Privatizing state-run enterprises could help boost the number of initial listings on Cambodia’s stock exchange and lend the new bourse some much-needed stability, say finance officials working on the project, which is hoped to open late next year.

“We want good state-owned companies to list,” said Kao Thach, the head of the Ministry of Finance’s Financial Market Division, estimating that between five and ten companies – most likely in the banking, manufacturing and service sectors – would list initially on the exchange, known as CamEx.

But so far, it is unclear what steps have been taken by the government to privatize Cambodia’s key electric, telecom and public water utilities, as well as the Sihanoukville and Phnom Penh ports, but CamEx organizers said they were hopeful that could change.

“It is not up to us. It is up to the government,” Thach said. 

Inpyo Lee, the Korean Exchange (KRX) official who has worked on the project since June 2007 in the Ministry of Economy and Finance, said that KRX officials would bring up the issue with Prime Minister Hun Sen.

“We will ask for help from the prime minister on this,” Lee said

Other financial analysts studying the market also say that Hun Sen needs to encourage big companies to list in order to get the stock exchange off to a strong start.

Some of the companies that are expressing interest in listing are Acleda Bank; Sokimex, Cambodia’s petroleum distributor whose Sokha Hotel development arm has big resort plans; and Union Commercial Bank, a conservative lender that was one of the original banks licensed in 1995.

Thach confirmed that CamEx officials will also look at foreign companies that operate in Cambodia but list on other exchanges such as Korea or Hong Kong, with hopes of getting them to list here as well.

One investment banker suggested that the Malaysian owned Naga Corp – which operates Phnom Penh’s largest casino – would be a good company to attract, since it already trades on Hong Kong’s stock exchange and has a large capitalization that would immediately boost the size of the exchange.

A big company would help the size of the market, one CamEx staffer said, but added: “Something related to gambling might not be good for a fragile stock exchange.”

Business people following the stock market’s development told the Post that a good way to boost its size and credibility would be to get Phnom Penh’s large, family-run conglomerates with diversified holdings to spin-off a subsidiary into an initial public offering and list it for trading.

Investment banker Han Kyung Tae, the representative of Tong Yang Investment of Korea, said he has been working with five such conglomerates for more than a year.

“I believe two out of the five will be in the first group to be listed on the Cambodian Stock Exchange,” he said, but declined to identify them.

However, transparency requirements might keep many of the often secretive family-owned firms from the exchange, CamEx organizers said.

“They’ll need to restructure the company to have clean lines between the family management and the corporate structure,” said Thach.