With the March 1 deadline fast approaching, several companies are preparing applications for brokerage licenses to operate in Cambodia’s stock market, which is expected to open sometime this year.
But it is unclear how many firms–which are required to have $10 million in capital–are applying or how many will receive licenses for the market, which will at first list three or more government-owned firms. A source familiar with the process said that 20 companies have requested and received applications.
OSK Indochina Bank, one of at least two banks applying, announced that the Ministry of Commerce on Wednesday approved the incorporation of its new firm OSK Indochina Securities.
“We have to incorporate the company to apply for a license…. Currently there’s potential in the stock market in Cambodia. It has potential to allow the economy to grow,” said Lim Loong Seng, COO of OSK Indochina Bank.
Ming Bankosal, director general of the Securities and Exchange Commission of Cambodia, declined to say how many companies have already applied.
“I don’t know how many there will be. The date has not passed,” he said, adding that after the application deadline, a one-month period will pass before the SECC announces its final decisions.
He declined to say how many companies the SECC plans to approve.
Huang Sochua, secretary general of the Cambodian Stock Market, said that the market is scheduled to fully launch by the end of year.
Han Kyung-tae, chief representative of Seoul-based Tong Yang Securities Company, said his company is in the process of converting its status in Cambodia from a consulting firm to a securities company so that it can apply for a license.
He said that too many firms would create too high a level of competition that could squeeze out quality firms.
“What I am worrying about is too many” in Cambodia, he said. “In terms of competition it could be ugly.”
“Basically there needs to a balance of the size of the market and the brokerage companies,” he said.
Acleda Bank is also in the process of assembling its application for a brokerage license, said Svay Hay, vice president and head of Acleda’s capital market division.
“The stock market is a part of the financial sector. The company that invests in the sector will benefit from that,” he said adding that Acleda has the advantage of a network of more than 500,000 customers who could need brokerage services.
“We expect that when we have a securities firm we can provide those services to existing customers.”