Cambodia’s nascent stock exchange took another step forward on Monday with a fourth company—the country’s largest special economic zone (SEZ)—listing on the nearly 5-year-old bourse.
As Phnom Penh SEZ joined the Phnom Penh Water Supply Authority, Grand Twins International and the Phnom Penh Autonomous Port on the Cambodia Securities Exchange (CSX), officials also touted the prospect of a corporate bond market opening at the bourse in the near future.
Hong Sok Hour, CEO of the CSX, said there were healthy signs after the bell rang, with high early trading of shares in the industrial park—listed under the trading name PPSP.
“It is too early to say about the level of confidence in the new stock, but the trading volume in the beginning means there is interest,” he said. “But we need to wait and see how the interest and confidence would be during next week.”
In total, 24,078 shares traded hands on Monday in transactions totaling more than $17,000. More than 57.8 million shares were issued with the share price closing at 71.1 cents, down 3.02 percent.
Phnom Penh SEZ chairwoman Lim Chhiv Ho said the firm had listed to raise capital for a planned SEZ in Poipet—a trading hub bordering Thailand in Oddar Meanchey province—without borrowing.
“Banks in Cambodia charge very high interest rate[s] and the development of infrastructure like roads and sewage would require investment in the land without ability to take it back,” she said. “So, getting finance through this way, we would not be worried about paying interest to the banks.”
Phnom Penh SEZ raised $11.6 million during its initial public offering (IPO) last week, selling all 11,575,000 shares at the issue price of 2,860 riel ($0.713) each. In addition to the new 53-hectare SEZ it plans to build in Poipet, the firm is set to expand its industrial park in Phnom Penh.
Svay Hay, CEO of Acleda Securities, said he expected interest in the stock, which jumped 5 percent after the IPO, to remain high because of long-term confidence in the company.
“If we look at the fundamental factors, both Cambodians and other people all over the world are mostly interested in commercially partnering with the Japanese, who have a high standard that is trusted, and more than half of the companies in PPSEZ are Japanese,” he said.
Sou Socheat, director-general of Securities and Exchange Commission of Cambodia (SECC), took on Monday’s launch as an opportunity to talk up the prospects of establishing a corporate bond market in the CSX.
“And I can say that the legal framework will be completed this year and later the bond market can operate in CSX in which the issuers can be listed,” he said.
A corporate bond market would allow companies to secure debt from private investors, putting downward pressure on the high interest rates currently offered by Cambodia’s banks.
© 2016, Kang Sothear. All rights reserved.