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Follow-up IPOs still on track

Follow-up IPOs still on track

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A man walks past the trading room at the Cambodia Securities Exchange last month. Photograph: Will Baxter/Phnom Penh Post

PPWSA closes higher after a week down
For the first time in weeks, Phnom Penh Water Supply Authority yesterday closed up 4.35 per cent, a sign the stock was stablising after a rough opening, insiders said.
After an eight-day price decline, PPWSA – the sole listed company on the Cambodia Securities Exchange – hit 7,200 riel (US$1.79), up from $1.71 on Friday. The volume of trading, however, increased by more than 860 per cent on Friday, with 251,705 shares traded.

PPWSA maintained momentum in volume yesterday, trading 189,537 shares, after a seven-day spell that saw an average of 29,345 shares traded. On April 26, there were 3,453 shares traded. Close to 1 million shares went unsold a day earlier. About 260,000 shares went unexecuted yesterday.

The increase in price and volume showed the beginning of stablisation for PPWSA, Bui Tuan Duong, brokerage manager at Cambodia-Vietnam Securities Plc, said yesterday.

A price between $1.74 and $1.99 would attract many investors who made unsuccessful bids during the bookbuilding process, which was 17 times oversubscribed, he said.

“I think the reason for the turnaround is the price was nearly at the [initial public offering] price yesterday. The buyers were ready. The buyer side feels safe at this price.”

Buyers yesterday were largely individuals, or retail buyers, and foreign investors sold more than they bought, he said, signifying long-term investors were not yet a strong force in the market.

Investors with long-term interests in the stock were waiting for stablisation, Han Kyung-tae, country head at PPWSA underwriter Tong Yang Securities, told the Post last week. At the time, he noted the possibility for the company to hit IPO prices this week.

Sihanoukville Autonomous Port, one of two state-owned companies slated to list on the Cambodia Securities Exchange this year, yesterday called the price decline in the country’s first publicly traded company worrisome.

The eight-day slide in price that neared Phnom Penh Water Supply Authority’s initial public offering value before climbing more than 4 per cent yesterday, however, would not affect the port’s plans to list, Director General Lou Kim Chhun said.

“We were a bit concerned [by the decline]. But I do believe the government will carefully manage the issue,” Lou Kim Chhun said. “I didn’t think of delaying the IPO even with the decline in PPWSA’s share price. What I am thinking now is to speed it up as fast as we can to follow the government’s request.”

He added that the company still planned to float shares worth 15 per cent of total assets sometime in July.

With 879,426 shares traded on its opening day, PPWSA climbed from an IPO price of 6,300 (US$1.57) to $2.53 two days later, before falling for eight days. Analysts yesterday said the price was stablising.

Telecom Cambodia (TC) director general Lao Saroeun yesterday said PPWSA’s initial decline had caused no concern at the company, which also plans to list this year.

“This is a normal increase and decrease which depends on the market. We follow the government’s decision on everything,” he said. The state-owned company has not set a timeframe for listing, but TC shares could be on the market this year, he said.

Lao Saroeun,Telecom Cambodia director general, raised no concern over the decline.

"That’s business which is normally increase and decrease depending on the market,” he said.

However, he said that the company has not set the timeframe to be listed yet. “Everything, we follow the government [Ministry of Economy and Finance’s] decision.”

But, he said that it will be possibly sometime this year.

Foreign Trade Bank, which expressed interest in listing late last month, declined to comment on PPWSA’s performance, and whether it had affected the bank’s decision to list.

Ming Bankosal, director general of the Securities and Exchange Commission of Cambodia, told the Post yesterday that PPWSA’s decline would not affect the listing of the two remaining state-own-companies.

“The [decline] was mainly based on supply and demand in the market. It is normal. I don’t think it will affect the two other state-owned companies,” he said. “What they should do is take the money from IPO and invest it back into the company to improve businesses.”

To contact the reporter on this story: May Kunmakara at [email protected]

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