The public offering of securities is the most effective option for a company to gain access to capital. Photo supplied
To respond to growth in the global economy, the expansion of business operations and market share becomes the main strategy for a company.
To support these activities, seeking additional capital or financing becomes the priority factor that companies should always take into consideration.
A company can get access to capital or financing through many means, of which the public offering of securities is the best and most effective option.
As well as getting additional capital for future development and strengthening capital structure, a company can enjoy further tremendous benefits.
These include obtaining long-term capital in large amounts and attracting local and foreign investment partners, segregating risk and improving corporate governance and management.
It can also enhance the market value of the company and open up the company’s horizontal expansion to the public, attract and retain employees, provide liquidity for shareholders and improve the company’s reputation.
The public offering of securities refers to the process of raising capital or obtaining financing from public, arising from the public offering of equity or debt securities.
The first-time offering of securities is referred to as an initial public offering (IPO).
There are currently two types of market on the Cambodia Securities Exchange (CSX), the stock market and the bonds market. The stock market will be discussed in this article.
The stock market is divided into two, namely the main board and the growth board.
The main board market was the first to be established on the CSX. It allows a company with at least 30 billion riel (around $7.5 million) of shareholder equity to be eligible for the listing of its securities.
There are presently seven listed entities – six companies and one bank.
The growth board market refers to the market that allows small and medium enterprises (SMEs) or any other company to seek capital or additional financing from the public.
According to data from the Ministry of Industry and Handicrafts, the total number of business enterprises in Cambodia as of last year was around 510,000, of which more than 90 per cent were SMEs with capital of $500,000 at most.
Seeing such potential growth and aware of certain challenges, the Securities and Exchange of Commission of Cambodia (SECC) has simplified the requirements for the offering of equity securities to provide the possibility for SMEs to raise capital from the public.
Prepared by: Securities and Exchange Commission of Cambodia
Securities Issuance Supervision Department
E-mail: [email protected]
Phone: 023 885611
Disclaimer: This article has been compiled solely for informative and educational purposes. It is not intended to offer any recommendations or as investment advice. The Securities and Exchange Commission of Cambodia is not liable for any losses or damages caused by using it in such a way.
