After weeks of unremarkable trading days, locally-owned Acleda Bank Plc (ABC) and state-owned utility Phnom Penh Water Supply Authority (PWSA) have undergirded an unexpected bounce in the stock market from last Wednesday.
The highlight of the period was July 31, when PWSA logged its highest-ever daily trading value of 7,949,427,920 riel ($1.9 million), with 1,589,770 shares traded, since it began trading on April 18, 2012.
The Cambodia Securities Exchange (CSX) index hiked 3.8 per cent from July 29’s 640.48 points to close at 664.88 points on Tuesday.
ABC’s share price rose 800 riel ($0.20) or 4.8 per cent from July 29 to close at 17,300 riel on Tuesday for a market capitalisation of 7.494 trillion riel, with 259,557 shares traded worth 4,618,631,080 riel. On July 30 alone, 133,552 shares were traded, worth 2,375,569,460 riel.
PWSA’s share price rose 200 riel ($0.05) or 3.6 per cent from July 29 to close at 5,700 riel on Tuesday for a market capitalisation of 495.747 billion riel, with 1,605,923 shares traded worth 8,040,325,780 riel.
PWSA noted that individual investors accounted for six million riel of the nearly eight million riel trading value posted on July 31. Negotiated trade orders by institutional investors accounted for the rest.
It said the July 31 negotiated trade orders “were the first transactions on the CSX to be settled in US dollars. They were handled by Yuanta Securities (Cambodia) Plc”.
It explained that investors can execute large trades in Cambodian riel and then opt to settle in US currency to hedge exchange rate risk.
“The exchange rate used to determine the US dollar equivalence is the rate issued by the National Bank of Cambodia one working day before the trading date.
“US dollar settlements are only allowed for stock trading through the negotiated trading method [NTM], in which the buyers and sellers agree to a transaction in the US currency,” PWSA said.
CSX vice-chairman Ha Jong-weon told The Post on Tuesday that uncertainties associated with Covid-19 have jolted the Kingdom’s economy and stock market.
But basic stock market statistics do not paint a full picture of stock market variations, he warned.
Ha said: “ABC’s price has gradually fallen since it reached its peak a week after listing, down to nearly its IPO [initial public offering] price on Wednesday last week which triggered renewed demand.
“A large volume of retail bid orders pushed ABC’s price up. On the other hand, the record breaking NTM trade of PWSA of nearly two billion riel between institutional investors also had a positive impact on retail trade, dragging the price up for three consecutive days.”
He noted that crises are magnets for speculators who are eager to make a profitable bet. “That is why the stock market is where investors can make money either during ups and downs” in global trade and economic earthquakes.
Ha said: “Investors should be flexible and respond to changes wisely. There’s always a way that works out.
“For example in such a situation, investors may eye on investing in less vulnerable companies such as PWSA whose business is not affected by the pandemic as people still need to drink water and take showers.”
As of the end of June, there are 12 listed firms in the Kingdom – six stock-listed and six corporate bond-listed. The 12 companies have raised a combined $240 million.
CSX’s market capitalisation rose to $2.57 billion, 4.5 times higher than last year while the index also rose 12 per cent over the same period.