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Stock exchange launches

THE Cambodian Securities Exchange officially launches today after years of planning and delays, though insiders said yesterday stock trading isn’t expected until the end of the year.

However, government officials, investors and academics applauded the launch, saying it would advance transparency in the country and offer a new path for economic growth.

The bourse was a joint venture between the Cambodian government and the Korea Exchange, which hold 55 percent and 45 percent of the CSX, respectively. The two sides have been working on the project since 2007.

Hwang DBS Commercial Bank country head Han Peng Kwang touted the exchange’s potential for both domestic firms and investors.

“It is good for local companies because now they can issue stocks as a way of raising funds to expand their business. It is cheaper than taking a loan from a bank,” he said.

“And local investors will have other investment alternatives, as they normally buy property or put their money in the bank,” he added.

Han Peng Kwang also noted that the banking industry and stock exchange usually work together “in order to push up the overall capital market of the country”.

At the same time, Asia Cambodia Law Firm President Seng Vuoch Hun said the CSX could catalyse much-needed standards of accounting in Cambodia.

“It will be a driving force to build transparency and proper financial reporting. It will especially urge companies to pay taxes and respect the law,” she said. She also cautioned about protecting new investors, as the idea of an exchange is new to the country.

“Regular investors will feel the most impact if the market doesn’t operate properly or regulations are not clearly implemented. The government should think about their safety,” she said.

Panasastra University finance lecturer Sam Visoth shared those sentiments, warning about potential downside of a strong regulatory framework not being in place.

“If it is not seriously carried out, there will big dangers to investors, mostly small investors,” he said.

Nguon Sokha, director general and spokeswoman at National Bank of Cambodia, admitted the government still has some work to do to strengthen the country’s securities industry. However, she hoped experienced market players would help ease the transition.

“I do hope the market will operate smoothly thanks to the new securities firms, which have years of experience in other countries. They will bring their skills and experience to develop the new industry in our country,” she said.

The Securities and Exchange Commission of Cambodia so far has licensed 15 private companies to serve as underwriters, dealers, brokers and financial advisors for the CSX.

Some of the companies are subsidiaries of larger firms operating in more developed markets such as Japan and South Korea. SECC Director General Ming Bankosal told reporters last week that three state-owned companies will issue shares on the bourse when trading eventually begins: Telecom Cambodia and Phnom Penh Water Supply.

“I think that it will take until the end of the year before stocks start trading,” he said.

Some private companies and other state-owned companies also have shown an interest in going public, he added.

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