Bourse Needs Plan, Not Launch Date, Experts Say

When talk of a stock exchange in Cambodia first commenced, the initial hope among members of the government was for it to open by 2005.

Then in 2004 the central bank, having realized that a copious am­ount of lawmaking was needed to regulate the bourse, said that 2007 would be the year when listed companies would be able to start trading stock. But that deadline was missed as members of the private sector started to express concerns that Cambodia’s auditing and ac­countancy standards were a long way off the mark.

Cambodia’s bourse was next earmarked for Sept 9 last year, with off­icials hoping to dovetail with the auspicious date of 09-09-09, but that plan was soon dropped when Prime Minister Hun Sen announ­ced that the onslaught of the global financial crisis meant further de­lays for the exchange.

Government officials have since played ping-pong with various target dates for a launch, and earlier this week settled on July next year, said Chea Pheng Cheang, secretary of state at the Ministry of Fin­ance, yesterday.

But after so many “definitely-may­bes” from the government, announcements over launch dates for the stock exchange now fall on deaf ears, business leaders say.

“Because they delay a few times already, then the date is no longer important for me,” said In Channy, CEO of Acleda Bank, whose company is widely expected to be among the first private companies to list.

Mr Channy said the sheer enormity of the challenge that lawmakers had in drafting up regulations to operate the stock market had crippled its ability to launch on a given deadline.

“Before we can talk about meeting a deadline we should come up with an action plan,” he said. “We should set a date for each prakas [government proclamation] and then meet that deadline.”

Not only does the government still have laws to draft to regulate the bourse, but most potential companies also still need instruction on how to meet all the necessary requirements set out by the government before listing.

“Instead of putting the date we should lay out the work plan they want to finish and the activities that need to be done,” said Kang Chandararot, president of the Cambodia Institute for Development Study.

“It’s better if the progress of the stock exchange can be transparent to the public in terms of cooperation and what kind of law and requirements need to be done.”

Mr Chandararot added: “It’s better to have something very technically explained from the government about the progress of preparations.”

“Then the private sector can react to this and we can make sure that the private sector is ready to participate.”

In Pyo-lee, director of the Korea Exchange, which holds a 45 percent stake in the future Cambodia Stock Exchange, said earlier this month that the main deterrent to opening the stock market before the end of this year was the lack of private sector confidence that a stock market is yet possible in Cambodia.

Kith Meng, chairman and CEO of Cambodian conglomerate The Royal Group, said that despite constant delays the government would likely reach its latest objective of opening the bourse in July next year.

“There is always issues you cannot foresee. That’s why there has been a delay,” he said. “I’m sure they will achieve their objective.”

Mr Meng added that the year-long run up to the supposed launch will give the government time to engage the private sector in the processes involved to list and spread awareness on the market’s regulatory requirements.

 

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