Pending Further Regulation, Cambodian Bourse Likely to See Delays

The Cambodian bourse could see further delays to its long-awaited opening, with more regulations still needed before any trading of stock can commence, officials said yesterday.

The stock market was originally scheduled to launch in September 2009, a date that was later penciled in for December 2010 in order to give regulators enough time to draft the necessary legislation to secure confidence in the private sector.

“This is part of our option to delay, but we haven’t reached a conclusion on this yet,” said In Pyo-lee, director of the Korea Exchange, which holds a 45 percent stake in the Cambodia Stock Exchange joint venture with the government.

Mr Pyo-lee said the main deterrent in opening the stock market before the end of the year was the lack of private sector confidence that a stock market is yet possible in Cambodia.

Local media on Monday reported that Finance Minister Keat Chhon said at a business conference in South Korea organized by the International Monetary Fund that the bourse would be delayed until 2011 as more legislation still needed to be drafted in order to govern regulators and listed companies.

Mr Pyo-lee added that although a building to house the bourse has still not been constructed at Camko City in Phnom Penh’s Russei Keo district, the bourse could easily find a temporary shelter at a range of locations in the capital if operations do indeed start before the end of the year.

Sou Socheat, deputy director-general of the Securities and Exchange Commission of Cambodia, said he was unaware of any official decision on the opening date of the stock market.

“I don’t know about that yet,” he said. “The priority regulation is already done. But I don’t know why there are some delays.”

Ming Bankosal, director of the SECC, could not be reached for comment.

Analysts say that companies will not immediately list on the fledgling bourse until they see that it works properly. Most companies also still need instruction on how to meet all the necessary requirements set out by the government before listing.

Marc Lavoie, managing partner at Cambodia Capital, a private equity firm advising the private sector on how to list on the upcoming stock market, said that despite genuine efforts to prepare all the regulations needed to trade stock safely, there were still many gaps.

“It will take an enormous amount of work to get this done in time,” he said.

Mr Lavoie said that a trust law, which provides investors with legal protection when their stock is being traded by securities firms, had yet to be drafted.

“How can you hold stock and provide stock if there is no trust law?” he asked.


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