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

  • Hong Kong firm done buying Coke Cambodia

    Swire Coca-Cola Ltd, a wholly-owned subsidiary of Hong Kong-listed Swire Pacific Ltd, on November 25 announced that it had completed the acquisition of The Coca-Cola Co’s bottling business in Cambodia, as part of its ambitions to expand into the Southeast Asian market. Swire Coca-Cola affirmed

  • Cambodia's Bokator now officially in World Heritage List

    UNESCO has officially inscribed Cambodia’s “Kun Lbokator”, commonly known as Bokator, on the World Heritage List, according to Minister of Culture and Fine Arts Phoeurng Sackona in her brief report to Prime Minister Hun Sen on the night of November 29. Her report, which was

  • NagaWorld union leader arrested at airport after Australia trip

    Chhim Sithar, head of the Labour Rights Supported Union of Khmer Employees at NagaWorld integrated casino resort, was arrested on November 26 at Phnom Penh International Airport and placed in pre-trial detention after returning from a 12-day trip to Australia. Phnom Penh Municipal Court Investigating Judge

  • Sub-Decree approves $30M for mine clearance

    The Cambodian government established the ‘Mine-Free Cambodia 2025 Foundation’, and released an initial budget of $30 million. Based on the progress of the foundation in 2023, 2024 and 2025, more funds will be added from the national budget and other sources. In a sub-decree signed by Prime Minister Hun Sen

  • Two senior GDP officials defect to CPP

    Two senior officials of the Grassroots Democratic Party (GDP) have asked to join the Cambodian People’s Party (CPP), after apparently failing to forge a political alliance in the run-up to the 2023 general election. Yang Saing Koma, chairman of the GDP board, and Lek Sothear,

  • Cambodia's poverty cut in half from 2009 to 2019: World Bank report

    A report published by the World Bank on November 28 states that Cambodia’s national poverty rate fell by almost half between 2009 and 2019, but the Covid-19 pandemic recently reversed some of the poverty reduction progress. Cambodia’s poverty rate dropped from 33.8 to 17.8 per cent over the 10