Sam Rainsy calls on Cambodians not to play the stock market

National Assembly: Heated debate on the adoption of the stock market law

12-09-2007
By Ky Soklim
Cambodge Soir
Translated from French by Luc Sâr

The CPP and the SRP are assaulting each others with arguments on the adoption of the stock market law.

The National Assembly held a debate on Tuesday 11 September on the stock market law. The draft law goes along with the initiation of a stock exchange planned for 2009. Keat Chhon, the minister of economy and finance, and opposition leader Sam Rainsy exchanged heated verbal arguments during the parliament session.

Opposition leader Sam Rainsy, himself a former Minister of Economy and Finance, announced that he supports the draft law because it serves to setg up of a stock market. But, Sam Rainsy doubts the independence and the honesty of government officials at the Securities and Exchange Commission of Cambodia (SECC). To Sam Rainsy, if the operation is not conducted well, the stock market could become a cheating place, a place where the "criminals will prosper." Having no confidence in the stock market, Sam Rainsy called on the public not to play the stock market.

Reacting to this argument, Keat Chhon explained that “the government is currently preparing laws to prevent the risk issues raised by Sam Rainsy, and that it is setting up this stock exchange.” The formation of the stock exchange is planned for 2009 with the support of the South Korean government. The cost of setting up of the stock market could vary between $10 to $15 million, and the development of this sector could create hundreds of jobs.

Cambodia moves toward creating stock market as lawmakers pass securities law

Wednesday, September 12, 2007
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).

Cambodia passes stock market law

PHNOM PENH, Sept 12 (Reuters) - Cambodia's parliament passed legislation on Wednesday to allow a stock market to open in 2009, another concrete step in the Southeast Asian nation's recovery from the devastation of Pol Pot's "Killing Fields".

South Korea has pledged $1.8 million in aid and technical assistance from the Seoul stock exchange to get the Phnom Penh bourse off the ground. Overall, the launch would cost $15 million, Finance Minister Keat Chhon said.

Government officials tout the planned stock exchange opening as evidence of their restructuring the economy to increase investment and drive growth. The opposition says it is just as likely to make corrupt government officials rich.

As many as 400 companies are thought to be possible candidates for flotation in the nation of 13 million.

Much of Cambodia's economy is dependent on agriculture, although it has some proven off-shore oil and gas reserves, a vibrant garment industry and booming domestic construction and telecommunications sectors.