With the boom of the Cambodia Securities Exchange (CSX) after its first-ever listed initial public offering in April, young Cambodians from Phnom Penh to the provinces want to find out what exactly this emerging financial system is.
According to the Securities and Exchange Commission of Cambodia (SECC), the CSX is “a place to exchange stock and other financial tools”.
The definition as set out by the Law on Public Offering and Stock Exchange says the CSX “refers to a market or a place of securities exchange or a system as a means to sell, transfer, or buy stock”.
Eighteen-year-old Ngeit Chay Leang, a university freshman, wants to know more about the CSX like many other young Cambodians.
“The stock market is a totally new topic for me and other students, so I want to know more about it before I decide to invest or not,” Leang said.
Chan Vouttey, a student at Institute of Specialized Economics and Finance (ISEF), said, “I think many young adults are interested in investing, but they just don’t know how.”
She continued, “What if I want to buy only a share, will they still sell it to me? Is there law or police to protect the shareholder? We have questions.”
Thida Pov, on staff at Phnom Penh Security, a broker company, was on hand to clear up these doubts.
“Everyone can invest their money in the stock market. The first thing they have to do is sign up for an account at the CSX, and they have to have a bank account. Clients can also sign up for an account with brokers like us. We don’t charge for signing up,” Thida Pov explained.
Thida Pov continued, “To sign up for the account, clients need to bring an ID card, and in the case of foreigners, a passport. Then the clients are required to get an investor ID, which costs US$5. With the investor ID, clients will be able to buy and sell stock.”
“After opening the account, clients will be charged 0.67 per cent for commission – .17 per cent goes to the stock company and .5 per cent goes to the brokerage staff,” Thida Pov added.
Chan Sophal, President of the Cambodia Economist Association and Economic Analyst, explained, “The CSX is an opportunity for individuals to participate in investment, and they can earn more profit than if they kept their money in a savings account in the bank.”
“However,” Chan Sophal added, “it is not a good time yet for youth to invest in the CSX, since the price of stocks keeps decreasing.”
Chan Sophal said that young Cambodians should wait until they gather enough information about the stock market before investing.
“Investing without information will lead to more risk,” he said.
The stock exchange plays an important role within the national economy.
According the SECC website, the CSX will improve the Kingdom’s economy by collecting capital and investing it directly. The SECC also expects the CSX to promote more investment in the national economy among individuals.
The SECC will “secure an effective and transparent way of investing for various companies”, the website says.
Of course, there are disadvantages to investing in the CSX.
Some disadvantages include the risk of a company revealing secret information or announcing false information, for example, which can make shares unexpectedly plummet – thereby affecting the whole CSX and the rest of the national economy.
From her studies at ISEF, Chan Vouttey recommends that students majoring in a business-related concentration should involve themselves in the stock market to learn more about it.
“As long as I personally feel that I got enough information about the CSX,” she said, “then I would invest my money.”