Despite plans to have it up and running by the end of the year, the world financial crisis may delay the establishment of a Cambodian stock market, Prime Minister Hun Sen said Monday during an investors conference in Siem Reap.
A delay would help Cambodia avoid the “anarchy” and tumbling stock prices in other stock markets around the world, he said in nationally broadcast comments .
“If the world stock markets are still in anarchy, should we follow the plan in 2009 or not?” he asked. “If the stock market is born to die we should not establish it at this time.”
The conference, which was closed to the public, was organized by Economist Conferences, which is owned by the same company that publishes The Economist magazine.
Hun Sen’s statement about the stock market comes a month after Finance Minister Keat Chhon and another Finance Ministry official insisted that there would be no delay in the stock market’s opening.
In-pyo Lee, the Phnom Penh-based project manager for the Korea Exchange, said that on Thursday, the government will finalize an agreement with his company to operate the bourse.
A delay would be a mistake, he said. Risk will be minimal initially because the stock market will start out with only a handful of companies before it expands, he said.
“The first four or five years the stock market is not going to operate fully,” he said. “The economy is down-turning, but when the economy goes up, the stock will be operating fully.”
He said he had heard rumors about Finance Ministry discussions of delaying the opening but had never verified them.
Mey Vann, director of the Finance Ministry’s financial industry department, said Monday that the stock market could be ready by the end of 2009 or be delayed until 2010.
“It’s an ongoing process,” he said. “We could not say when we will open the stock market.”
Hun Sen also predicted 6 percent growth in 2009, a projection that outpaces the sub-5 percent growth forecast by the World Bank and International Monetary Fund.
Despite slowdowns in the tourism, real estate and garment sectors, the potential in agriculture could be a main component of growth, the prime minister said.
“Cambodian economic growth is still narrow and vulnerable to risks from outside because we rely strongly on the garment and tourism sector. That’s why we urge a shift to the agriculture sectors,” he said
Hun Sen on Monday also commented on a recent report by the environmental watchdog Global Witness, which criticized the lack of transparency in government dealings with oil and mining companies.
“Some crazy people said the corruption comes from oil. Meanwhile, all the money is under the sea,” he said in response to a question about the report.
International Business Club chairman Bretton Sciaroni, whose law firm co-sponsored the event, said that about 50 percent of the more than 100 attendees had never invested in Cambodia before.
While the world economic crisis has caused some investors to delay making decisions about Cambodia, he said Cambodia has some of same appeal to investors that it did a year ago.
“The cost of entry is not what it is in other countries,” he said, adding that the country still has a relatively low base and large growth potential.
Some of the topics covered in the conference were the need for Cambodia to develop food processing and new types of manufacturing beyond garments, he added.