Bourse Launch Will Be Shy at Least 2 Firms

least two of the three state-owned companies planning to list on Cambodia’s stock market will not be ready for its scheduled launch in July due to difficulties in complying with bourse regulations, a securities underwriter said yesterday.

Though this marked the first con­firmed delay for companies planning to list, investors yesterday said that there was little surprise that the July target date would not be met due to the complexity of privatizing a state-owned firm.

Despite the delay, the official launch date for the bourse is still in July, according to the Cambo­dia Securities Exchange.

Han Kyung-tae, managing di­rector for Tong Yang Securities, which is preparing the initial public offering for both the Phnom Penh Water Supply Authority and Telecom Cambodia, said both com­panies would not be ready to list come July.

“I think the general consensus on the date for the first IPO is near the end of this year,” he said, adding that delays were partly due to difficulties in educating company workers on standards in corporate governance. “There is much more work to do than we had expected.”

Mr Han explained that coordinating the work between issuers, government authorities and other third-party advisers had meant that more time would be needed to list the companies.

The government has also confirmed that Sihanoukville Autonomous Port is preparing an initial public offering with Japan’s SBI Holdings acting as the underwriter. Officials at the company did not respond to e-mailed questions yesterday.

Ming Bankosal, general director of the Securities and Exchange Commission of Cambodia, referred questions to the stock exchange and to the Finance Ministry, saying he was unaware of any delay the state-owned companies may be experiencing.

Min Kyoung-hoon, vice chairman of the Cambodia Securities Exchange, said yesterday that the bourse would open in July once the installation of IT systems at its home inside Phnom Penh’s Canadia Tower is completed.

Offering a reason why the state-owned enterprises could delay listing, he wrote in an e-mail that companies with the potential of listing have “no experience” in preparing an initial public offering.

According to SECC regulations, listed companies must disclose information on everything from profits and cash flow to risk and total assets before they can legally make a public offering.

Companies are also required to disclose the identities of any person holding more than five percent of company shares, as well as levels of indebtedness and historical financial information.

News of the delay comes as investors and officials from the region are set to meet in Singapore today for a conference designed to provide investors with information on both Lao and Cambodian stock exchanges.

Investors say delays will not be surprising given the complexity of privatizing companies and listing them on the market.

“I think few people expected the exchange to open on schedule and this will probably not surprise the market,” said Douglas Calyton, CEO of the private equity fund Leopard Capital. “It isn’t a race to get the exchange open quickly but rather to make sure it is ready to run properly.”

Mr Clayton added that Leopard–which has already participated in the initial public offering of Electricite du Laos Generating Co on the Lao bourse–would probably be interested in seeing some of the companies in which it has already invested, such as Acleda Bank, list on Cambodia’s stock market.

Svay Hay, managing director of Acleda Securities, which will operate as a broker on Cambodia’s bourse, said that for companies that already have high corporate standards it would take somewhere between three and six months to prepare an initial public offering.

However, he said that, for companies with little background in corporate governance or accounting, it could take up to two years to become listed.

“For state-owned enterprises going private it needs time and there are many technicalities to consider,” he said.


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