Three Firms to Join Stock Exchange

Cambodia’s fledgling stock exchange is expected to more than double in size over the next two years, with three companies undergoing the process to list next year, the bourse’s spokesman said Monday.

Taiwanese-owned garment company TY Fashion and the Phnom Penh Autonomous Port have begun the due diligence process of auditing their financial statements in preparation to make a formal request to list sometime next year, said Lamun Soleil, deputy director of marketing operations for the Cambodia Securities Exchange (CSX).

“When they finish the disclosure documents, they wait for their request to list to be approved, which takes only about one month,” he said. Mr. Soleil said a third company was also planning to list next year, but said he could not provide the name of the company for confidentiality reasons.

Hei Bavy, director general of the Phnom Penh Autonomous Port, said that although the port was hoping to list, the CSX’s time frame was too ambitious. He said the port was in the process of changing its accounting system, which would significantly delay the listing process.

“We are preparing to list, but it will more likely take three years to be ready,” he said.

In July, sportswear manufacturer Grand Twins International became the second company to launch on the bourse, joining the Phnom Penh Water Supply Authority. Despite hopes that Grand Twins would create a renewed trading buzz, its stock price has failed to surpass its debut of 9,700 riel (about $2.42).

Following strikes at the Grand Twins factory over pay and working conditions that ended last week, Vicheth Vannarath, head of investment banking at Cana Securities Ltd., said the prospect of another garment manufacturer listing could be unappealing to investors.

“The strike did affect the credibility of GTI, among other strategic issues. The stock performance since IPO reflects low investor’s confidence even before the strike,” he said. “TY will be a hard sell.”

(Additional reporting by Hul Reaksmey)

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