Courtesy of Pornchalit Ploykrachang, Head of Equities, SBI Royal Securities

OPENING DAY

The first day of trading in the Cambodia market started off with a bang with the stock closing near its 50 per cent limit. The initial IPO price of PPWSA was 6,300 KHR or US$1.57 with the issue more than 20X oversubscribed. PPWSA, the only listed stock in the market closed at 9,300 KHR or around US$2.32, up more than 47 per cent from the IPO price. Market volume was reasonable at around US$2.05m in turnover with 879,426 shares changing hands. At the close the stock was trading at around 26X P/E multiples for FY12. Regional average for the water utility companies is trading at around 11X P/E for FY12, so fundamental is a bit rich and little upside. We believe the stock is poised to come off a bit within the next few days and we expect the market volume to dry up as well. So we will see how the market react tomorrow as the trading limit is back to normal level at +/- 5.0 per cent of the trading band.

THURSDAY

Second Day Cambodia – Market recap 19/4/12 – PPWSA up another 5 per cent Yet another strong day for the Cambodia stock market. The second day of trading proved to be another success, following a very strong day yesterday.  PPWSA stock price limit up again today, to close at KHR 9,750 (US$2.43), up another 4.8 per cent.  A total of 488,528 shares traded which was much lower than yesterday at 879,426 shares, total value was US$1.2m, down from US$2.05m, previously.  In two trading days  since the IPO the stock has gone up more than 50 per cent and it is trading a price/earnings (P/E) multiple of 29X, a very expensive multiples compare to the regional market and regional water utility companies.

TYS, the underwriter of PPWSA,was the biggest buyer and were buying the bulk of the shares in both sessions, presumably for institutional clients. There were still around 220,000 shares unexecuted following the closing of the second session, so there might be more buyers tomorrow.  It appears for the first time in two days, Golden Fortune Securities were net sellers of the shares today, selling around 340,000 shares of PPWSA. Most of the selling were probably from the Chinese investors which got in during the IPO.

FRIDAY

Cambodia – Market recap 20/4/12 – PPWSA limit up again.

We have yet to see a pull back from PPWSA share price. The stock is up to its limit again for the third consecutive day in a row.  PPWSA is now trading at KHR10,200 (US$2.55), up another 4.61 per cent. Since the first listing of shares on Wednesday, PPWSA share price has gone up 62 per cent from its IPO price of  KHR6,300 (US$1.57). We saw about 377,342 shares traded today which was down from 488,528 shares traded yesterday, total value was less than US$970,000, down from US$1.2m previously. We believe that the market now is looking more and more like a trading market as prices will most likely not continue to perform as the same levels next week. PPWSA management has released its earnings target at only about 10.2 per cent revenue growth for this year. The stock is now trading at around 30.5X P/E in FY12, only 10.2 per cent top line growth. P/E to top line growth is at around 3.0X in FY12.

MONDAY

Cambodia – Market recap 23/4/12 – PPWSA closed at flat today at KHR10,200 (US$2.55)

There were more retail buyers today with ACELDA Securities accounting for more than 33 per cent of the market turnover. We continue to see some foreign institutional clients interested as well with TYSC buying about 97,000 shares today. GFS continues to be net sellers of the market for the second times in two days selling 159,100 shares or around 42 per cent of the selling volume.  There were still 26,065 shares unexecuted on the sellside which was different from the last two days.

PPWSA closed flat at KHR10,200 (US$2.55) today, but at a higher total volume .For the first time since the market opened last week the stock did not rally but only manage to close unchanged.  However, market volume surprised us a bit with 542,994 in turnover, up 44 per cent from Friday’s trade.  Total market value was US$1.4m, up from US$970K previously. Today, total market value was the second highest after the first day trading of US$2.05m, an indication that there might be some more local interest in the market.  As we mentioned on our note last Friday, the market is looking more and more like a trading market as prices will not likely move up further as the stock is trading at an all time high of 30.5X P/E with only about 10 per cent revenues growth in FY12.

Golden Fortune Securities (GFS) were active in both the buying and selling today. They brought 230K shares in the market today, accounting for 42 per cent of the buying volume and they were also the biggest seller today as well selling 217K shares or 40 per cent of the volume. Other noticeable buyers in the market were ACLEDA and SONATRA securities with a combined volume of 230K shares. TYSC were also selling in the market today at 114K shares or 20 percent of the market.

TUESDAY

Cambodia - Market recap - 24/4/12 - Maybe the fun is over, PPWSA down nearly 5.0 per cent. A lackluster day in the Cambodian stock market today as the market volume was only US$132K or about 0.5 per cent of free float. The air is out of the tires now as PPWSA shares took a hit today, falling 5.0 per cent.  The pull back from PPWSA share price was expected as stock ran up more than 60 per cent in four days. PWWSA closed at KHR9,700 (US$2.42).  We only saw about 54,735 shares traded today, which was down from 542,994 shares traded yesterday.  Total market value was only US$132K, a mere 10 per cent of yesterday’s value. There were a total of 395K shares being offered that have been unexecuted at the end of the trading so we should see some more selling pressure tomorrow. PPWSA’s valuation is still at the high and now trading at 29.0X P/E in FY12, we believe that the stock will continue to see some further correction within the next few days.

SONATRA Securities were active on both the buying and selling of the shares today, they brought 20,537 shares or around 37 per cent of market volume, while they sold 14,983 shares or around 27 per cent of market volume. ACS and TYSC were also selling some today but not many shares as there were little buying interest from foreign and local investors.  

WEDNESDAY

Cambodia - Market recap 25/4/12 - PPWSA down another 4.6 per cent with only 35K shares traded today down from 54k shares yesterday.

Another lackluster day in the Cambodia Stock market as volume has disappeared. Market volume was only US$81K down from yesterday volume of US$132K. The stock closed at KHR9,250 (US$2.31) or down another 4.6 per cent.  In two days, PPWSA share price has fallen just about 10 per cent with little volume.  There were only 35,453 shares traded today and a total of nearly 100K shares being offered on the broad that were unexecuted.  This seems to indicate that there is more room for the price to fall further.  We will continue to monitor this for the next few days.

There were reports in the local press that the Cambodia Stock Exchange (CSX) has encountered trading glitches on their system.  However, we called the CSX and they indicated that they did not have any problems with the trading system.  In addition, we also called a couple of our friends in the business and they also indicated that they did not have any problems with either the bank transfer from the Cash Settlement Agent or the CSX trading system.

Cana Securities were active on buying 19,480 shares today or 54 per cent of the total volume, with ACLEDA Securities being the biggest seller of 12,133 shares or 34 per cent of the volume. 

NOTE:  Reference to securities firms buying or selling is a reference to the firms buying or selling on behalf of clients