Photo by: VANDY RATTANA Officials announced at a seminar Thursday that the launch of Cambodia’s stock exchange will go ahead as planned.
$1.3m
spent annually on the stock exchangeThe Korea International Cooperation Agency, which is working to establish a Cambodian securities market, says risks are necessary.
THE PHNOM PENH POST
Written by Hor Hab and George Mcleod
Friday, 17 October 2008
Despite fears of greater collapse in world markets, Cambodian officials say they are on track, with South Korean assistance, to begin trading next year
CAMBODIA will move forward with plans to establish a stock exchange in 2009 despite concerns over the global market crisis and suggestions that it would be delayed until 2010, Finance Minister Keat Chhon announced at a seminar on the bourse Thursday.
"We will not rush to establish the stock exchange in Cambodia, but we will build a strong base, including hard and soft infrastructure," Keat Chhon said at the InterContinental hotel.
The country is in the process of finalising securities rules and has broken ground on the exchange building, he said.
He added that the Council of Ministers has begun drafting subdecrees to implement new laws about an initial public offering."The establishment of a stock market will help Cambodia develop additional sources of finance currently buried in various places, and it will boost economic growth," Keat Chhon said.
Hang Chuon Naron, secretary general of the Ministry of Economy and Finance, said the stock market will progress according to the government's long-term financial vision for the country and is not vulnerable to the global crisis.
"We hope the stock exchange will provide longer-term finance compared to what we have relied on in the past, such as banks, national budgets, foreign aid and foreign investment," Hang Chuon Naron told the Post Thursday.
"I think in five or 10 years, the stock exchange will play a key role in strengthening Cambodia's financial sector, but we must proceed carefully to build trust from our people and investors," he said.
" We will not rush to establish the new stock exchange in Cambodia. "
"Cambodia currently depends on about US$2.5 billion from banks and $600 million in ODA [Official Development Aid], with an additional $1.5 billion from the national budget and $867 million in foreign direct investment," he said.
Sung Hee Hong, executive director of global business development at the Korea Exchange (KRX), said Cambodian companies are being trained in stock market fundamentals.
"We expect to provide experience, criteria and requirements for companies to be listed on the [Cambodian] exchange, but it is critical to have good companies," he said. "Now is the time to identify good companies to be listed."
Bretton Sciaroni, a Partner in the law firm Sciaroni & Associates, welcomed the announcement. "It's the most detailed program we have heard so far."
He said the exchange launch should go ahead, despite the international crisis.
"When we get back to business, [ the stock exchange] will be a good thing."
Market training
The KRX and Cambodia's Ministry of Economy will collaborate to introduce prospective investors to the principles of market trading, he said.
"The target date of 2009 for Cambodia's stock market will not change, even though the recent downturn in global markets and drops in stock prices worldwide have raised concerns," Sung Hee Hong said.
He added that world markets were expected to rebound by the time Cambodia's market went online.
Son Sungil, deputy representative of the Korea International Cooperation Agency (Koica) in Cambodia, said he hopes to see movement on the project by next year.
"Koica has spent on average $1.3 million per year for the establishment of a Cambodian securities market," he told the Post Thursday.
"You have to take risks. Without risks, nothing would happen," he said.
Jacob Montross, business finance manager at the Royal Group of Companies, said the stock market was an important step in Cambodia's long-term development.
"Cambodia is not really ready for it, but it's better to push forward than to wait. Otherwise, you could be waiting a very long time," he said.
"It is possible for Cambodia [to succeed] but it is ambitious and they need to work very hard," he said.
The country is ready because it needs alternative engines for investment opportunities, he said, adding that most people would still invest in land if they had the money.
"In every country that has one, a stock exchange fluctuates. It goes up, and it comes down," he said.
"It will always go up and come down. There is nothing the government can do to ensure that it will only rise," he said.
ADDITIONAL REPORTING BY CHUN SOPHAL
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