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Stock exchange delay feared

Stock exchange delay feared

Business leader predicts a five-year wait, but officials say the CSX is on track

BUSINESS representatives fear the launch of Cambodia’s new stock exchange could be years away, despite official assurances that the bourse is on track for 2010.

On Thursday, businessmen expressed concern that Cambodia may not be ready for the launch of a stock exchange, which is slated to open later this year.

Nguon Meng Tech, director general of Cambodia Chamber of Commerce, said that it may take at least another five years for Cambodia’s bourse to be up and running.

“For my point of view, Cambodia is still not ready. In 2015, if it’s ready, I would appreciate [the CSX], but I think in 2015, it may be just the start [of the bourse] not the full swing.”

According to a January prakas, or edict, on corporate governance the main criteria for listed companies are corporate governance, accounting standards and financial soundness.

Nguon Meng Tech said the main challenge for the CSX is that local businesspeople are of an older generation and may not understand the exchange, and that corruption and a lack of transparency remain problems in tax payments.

“To tackle this issue, the government should be strict on the measures to collect taxes, not giving a chance for officials to commit corruption. When the rampant corruption still exists, the bourse may not happen ever,” he said.

Chan Sophal, president of Cambodia Economic Association, said he believes that a minority of companies have enough qualifications for listing, with transparency levels and accounting standards proving a challenge for the upcoming market.

But officials were quick to reassure the business community that plans are on track.

“People are still sceptical that the market can launch on the schedule. All I can say is that everything is on the schedule right now. The Cambodia
Securities Exchange (CSX) is targeted for the end of this year,” said Inpyo Lee, project director of Korean Exchange, which holds 45 percent stake in the CSX in a joint-venture with the government, on Thursday.

He said that important infrastructure had almost been completed and public awareness of the stock market has been increased. “Rules and regulations relevant to the operations of the stock have almost in place,” he said.

But uncertainty remains. The construction of CSX building in Phnom Penh has not yet begun, due to disagreement on designs. The selection of securities firms and securities representatives to be listed has yet to be finalised and the CSX has not applied for an operation licence from the
Securities and Exchange Commission of Cambodia (SECC).

A source at Phnom Penh’s CAMKO City, who preferred to remain nameless, said Thursday that the construction of the stock market building on the site has not commenced.

“I see that nothing has changed so far. There are no construction activities yet on the land plot reserved for the stock market building,” said the source.

Inpyo Lee said that he was unaware of the construction, stating that it was the responsibility of the Cambodian government. He added that he said that the building was not important, as the CSX can rent other space for its launch.

“We are preparing the documents to apply for an operating licence from SECC. We have registered the CSX at the Ministry of Commerce in April already,” he added.

Ming Bankosal, SECC’s director general, said Wednesday that he was unaware of the latest development of the stock market building construction and referred question to Hong Sok Hour, CSX’s general director, who did not answer repeated calls on Wednesday and Thursday.

In early March, SECC announced that 22 companies had applied for a licence on the exchange. It was hoped a short list would be drawn up within the month.

“There’s a pile of documents to be read carefully, and we hope the number and names of the companies set to be licensed would be released in mid-June,” said Ming Bankosal said.

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