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PPWSA surges on Cambodian Securities Exchange

PPWSA surges on Cambodian Securities Exchange

120730_07

People stand inside the trading room at the Cambodia Securities Exchange in April. Photograph: Will Baxter/Phnom Penh Post

After 20 days of trading within 100 riel (US$0.025) of its initial offering price, investors have breathed some life back into Phnom Penh Water Supply Authority, the sole company listed on the Cambodia Securities Exchange.

PPWSA trading volume hit 63,110 shares on Friday, a two-month high for the four-month-old market.

The company closed up 3.03 per cent at 6,800 riel.

Brokers at Cambodia-Vietnam Securities (CVS) said there are signs of returning confidence in state-owned PPWSA, as well as potential regulatory changes on the horizon.

The low but stable price of the company has had a positive “psychological” effect on traders, according to a CVS report issued late last week.

“That's the reason there was an increase in demand for bidding for PPWSA” on Thursday and Friday of last week, according to the report.

Retail investors, which have dominated the market, largely used personal capital to invest in the company as opposed to borrowing – a characteristic that should relieve investors of debt pressure and keep them from selling when the price drops, the report said. Short selling was almost nil.

The price-step on the CSX is 50 riel, a set increment that the Securities and Exchange Commission of Cambodia may lower to 10 riel, according to CVS.

Price matching, which at present is updated after each of the two daily trading sessions, could become continuous, something brokers have pushed for since trading began in mid-April.

While the company had performed “better than Facebook”, according to some Cambodian officials, PPWSA hit its initial price of 6,300 riel on July 10. It dipped just below the price for one day in mid-July.

The Ministry of Industry, Mines and Energy retired the state-owned enterprise’s general director at the beginning of the month.

The departure of Ek Sonn Chan, hailed as the mastermind behind the company's efficiency, had little effect on trading. Sim Sitha, former director of Sihanouk Water Supply, took control of the firm on July 1. Ek Sonn Chan was with PPWSA for 20 years.

Several companies – state owned and private – have expressed interest in listing during the past four months.

At least eight firms have publicly announced intentions to go public. Insiders have said an increase in listed companies would bring investor attention back to the CSX.

To contact the reporter on this story: Don Weinland at [email protected]

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