Logo of Phnom Penh Post newspaper Phnom Penh Post - Cambodia’s bourse sees record low volume

Cambodia’s bourse sees record low volume

Cambodia’s bourse sees record low volume

In the frenzied run-up to the national election Sunday, Phnom Penh has been the site of concerts, rallies and streets packed with campaigners. But the energy hasn’t spread to the halls of the Cambodia Securities Exchange.

At the close of trading Tuesday, five business days had elapsed without a single share bought or sold, the longest drought since the exchange, or CSX, first offered Phnom Penh Water Supply Authority stock in April 2012. The run lasted from July 17 until the 23 — not counting the weekend in between when the bourse shuts. Volume picked back up at the close yesterday, when 100 shares moved at a price of 6,300 riel ($1.58), unchanged from Tuesday.

Explanations for the slump differ, as explanations for why the exchange is performing poorly usually do. CSX officials say that the dearth of activity is a natural by-product of the election campaign that started on June 27, when business takes a back seat to politics. But analysts disagree, arguing that prices were too high for what buyers were willing to pay.

Because only one company is listed, it is also not abnormal for the exchange to go a few days with no activity. But this month was worse than others. In addition to the five-day slump, there was also no volume on July 1, 8, 10, and 11. A combined nine days passed in July with zero trading, a record in the short history of the exchange.

Soleil Lamun, deputy director of the market operations department, said that within such market conditions, with only one stock listed for more than a year, people can lose interest over time.

“The recent low trading can be seen as unusual. It is likely related to the pre-election events,” Lamun said.

As for whether this is a sign of more to come: “We cannot say [investors] have abandoned their appetite for the market in the future. We are convinced that they are opting for the wait-and-see position, and we remain optimistic as always that the market activities will recover and grow forcefully once more companies come on the CSX’s list. And this could be seen from the end of the year onwards. Of course, the market would fail if the current situation persisted for a few more years.”

Stephen Hsu, CEO of underwriter Phnom Penh Securities, said the non-trading had nothing to do with the election but was instead a matter of pricing. During the sluggish month, the lowest offered price for water authority shares was 6,300 riel — the same as the original IPO price — while the highest bid value was only 6,200.

“It is not caused by the election, since this issue has occurred several times in the market,” he said, adding that if the situation continues, the CSX and all companies in the securities business here will face bankruptcy.

Ming Ban Kosal, director general of the Securities Exchange Commission of Cambodia, which regulates the sector, said the slowdown is due to investors, who are busy campaigning, and a reluctance to buy until results of the elections are known.

“If there is any problem, we will take some actions [to improve the situation],” he said, referring to possible incentives for investors to buy.

Nearly two years after the country’s landmark bourse launched in July 2011 — although the first public offering wasn’t until April the next year — only one company has listed: the state-owned Phnom Penh Water Supply Authority.

Two other state-owned enterprises, Telecom Cambodia (TC) and the Sihanoukville Autonomous Port were expected to join the utility.

The port, however, is still working on its IPO, and in March, TC’s plan to list was derailed following an alleged embezzlement scandal and a shake-up at its top levels.

MOST VIEWED

  • Cambodia armed with money laundering laws

    Money laundering will now carry a penalty of up to five years in prison while those convicted of financing terrorists will be jailed for up to 20 years, according to new laws promulgated by King Norodom Sihamoni and seen by The Post on Thursday. Comprising nine

  • Schools to be reopened in ‘three stages’

    With guidance from Prime Minister Hun Sen, the Ministry of Education, Youth and Sport, is in the process of reopening schools in three stages. But no timeline has been set, ministry spokesperson Ros Soveacha said on Thursday. Soveacha said the first stage will be to

  • Thai border crossings eased

    The Cambodian Embassy in Thailand said in an announcement on Wednesday that Thailand’s government has allowed certain passengers from several countries to enter its borders. The visitors must go back to their country immediately after their duties in Thailand are fulfilled, the embassy said.

  • Gov’t says tourism recovers slightly despite pandemic

    The Ministry of Tourism and the Phnom Penh municipal administration have recognised 33 tourism businesses in the capital which have consistently implemented safety measures for tourists and adhered to the code of conduct issued by the ministry. Recently, the ministry announced that tourism businesses had to

  • Mull ASEAN border opening, PM urges

    Prime Minister Hun Sen has requested that ASEAN launch a scenario for gradually reopening cross-border travel and trade between countries in the region. He said ASEAN has had more success combating Covid-19 compared to other regions. The prime minister’s request was made at the

  • Ministry reports 11 new Covid-19 cases, reiterates vigilance

    Minister of Health Mam Bun Heng has urged people to continue practising virus prevention techniques after 11 people tested positive for Covid-19 within two days after arriving in the Kingdom. Speaking on Sunday, Bun Heng stressed the importance of washing hands, wearing masks or scarves when

  • Nine on Indonesia flight Covid-19 positive

    The Ministry of Health on Saturday confirmed nine more imported cases of Covid-19. The nine ‒ eight Cambodians and one Indonesian, aged 22 to 26 ‒ arrived in Cambodia on Thursday via a direct flight from Indonesia and are receiving treatment at the Khmer-Soviet Friendship Hostipal in Phnom Penh.

  • Kingdom’s financial sector healthy

    Cambodia's financial sector remains on a sustainable growth path despite the Covid-19 pandemic squeezing crucial industries, National Bank of Cambodia (NBC) governor Chea Chanto said. Tourism, garments and footwear have borne the brunt of the Covid-19 impact, he said, whereas the financial and agriculture sectors

  • Vietnam told to remove border tents

    Kandal provincial governor Kong Sophoan has ordered local authorities to prohibit the construction of buildings in areas bordering Cambodia and to report any irregularities immediately. Recently, Vietnamese officials removed another seven tents from the border area with Cambodia. His remarks were made on Wednesday afternoon

  • Migrant workers set to return from Malaysia

    The Ministry of Foreign Affairs and International Cooperation confirmed on Thursday that 158 Cambodian students and migrant workers will fly home from Malaysia on Friday morning. This is the second flight to bring Cambodians home from Malaysia. A ministry notice said Malaysia Airlines Flight MH754 will