The government, in partnership with the South Korean stock exchange, officially launched the Cambodia Securities Market Project on Thursday, which is expected to culminate in the establishment of a Cambodian stock exchange in 2009.
Speaking at the launch, Prime Minister Hun Sen said that with the South Korea Exchange as a partner, Cambodia will be able to establish its own exchange by the 2009 deadline, but cautioned that a great deal of work still remained.
“All companies, including state-owned enterprises, must modernize their management to ensure transparency, accountability and good governance,” Hun Sen said.
The prime minister added that further legislation needed to be passed before the stock market could come to fruition.
He pointed to the draft Law on Issuance and Trading of Non-Government Securities, which he said will be the “fundamental” law needed to establish the Cambodia Securities and Exchange Commission—the body that will regulate the proposed market. That law is scheduled to be voted on during the current National Assembly session.
Young-tak Lee, chairman and CEO of the South Korea Exchange, who was at the ceremony, said that under the project, training courses will be conducted, a building constructed and all the rules and regulations and IT systems for the market will be prepared. He said he expects a Cambodian stock market to open in the second half of 2009.
Lee added that Cambodia is in a significantly stronger economic position than when South Korea opened its exchange in 1956.
“Cambodia has had much experience in achieving economic growth within a short period…. It is based on that experience that Korea has been attracted to cooperate on the financial sector,” Lee told reporters through an interpreter.
Finance Minister Keat Chhon said that the South Korean government has donated $1.8 million for human resource development and training for the stock market, but that he did not know how much the entire project was expected to cost.
The proposed Securities and Exchange Commission will be an independent body, Keat Chhon said. He stated, however, that it will be primarily overseen by the Finance Ministry and the National Bank of Cambodia.
The Cambodian companies eligible to be listed on the market are the 400 state and private enterprises that the Finance Ministry announced last month were large enough to go through a new, mandatory auditing process, Keat Chhon said. “I am somewhat worried that, when the securities market is in place, some enterprises will not be ready because they have not yet reached requirements of an international standard,” he said.
In Chany, director-general of Acleda Bank, confirmed that his bank is among those ready and interested in being listed on the exchange.