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Securities regulator eyes digital

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The Cambodia Securities Exchange (CSX) averages 45,000 shares to the value of $55,000 in daily trading. Hean Rangsey

Securities regulator eyes digital

The Securities and Exchange Regulator of Cambodia and Cambodia Securities Exchange (CSX) have vowed to use an online system to facilitate business transactions as well as to keep the market afloat amidst economic uncertainty brought about by the Covid-19 pandemic.

Sou Socheat, director-general of the regulator, which recently changed its name from the Securities and Exchange Commission of Cambodia (SECC), told The Post on March 11 the regulator is optimistic about adopting a digital platform to facilitate internal and external workflows.

“We set up the online mechanism in April 2020 and are continuing to use it internally and with relevant stakeholders in order to manage a smooth” transition when the time comes to officially adopt it, he said.

He said facilitating the use of “digital documents has helped us a lot, especially in mitigating the challenges posed by the Covid-19 pandemic and inhibited delays in work delivery”.

The use of digital connectivity through various online mechanisms has “allowed us to conduct seminars, meetings and dialogues with other associated regulators within the ASEAN region and beyond”, he added.

He cited a major virtual meeting of ASEAN stock market regulators held on March 15 last year as an example, where important regulatory issues concerning the region were discussed at a time when travel was restricted.

While the Kingdom’s securities regulator may allow documents to be submitted in soft-copy format, Socheat stressed that there were no plans to stop accepting hard-copy documents.

With confirmed Covid-19 cases rising to 1,163 to date in Cambodia – most of which stem from the February 20 community transmission, the adoption and wider use of a digital platform may well come into play sooner than expected for CSX and the securities regulator.

CSX vice-president Ha Jong-weon recently told The Post that in the worst case scenario of a widespread lockdown in the capital, the CSX – as the stock market operator – anticipates that the local bourse will be able to continue trading as long as cash settlements can be made digitally through online banking transactions.

He said the CSX has held discussions with stakeholders and industry regulators on back-up mechanisms – including platforms available on the digital sphere – to enable the stock-market operator to run business as usual regardless of any drastic measures imposed by authorities to prevent the spread of the pandemic.

“We try our best to ensure investors are able to make [critical] investment [assessments], decisions and execute their actions at any time they want”, especially in light of ever-changing market forces, Ha added.

Averaging 45,000 shares to the value of $55,000 traded every day, investor confidence in the local bourse has remained fairly stable even during the latest outbreak, with the CSX index experiencing a slight drop of five points or 0.8 per cent.

Ha believes that investor confidence in CSX is partly due to information that the bourse digitally disseminates to investors. “I think our investors [will] start trading more based on fundamental and technical analysis.

“Smart investors will look for better performing stocks. If the situation continues, investors may switch from companies that are more affected by current events to less affected ones,” he added.

At present, there are 13 listed companies on the bourse – seven stock-listed and six corporate bond-listed. As of September 30, the 13 companies have raised a combined $253 million and the stock index increased more than 57 per cent in 2019 compared to the previous year, only to dip 14.93 per cent in 2020, CSX data show.

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