Logo of Phnom Penh Post newspaper Phnom Penh Post - SME board possible this year

SME board possible this year

Live statistics are displayed at the Canadia Bank building last year in Phnom Penh during a ceremony that marked the second initial public offering to be listed on the nation’s stock exchange.
Live statistics are displayed at the Canadia Bank building last year in Phnom Penh during a ceremony that marked the second initial public offering to be listed on the nation’s stock exchange. Heng Chivoan

SME board possible this year

Market regulator Securities and Exchanges Commission of Cambodia and Cambodia Securities Exchange are looking at reducing some of the current initial public offering requirements, as a way to attract more small- and medium-size businesses to list on the flagging exchange.

At a meeting of Securities and Exchanges Commission of Cambodia (SECC) last week, Economy and Finance Minister Aun Porn Moniroth asked the regulator to review the requirements and prakas on IPO issuance, listing norms and other concerned regulations.

Mok Rady, head of research for the Securities Market Development Division Securities at the SECC, said they would evaluate the possibility of reducing certain obligations to disclose company capital and net profit from three years to just one year prior to listing.

“It is the principle that we are considering for them now.

We want to reduce our strict regulation or prakas which makes it difficult for potential companies, including SMEs, to get listed,” he said.

This would involve setting up an alternate board for SMEs to list on, separate from the main board which will continue to lure the big ticket listings.

“All of these principles are not finalised and were just discussed during the meeting,” Rady said.

The two concerned bodies will also undertake consultations with relevant stakeholder, like securities firms and the public, and aim to implement the changes this year

According to the current listing prakas, businesses with a capital of at least 5 billion riel, or $1.25 million, can list on the exchange.

Additionally, for companies with capital less than $5 million the IPO size should be at least 20 per cent of the disclosed capital and 15 per cent for companies with capital over $5 million mark.

Soleil Lamun, acting director of market operations at the exchange, said the review would also look at making the listing process cheaper and not target family-owned SMEs.

“SECC, as well as CSX, are working to bring qualified SMEs to the capital market, so that they can raise sufficient funds to improve and expand their production and their competitiveness in the market,” he added.

According to the 2011 Cambodian Economic Census, Cambodia has more than 500,000 SMEs operating in the country, a figure that represents 99 per cent of all businesses and an estimated 1.67 million jobs.

Svay Hay, president and CEO of brokerage firm Acleda Securities, said that existing requirements in the prakas were proving to be a barrier for potential companies and SMEs looking to list on the bourse.

“This is a barrier. It needs more flexibility to fit the Cambodian market and purchasing power,” he said.

CSX CEO Hong Sok Hour told the Post in March that the exchange was banking on an SME board to boost its fledgling trade volumes and improve investor sentiment.

“We are trying to set up a legal framework for companies that want to raise $1 million to $2 million, without having to pay $1 million to $2 million in total costs,” Sok Hour said at the time.

MOST VIEWED

  • No payment required for travellers taking rapid Covid tests on arrival

    Ministry of Health officials said there would be no payment required for the rapid Covid-19 tests given to travellers who arrive in Cambodia from November 15 onwards after the quarantine requirement is lifted for fully vaccinated people. Health ministry spokeswoman Or Vandine told The Post on

  • General’s gun smuggling ring busted

    The Military Police sent six military officers to court on November 22 to face prosecution for possession of 105 illegal rifles and arms smuggling, while investigators say they are still hunting down additional accomplices. Sao Sokha, deputy commander of the Royal Cambodian Armed Forces and commander of

  • More Cambodians studying in US

    The number of Cambodian students studying at US colleges and universities in 2020-21 increased by 14.3 per cent over the previous year despite the Covid-19 pandemic, according to a recent US government report. The 2021 Open Doors report on International Educational Exchange showed that 848 Cambodian students studied

  • Cambodia, Thailand to discuss border reopening

    Cambodian authorities from provinces along the Cambodia-Thailand border will meet with Thai counterparts to discuss reopening border checkpoints to facilitate travel, transfer of products and cross-border trade between the two countries. Banteay Meanchey provincial deputy governor Ly Sary said on November 22 that the provincial administration

  • Prince Norodom Ranariddh passes away at 77

    Prince Norodom Ranariddh, the second son of the late King Father Norodom Sihanouk and former First Prime Minister of Cambodia, has passed away in France at the age of 77. “Samdech Krom Preah Norodom Ranariddh has passed away this morning in France just after 9am Paris-time,”

  • Police arrest Canadian with 167kg of drugs

    The Phnom Penh Municipal Court on November 15 placed a Canadian national in pre-trial detention in connection with smuggling and possessing 167kg of illegal drugs. Deputy National Police chief in charge of anti-drug enforcement Mak Chito told The Post on November 15 that the man was arrested