Sam Rainsy Says Cambodian Stock Exchange a Risky Bet

Opposition party leader Sam Rainsy has described Cambodia as a “small and sick dragon,” and said investing in the Cambodian Securities Exchange will be risky business for foreign investors.

Mr. Rainsy also said there was government “secrecy” surrounding oil and gas deposits off the Cambodian coast.

“Cambodia is a small and

sick dragon; it’s a corrupt country with no good governance, so investors risk a lot buying companies or shares that are worth nothing,” the self-exiled leader of the opposition party said in a televised interview with the financial news service Bloomberg.

“The country needs a much longer period of preparation

in terms of company accounts

and corporate governance. In­vestors risk paying for nothing,” he said of the Cambodian stock exchange.

The bourse officially launched in July, but initial public offerings for the three government agencies—the Phnom Penh Water Supply Authority, Telecom Cam­bodia and Sihanoukville Auton­omous Port—that will be the first to float on the exchange, have yet to be issued. They are expected this year.

Mr. Rainsy, who has been living in Paris since 2009 following court convictions here, said the investment risks would be “large” and “unconsidered” because of current market conditions.

Suzuki Hiroshi, chief economist of the Business Research Institute for Cambodia, said the country’s growth over the past decade will be reflected in how well the bourse performs.

“For the period between 2001 to 2010, Cambodia ranked 9th all over the world for GDP [gross domestic product] growth, and this is one of the reasons we could be optimistic about the stock exchange,” Mr. Hiroshi said, adding that Cambodia is also considered “middle risk,” according to the International Monetary Fund.

“Of course, there are concerns, because Cambodia is an emerging country and it’s a first experience to open [the bourse]

and have transactions, so there could be some risks, but many investors already have experience investing in Thailand and Vietnam, for example,” Mr. Hiroshi said.

Council of Ministers spokes­man Phay Siphan dismissed Mr. Rainsy’s remarks and said that the government has been careful with how the exchange has been set up.

“What Sam Rainsy says does not reflect Cambodia; it’s his own view,” Mr. Siphan said.

“The government is trying to make Cambodia an accessible place; we are being very careful,” he said, adding that investors are focused more on stability than on politics.

“This government is pro-investment,” he said.

Mr. Rainsy also told Bloom­berg that a lack of transparency is a pressing issue, particularly with regard to offshore oil and gas deposits.

“What Cambodia needs most is transparency, because the ruling party—and particularly clans within the ruling party—withhold all the important information and make decisions that take advantage of exploiting those re­sources,” Mr. Rainsy said.

He also said that “personal deals” between Prime Minister Hun Sen and Thai politicians were preventing “both countries from having clear, consistent policies regarding the exploitation of oil resources.”

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