Logo of Phnom Penh Post newspaper Phnom Penh Post - Experts and bourse players react

Experts and bourse players react

Experts and bourse players react

THE decision to list in riel will likely have little impact on the success of the Cambodia Securities Exchange, provided the NBC ensures a relatively stable riel-dollar exchange rate, according to a currency expert.

Late last week, the Securities and Exchange Commission of Cambodia announced that firms would be listed in riel only on the exchange, but would allow settlement in either the dollar or the riel for the first three years.

Asian Development Bank Office of Regional Economic Integration Principal Economist Jayant Menon wrote that the currency of settlement – rather than the currency of listing - was the “critical variable”.

“As long as the NBC [National Bank of Cambodia] can ensure a relatively stable riel-dollar exchange rate, which it has been doing particularly recently, then listing in riel should not matter much,” he said.

There could initially be some negative psychological impact on potential foreign investors, he said, but it should dissipate especially with the decision to leave open the currency for settlement.

“One should not overplay the role of the currency in ensuring the success or otherwise of the new exchange,” Menon wrote, adding other factors such as accounting standards, macro and political stability, and institutional development would be more important.

“A successful stock exchange will help the process of dedollarisation in the long run. The currency in which stock prices are quoted will hardly matter.”

Meanwhile, future actors in the stock exchange added their reaction to the decision yesterday. Kuy Bat, chairman at approved underwriter Phnom Penh Securities, said he supported the decision to use the riel for listings, but it could initially impact foreign investment on the exchange.

“It may have a slight impact for investors at the initial stage, but won’t impact the whole [economy],” he said. He added the decision to list in domestic currency was in line with most countries around the world.

Telecom Cambodia Director General Lao Saroeun said yesterday the firm followed the government’s lead regarding listing on the exchange.

“I agree with the government’s decision” he said.

While Phnom Penh Water Supply Authority assistant to director general Chea Visoth supported the government’s choice. “We can promote our local currency,” he said.

MOST VIEWED

  • Kingdom may hire Turkish power ship

    Cambodia is considering negotiating with Turkey to hire a 200MW-capacity power ship to meet electricity demands as the country faces an ongoing electrical shortage, according to the prime minister. Speaking to garment workers in Pursat province on Wednesday, Prime Minister Hun Sen said Electricite du

  • ‘Kingdom lacks up to 400MW in available electricity’

    Prime Minister Hun Sen has called on the general public, hoteliers and businesspeople with generators to use them as back-up as the Electricity Authority of Cambodia cannot generate enough electricity to meet needs due to low water levels in power station reservoirs. On Saturday evening

  • EDC tackles power shortfall

    Electrcite Du Cambodge (EDC) on Monday issued a statement updating the public on its efforts to tackle insufficient electricity supplies during the ongoing dry season. Reductions in electricity prices have resulted in a steady increase in consumers in the Kingdom, while local and international investors

  • African swine fever spreads to VN-Cambodia border

    African swine fever has spread to parts of Vietnam that border Cambodia’s Ratanakkiri and Kratie provinces, a Ministry of Agriculture, Forestry and Fisheries official said on Friday. Tan Phannara, the General Directorate of Animal Health and Production director-general, told a Phnom Penh workshop that