased unemployment and the threat of rising non-performing loans.

"I think that currently, the environment is not good enough to proceed with the stock market in Cambodia," Kang Chandararot, economist and president of the Cambodia Institute for Development Study, told the Phnom Penh Post, adding that Cambodia would risk losing investors' confidence, if it rushed prematurely into establishing an exchange.