Local stock brokerage company Sonatra Securities has announced it will completely dilute its books and put a halt on all business activities from October 1.
In a press release posted on Sonatra’s website last week, the firm stated without an explanation that it was suspending all operations for 12 months and that all securities will be returned to investors.
“Therefore Sonatra Securities PLC will stop receiving orders from clients, close client accounts and client money accounts, and give back clients the securities, funds and other properties by September 29, 2014.”
The company stated that it will remain contactable for clients for up to two-weeks after all business activities and accounts have been closed.
While no precise reasons have been provided for Sonatra’s suspension of operations, Sok Dara, deputy director-general of Securities and Exchange Commission Cambodia (SECC), told the Post the securities firm intended to use the 12-month hiatus to undertake a “complete restructuring”.
Dara was confident that Sonatra’s decision would not negatively affect the Cambodian Stock Exchange.
“The company’s suspension, or stop operation, has so far not put any unforeseen pressure or had a negative affect on the market and listed stocks,” he said.
Soleil Lamun, deputy director of market operations department of Cambodia Securities Exchange (CSX), rallied Dara’s confidence saying Sonatra’s decision would not hamper investor sentiment in the market.
“Sonatra’s clients also have accounts in other securities firms. So without Sonatra they will keep trading using accounts in other securities,” he explained.
Sonatra’s announcement marks the second securities outfit to shut down its operations in the past 18 months after Sacombank Securities Cambodia – a subsidiary of the Vietnamese financial institution Sacombank – completely dissolved its client base and business operations in March last year.
Svay Hay, president and CEO of Acleda Securities said his firm had received numerous requests for stock broking services since Sonatra made the announcement earlier this month.
“Investors are not worried because they can instead use services from our company or others when securities firms decide to install a suspension plan,” Hay said.
Sonatra Securities could not be reached for comment.