Cambodia's stock exchange will receive a $2.5 million funding injection from the South Korean government in an attempt to draw more corporate interest from companies who may want to go public, according to a recent report on state media site AKP.
The funds will go towards paying for Korea International Cooperation Agency-led training programs aimed at helping the government, the Securities and Exchange Commission of Cambodia (SECC) and the Cambodia Securities Exchange (CSX) rope in more firms.
Key Cambodia staff will be trained by South Korean experts, and the Korea International Cooperation Agency, or KOICA, will also help launch a public-awareness campaign that boosts the stock exchange’s image, according the state media report.
“Under the agreement, KOICA will dispatch qualified experts to assist SECC in drafting policy framework and regulations that would attract more IPOs,” the report says.
The CSX launched in 2012 with the first and only IPO from the Phnom Penh Water Supply Authority. The Cambodian government and the Korea Exchange struck the joint-venture deal in 2010.
Although numerous proposals from other companies, including garment makers Grand Twins International Ltd and TY Fashion, may materialise sometime this year, the water authority is still the only listed firm.
But few people connected to the multimillion-dollar plan that is supposed to create more awareness about the stock exchange could go into much detail when questioned about it yesterday.
Despite being present at the public signing, Nguon Sokha, secretary of state at the Ministry of Economy and Finance, declined to comment on exactly where or how the additional funding would be allocated or spent.
“I cannot speak on behalf of the ministry,” Sokha said.
Hort Sroeu, a representative from KOICA, said he was unable to discuss the deal or whether KOICA had already rallied local and overseas business interest in Cambodia’s stock exchange.
South Korean embassy counsellor Lee Hyung-jong said he was not aware of the details of the KOICA funding project in Cambodia.
Sok Dara, deputy director general of the securities exchange commission, which regulates the bourse, welcomed the funding.
“Yes, this is very good news for the CSX,” he said, without commenting further on the potential impact the $2.5 million funding agreement will have on the stock exchange’s attractiveness.
Stephen Hsu, an underwriter at Phnom Penh Securities, said he heard about South Korea’s interest in the stock exchange, but could not say where the money is most needed in order to improve the lackluster market.
“We had visitors from Korea recently doing research on the CSX. But I have been out of the country lately, so I am unsure about the details of this agreement,” Hsu said. “I am sure the SECC would rather generate interest from local firms instead of overseas firms and I do think the CSX needs to be publicised more.”
Since 2012, when the Phnom Penh Water Supply Authority went public, its shares have fallen dramatically, and the exchange has recorded several consecutive days without any trading volume.