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Minister of Economy and Finance Aun Pornmoniroth rings a bell to signal the start of trading of PAS shares on the Cambodian Securities Exchange yesterday in Phnom Penh. Heng Chivoan

Seaport debuts on stock market

Shares in Sihanoukville Autonomous Port (PAS), the state-owned enterprise that operates Cambodia’s only deep-sea port, debuted on Cambodia’s stock exchange yesterday after an initial public offering that raised $27 million.

The port operator became the fifth listed firm on the Cambodian Securities Exchange (CSX), with its stock trading as PAS. In total, it offered investors $21.4 million, or a 25 percent stake in the company, with shares priced at 5,040 riel ($1.26).

Trading opened at 5,360 riel ($1.34) per share, up over 6.3 percent from the stock’s offering price, but by the end of the morning’s session had slipped to 5,100 riel ($1.28). A total of 13,798 shares changed hands, amounting to $18,298.

By comparison, Phnom Penh Autonomous Port (PPAP), which in December 2015 became the third company to list on the exchange, saw a similar level of trading on its opening day, with 13,050 shares traded worth about $17,000.

Lamun Soleil, director of market operations at the CSX, said the opening price of PAS reflected strong underlying demand for the stock.

“The opening price was 5,360 riel, which is a 320 riel increase [on the offering price],” he said. “It is a higher increase compared to the previous listings, with the exception of PWSA, the first listed security on the CSX.”

Seng Chan Thoeun, head of corporate finance at SBI Royal Securities, the stock’s underwriter, said the difference between the offering price and opening price was the result of supply and demand.

“The price of 5360 riel [was the result of] the demand from investors,” he said.

According to CSX officials, the offering price was determined by a bookbuilding exercise in late April that gauged investor interest in the initial public offering (IPO). Local and Asian institutional investors snapped up shares during the bookbuild, which was 2.4 times oversubscribed, while the Japan International Cooperation Agency separately purchased 11.57 million shares, or 54 percent, of the total offered shares.

Investors unable to acquire PAS shares during the bookbuild or the fully subscribed retail subscription last month were able to place orders to purchase shares on its opening day of trading. This excess demand, CSX officials said, helped push up the stock’s opening price.

A higher opening price is often a good sign that demand for a stock is strong and the stock will continue to rise. Most local stocks, however, have dipped below the issue price within days of listing on the CSX.

Yet investors that The Post spoke to yesterday said they were not necessarily seeking a growth stock, but rather investing to realise dividend gains.

PAS has offered investors a guaranteed 5 percent dividend yield on the initial share price for the next three years.

“The 5 percent [guaranteed] dividend will let me hold the stock for the long term,” said a retail investor who declined to be named. “I think the performance [of the IPO] is good because the [current] price is still higher than the IPO price, and there are some investors who are still [making] orders.”

Soleil said SBI Royal has not confirmed whether it will act a liquidity provider for PAS stock, a role that can provide price stability and improve liquidity by making it easier for traders to buy and sell shares.

“We tried talking to SBI Royal before the listing, but it is not [finalised] yet,” he said. “I think that SBI Royal believes that the stock price will not decrease, so they do not want to be a liquidity provider. If the price tends to decrease, they may decide differently.”

Eiichiro So, chairman of SBI Royal, said the firm’s decision to become a liquidity provider would depend on the stock’s performance.

“I think it depends on the market,” he said. “We cannot say a target date on when we will become a liquidity provider.”

PAS Chairman and CEO Lou Kim Chhun said that the company will use the proceeds of the $27 million IPO to purchase new land and equipment to expand its port activities in Sihanoukville.

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