The Cambodia Securities Exchange (CSX) is currently going over its first-ever initial public offering (IPO) eligibility review application for a company to list on its Growth Board since the secondary board was launched in 2015, its vice-chairman Ha Jong-weon told The Post on December 14.
A first listing will enlighten the Kingdom’s small and medium-sized enterprises (SMEs) to new possibilities of going public and raising funds on the capital market, he said.
“We will give them the approval notification within one month if the documents and information are completed,” Ha said, declining to provide further details before the Securities and Exchange Commission of Cambodia (SECC) had given the green light for the IPO.
He voiced confidence that the IPO would be the catalyst to spark a listing trend among leading qualified SMEs in the Kingdom.
“It also means SMEs [will now be] able to collect public funds and have their stocks traded [on] the market like big corporations do.
“Investors . . . can [now] invest in small-cap stocks on top of big-cap stocks on the main board in the CSX. It will be another historical step forward [for] capital market development in Cambodia,” Ha said.
The CSX has struggled to attract SMEs since the launch of its Growth Board in late 2015. According to SECC regulations, companies are required to have a minimum of $500,000 in operating capital to list, as compared to the $7.5 million required on the main board.
Companies that list on the platform are also required to release one year of audited financial results, whereas two years are required for bigger companies.
Additionally, the audit results must show a positive net profit or positive operating cash flow with gross profit margin of at least 10 per cent.
SECC vice-president Sok Dara told The Post recently that two SMEs were on track to list on the CSX’s Growth Board by the end of this year.
There are currently 13 listed firms in the Kingdom – seven stock-listed and six corporate bond-listed. The 13 companies have raised a combined $253 million and the stock index increased more than 57 per cent last year over 2018, CSX data show.
In the first nine months of this year, two companies listed stocks and three listed bonds. The five firms have raised a combined $92 million, the data show.