Although regulations are largely in place for Cambodia’s up and coming stock market, officially destined to launch by the end of this year, the private sector has yet to voice much interest in the new bourse.
To date only three state-owned entities – the Phnom Penh Water Supply Authority, Cambodia Telecom and Sihanoukville Autonomous Port – have officially announced their aim to be publicly listed.
Still experts say the private sector is quietly showing a growing curiosity in the prospect of listing on the new stock market, though a considerable amount of educating how exactly a company can list is still needed.
“There was a lot of misinformation on the markets,” said Marc Lavoie, managing partner at Cambodia Capital, a private equity fund that took part in an educational workshop on the stock market on Friday in Phnom Penh.
Mr Lavoie said that Friday’s workshop was principally designed to teach people how they should prepare themselves for listing on the stock market as well as spell out the major advantages of becoming a listed company.
The private sector still lacks confidence that the stock market will work, Mr Lavoie said, adding that there are currently about 20 companies in Cambodia who could theoretically list if they felt it was worthwhile.
But “a lot of people will want to see the thing work first,” he said, adding that current interest from within the private sector covered a wide range of companies from multinational firms with robust accounting standards to family owned businesses with little to no experience of stock markets.
“There’s a very, very wide range of interest,” he said.
William Greenlee, country managing director for the law firm DFDL Mekong, which told participant’s at Friday’s workshop about regulatory matters related to the stock market, said that despite having a lot to “iron out” a provisional launch date of December is still officially an attainable date for the bourse.
But “privately I expect that it won’t happen until next year,” he said, adding that interest within the private sector was only “general” at this stage with companies trying to “figure out what it’s all about.”
Mr Greenlee said that the potential companies currently showing interest in listing on the stock market still had some organizing to do in order meet all the requirements needed to list publicly.
“There is quite a lot of structuring needed to get a company prepared for making a public offering,” he said.
As with the stock markets in Vietnam and Thailand, experts say that once Cambodia’s stock market opens there will be a period when both regulators and issuing companies will be forced to go through a period of trial and error with Cambodia’s marketplace still largely new and untapped.
Ming Bankosal, secretary-general of the Securities and Exchange Commission in Cambodia, said the government was currently preparing written material for the private sector so that they are informed about what regulators will expect from issuing companies in terms of capital requirements, transparency and accountancy standards, among other aspects.
Mr Bankosal added that most of the interest from within the private sector had come form firms with an international background. But with very few ready to list it is still unclear as to whether or not the stock market will actually open this year, he said.
“The opening depends on whether the corporations are ready and meet all the requirements,” he said. “From our side, the regulations are already in place. The companies just have to prepare themselves.”