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

  • Joy as Koh Ker Temple registered by UNESCO

    Cambodia's Koh Ker Temple archaeological site has been officially added to UNESCO’s World Heritage List, during the 45th session of the World Heritage Committee held in Riyadh, Saudi Arabia, on September 17. The ancient temple, also known as Lingapura or Chok Gargyar, is located in

  • Famed US collector family return artefacts to Cambodia

    In the latest repatriation of ancient artefacts from the US, a total of 33 pieces of Khmer cultural heritage will soon return home, according to the Ministry of Culture and Fine Arts. In a September 12 press statement, it said the US Attorney’s Office for the

  • Tina rebuffs ‘false claims’ over falling paddy price

    Agriculture minister Dith Tina has shed light on the trade of paddy rice in Battambang – Cambodia’s leading rice-producing province – in a bid to curb what he dubs a “social media fact distortion campaign” to destabilise the market. While acknowledging that the prices of paddy

  • Cambodia set to celebrate Koh Ker UNESCO listing

    To celebrate the inscription of the Koh Ker archaeological site on UNESCO’s World Heritage List, the Ministry of Cults and Religion has appealed to pagodas and places of worship to celebrate the achievement by ringing bells, shaking rattles and banging gongs on September 20. Venerable

  • Kampot curfew imposed to curb ‘gang’ violence

    Kampot provincial police have announced measures to contain a recent spike in antisocial behaviour by “unruly’ youth. Officials say the province has been plagued by recent violence among so-called “gang members”, who often fight with weapons such as knives and machetes. Several social observers have

  • PM outlines plans to discuss trade, policy during US visit

    Prime Minister Hun Manet is set to meet with senior US officials and business leaders during his upcoming visit to the US for the UN General Assembly (UNGA), scheduled for September 20. While addressing nearly 20,000 workers in Kampong Speu province, Manet said he aims to affirm