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Garment industry IPO interest

FOREIGN-OWNED garment factories are showing particularly strong interest in listing on the planned Cambodia Securities Exchange, according to Phnom Penh Securities Director Kuy Vat.

The twice delayed exchange is set to launch in July, with at least three state-owned firms set to float – though private companies have also been quietly approaching underwriters such as Phnom Penh Securities to prepare Initial Public Offerings.

“We have received a lot of applications from clients – who are mostly foreign-owned companies in the garment sector. I haven’t seen any domestically-owned companies contact us yet,” said Kuy Vat.

The motivation for listing was straight-forward, he said. “They intend to go public because they need the money to expand their business rather than borrowing from the bank.”

Foreign-owned companies in particular were aware of the benefits that listing could bring, he said.

A well-functioning exchange would bring more companies to list, he added.

Although Phnom Penh Securities has not yet signed a contract to prepare an IPO for a private firm, he said he plans to sign the first one soon. Kuy Vat declined to name individual companies involved.

Another of the seven approved underwriters, Tong Yang Securities (Cambodia), has been discussing listings with companies from various sectors, said Managing Director Han Kyung Tae.

“They are from various sectors – manufacturing as well as retail, and IT,” he said.

The Cambodia Securities Exchange will require private sector firms to list to be successful, according to an expert.

“That’s the government’s big ambition,” said Financial Institute of Cambodia Vice Rector Ghanty Sam.

“It wants private companies to go public,” he said, adding listings would improve procedures at traded companies.

Garment Manufacturers Association in Cambodia Secretary General Ken Loo said he was not aware of whether or not individual garment factories would list.

He added it was the internal decision of factories to decide whether or not to list.

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