Logo of Phnom Penh Post newspaper Phnom Penh Post - Age not a factor in bourse delay




Age not a factor in bourse delay

Age not a factor in bourse delay

Dear Editor,

I was interested to read (“Stock exchange delay feared”, May 21) that Nguon Meng Tech, director of the Cambodia Chamber of Commerce, thinks one reason why the Cambodian bourse may not be opened when planned is that local business people are of “an older generation and may not understand the exchange”.

Might I suggest that many of this older generation of business people, most of whom will have shown patience and shrewdness in establishing thriving and profitable enterprises, may not be aware of the technical details of a bourse, but will have finely tuned antenna as far as risk is concerned.

To reduce financial risk as one gets older is usually taken as being a sensible move. Those who have spent a lifetime weighing up opportunities and, as important, the motives and character of those who offer new ways to make money, are much more likely to keep their wealth in gold or other tangible property.

For those who wish to maintain a reasonable level of liquidity, major Cambodian banks offer interest rates comparable with those in the West, and the tax rates are substantially lower.

A Cambodian bourse might be full to the brim with companies that meet all the criteria of the January prakas, but they would not be immune to the effects of global markets. Between May 3 and May 20, the Dow fell by 10 percent . The price of shares bought as an investment in financially sound companies that had excellent corporate governance and first-class accounting standards collapsed with the rest.

Of course, when the effect of this type of movement on the wealth of individuals is questioned, there is no shortage of financial experts to explain the reasons for a “correction”, advise that the past is no guide to the future and to assert that, in the long term, it is far better to be invest money in equities than in a deposit account.

Might I suggest that those involved with introducing the stock market develop an inexpensive education programme to be delivered all over the country that would honestly present the pros and cons of equity investment.

The negative effects of local corruption and lack of transparency would be looked at, but so too would the effects of international pressure originating through such strategies as naked short-selling.

The impact of new technology could likewise be reviewed, for, far from being in the hands of shouting men with waving arms, 60 percent of trading volume on all markets is, according to a New York-based research firm, now done by pre-programmed computers that can execute a trade in less than a millisecond. It is probable that this method was, at least partially, responsible for the dramatic falls of May 6.

I am sure that such a programme would attract a substantial number of students, who, after considering what they had learned, would be able to make informed choices about where, when and if they would invest in equity markets.

Perhaps the most valuable lesson of such a course would be based on the old Arab saying: “He who says he can predict the future is lying even though what he says may turn out to be true”.

Michael Hansen
Phnom Penh

Send letters to: [email protected] or PO?Box 146, Phnom Penh, Cambodia. The Post reserves the right to edit letters to a shorter length. The views expressed above are solely the author’s and do not reflect any positions taken by The Phnom Penh Post.

MOST VIEWED

  • Hungarian exposes 90 to Covid in Siem Reap

    The Ministry of Health has discovered 90 people who have been exposed directly or indirectly to a Hungarian man infected with Covid-19. They all are required to quarantine at home and the hospital. The ministry is searching for other affected people. Among the 90, one is the

  • PM warns of ‘new Cold War’

    Prime Minister Hun Sen said the possibility of a so-called new Cold War has become a significant concern and that all countries have to reject outright, any attempt to allow history to tragically repeat itself. He made the remarks in a speech during 75th Session

  • PM: West unfair to Cambodia

    Prime Minister Hun Sen released a message celebrating the International Day of Peace on Monday, saying that some major powers and western countries had been systemically cooperating to put political pressure on Cambodia as they did in the 1970s and 1980s. Hun Sen said pressuring

  • ‘Bad news is an investor’s best friend’ – unlocking investment potential in Cambodia

    It is time to shop. Economic woes provide good pickings for investors if they know where to look The poem If, written by English Nobel laureate poet and novelist Rudyard Kipling for his son circa 1895, is widely perceived as fatherly advice for John who would

  • Cambodia, CRF win rice battle in EU Court

    The European General Court has rejected the European Commission’s (EC) request to reject a complaint submitted by Cambodia and the Cambodian Rice Federation (CRF) regarding the EU’s reintroduction of tariffs on Indica rice exports from Cambodia. A court order uploaded to the European

  • PM requests Russia’s Covid vaccine

    Prime Minister Hun Sen has requested that Russia provide Cambodia with its Covid-19 vaccine after the former announced it planned on mass vaccinating its population next month. The request came on Thursday through the prime minister’s Facebook page as he met with Anatoly Borovik,