(Posted by CAAI News Media)
By Ek Madra
PHNOM PENH, Oct 31 (Reuters) - Cambodia expects to begin construction in December on its first stock exchange, a government official said, giving momentum to a long-delayed joint venture with South Korean investors.
"We expect to have the ground-breaking ceremony in December," Mey Vann, director of the financial industry department at Cambodia's Ministry of Economy and Finance, told Reuters.
The idea of a Cambodian stockmarket has been floated since the 1990s but has struggled for traction in a country known for chronic poverty and a history of upheaval, including the Khmer Rouge "Killing Fields".
Cambodian authorities have partnered with private South Korean developer World City Co Ltd to build a $6 million, four-storey stock exchange on the waterfront of a new financial district, Cambodian and World City officials have said.
The area where the stock exchange will be built is flooded swampland on the edge of Boeung Kak Lake in the heart of the Phnom Penh. The end of the rainy season this month will clear the way for workers to begin building the exchange on the corner of what developers are calling Phnom Penh Boulevard.
"The site is under a flood these days. We are pumping the water from the site," said Vann, adding he expected construction to take between eight months and one year.
The bourse was supposed to open in September, a target set last year when South Korea's stock exchange operator agreed with the Cambodian government to set up and run a joint stock exchange.
But the global financial crisis intervened, ending an unprecedented boom which saw Cambodia's economy expand 10 percent annually in the five years up to 2008. Foreign investment collapsed, tourist arrivals fell by double digits and garment exports, a mainstay of the economy, shrank by 15 percent.
Cambodian officials rejected an initial design, saying the exchange's exterior was too modern and not Cambodian enough. It has since been redesigned using traditional Khmer accents.
"We are still working on finalising the design of the exchange building," said Vann. "We'd like to have a mixed design which shows both the culture of Cambodia and Korea."
Korea Exchange, Asia's fourth-largest bourse operator, will own 49 percent of the exchange and is recruiting and training workers for it. Cambodian will own the rest.
Cambodian officials have cautioned against moving too fast, in some cases questioning whether a country whose education system was decimated during Pol Pot's 1975-79 reign of terror is ready to invest in stocks.
"We are going to launch a public awareness campaign about our stock market next month," said Vann.
The exchange expects to start small with just four or five companies issuing about $10 million worth of shares each, Intyo Lee, project director for Korea Exchange, said in early October.
That's comparable to neighbouring Vietnam's first stock market launched in 2000 with its initial market capitalisation of $43 million. Today, Vietnam's market is worth $27 billion. (Writing by Jason Szep, Editing by Dean Yates)
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