The Securities and Exchange Commission of Cambodia (SECC) is drafting a prakas on public offerings of equity securities for holding companies to allow them to issue shares on the Cambodia Securities Exchange (CSX) in a move towards diversification and development of the nation’s capital markets.
SECC director-general Sou Socheat told The Post that consultations with relevant parties were ongoing to account for their input before the prakas is made official.
“Currently, we are conducting public consultations to get more feedback from relevant stakeholders, and we will consider any suggestions that are suitable for incorporation into the prakas prior to seeking approval.
“The draft is designed for holding companies – meaning it addresses the special cases where a company holds shares of other companies without participating directly in the business activities of the companies they are holding,” Socheat explained.
“We are creating this special procedure to enable them to issue their shares on the stock market. This new procedure will not impact existing share issuers. It is a complimentary measure to promote the issuance of securities in our capital market,” he added.
CSX vice-chairman Jong Weon Ha told The Post that as per the draft prakas, processes for Initial Public Offerings (IPOs) will not be significantly changed, but some requirements and conditions must be adjusted according to the different nature of the companies.
“This new prakas opens the door for holding companies to raise funds by listing their firms in Cambodia,” he said.
Ha emphasised the distinction that holding companies own and manage shares in other companies rather than conducting their own business operations like standard operating companies.
Existing regulations are not sufficient to cover procedures for public offerings and subsequent obligations for listing holding companies established in Cambodia, he explained.
“Therefore, the project has been initiated and has now arrived at this stage where the draft prakas is put on the table for discussion,” Ha said.
The SECC’s Socheat said a timeframe for approval of the prakas will be determined after accounting for the input from relevant stakeholders.
There are currently 13 listed firms in the Kingdom – seven with stock listings and six with corporate bond listings. According to CSX data, they had raised a combined $253 million as of September 30 last year.
The stock index rose 58.37 per cent in 2019 over 2018, only to dip 14.93 per cent in 2020.
Last year, public offerings were made by two companies listing stocks and three listing bonds. The five firms raised a combined $92 million from January to September, the data showed.