Logo of Phnom Penh Post newspaper Phnom Penh Post - Senate passes draft law on Gov’t Securities

Senate passes draft law on Gov’t Securities

Content image - Phnom Penh Post
The Cambodia Securities Exchange may soon see the addition of government securities. Hong Menea

Senate passes draft law on Gov’t Securities

The Senate on December 21 approved on the Draft Law on Government Securities which allows the government to prepare bonds to issue in the capital market to collect funds from the public for the country’s development.

Insiders hope the government will promulgate the law next year.

The 57 senators unanimously approved the bill at the 6th Senate Session on December 21 after the bill was greenlit at a Cabinet meeting presided over by Prime Minister Hun Sen early in September.

Government securities are a vital financial tool for governments to raise financing from the domestic private sector and from abroad for socio-economic development, according to the minutes of the meeting.

The final version of the draft bill states: “The bill aims to provide a common framework for the management on issuance, trading, and the efficient, accountable and transparent management of government securities.

“[It] also [aims] to ensure the sustainability of the public debt management including the enhancement of the cash need of the government; the response to the financial need for the development of economy and society; the development of the capital and financial market; and the support of the necessary and priority projects.”

Securities and Exchange Commission of Cambodia director-general Sou Socheat said government securities are a new financial instrument which he believes will soon list on the Cambodia Securities Exchange (CSX).

He said: “Once listed on the Cambodia Securities Exchange, it’ll provide the market a new complementary instrument for trading as in our neighbouring countries, especially Vietnam – their government-bond trading is very active.

“We do hope that once we have the issuance of the government securities, the government will decide to list them on the CSX, allowing all public investors to invest.”

CSX vice-president Ha Jong-weon told The Post that the senate’s approval of the draft law shows state bodies’ commitment to the development of the securities sector in Cambodia.

He said: “We have seen that all the stakeholders have been working tirelessly to bring this draft law to the table and now the draft is already approved.

“We expect that the law will be promulgated and put into use in the coming 2021, meaning that there will be one more crucial investment alternative for both the individual and institutional investors.

“The CSX, one of the main stakeholders in the securities market, is delighted for this good news and hope that this milestone will play a very important role for the future of the market as a whole.”

He explained that “government securities” are a type of debt obligation that is offered by governments to raises fund from the public for any public development project.

“Government securities” come with lower risk compared to the other debt instruments, he said, adding that investors such as pension funds, securities funds, insurance companies and commercial banks seek to invest in them since they are backed by the government and represent the national economy.

“Government securities will play a vital role in securing the government cash flows and will become another source of fund to support government development projects that help reduce reliance on existing sources like foreign borrowings,” Ha said.

There are currently 13 listed firms in the Kingdom – seven stock-listed and six corporate bond-listed. The 13 companies have raised a combined $253 million.

MOST VIEWED

  • With herd immunity likely in 2022, is Cambodia ready to reopen for tourism?

    The government aims to inoculate 80 per cent of the target population by June next year, giving it a head start among regional peers to reboot the sector but first, it has to do a few things to up its game A sign on a glass

  • US wants 'full access' to Ream Naval Base

    On June 11, the US embassy's Defense Attaché Colonel Marcus M Ferrara visited Ream Nava Base in coordination with Cambodian officials following the recent approval of Prime minister Hun Sen to allay the concerns on Chinese military presence at the base as raised by US Deputy

  • US embassy guard gets Covid despite two doses of Pfizer jab

    The Covid-19 tracking commission on June 4 said a security guard at the US embassy in Phnom Penh had contracted the novel coronavirus, despite having received a second dose of the Pfizer-BioNTech shot two weeks ago. Embassy spokesperson Chad Roedemeier confirmed the SARS-CoV-2 infection to The

  • Jab drive heading to 5 provinces

    The government is set to vaccinate more than 1.2 million people in five provinces after finishing with Phnom Penh and neighbouring Kandal in an ongoing campaign administered by the ministries of Health and National Defence. The five provinces are Preah Sihanouk, Kampong Speu, Takeo, Kampong Cham

  • New immigration bill targets illegal foreigners in Kingdom

    General Department of Immigration (GDI) officials are discussing revisions to the new draft law on immigration to prevent foreigners from entering Cambodia illegally and to supervise those living in the Kingdom more effectively. The revisions draw wide support among civil society organisations. GDI director-general Kirth

  • Kingdom set to be a gold producer

    Cambodia will soon join the roster of gold producing countries after the government announced the commencement of commercial gold mining operations in the Okvau area in southwestern Mondulkiri province's Keo Seima district from June 21. Prime Minister Hun Sen on June 10 announced that after 14 years of