Cambodia opens first bourse

Cambodia officially launched the country's first stock exchange yesterday, though no companies are expected to be ready to list until later in the year. During a ceremony marking the launch of the Cambodia Securities Exchange (CSX) in the capital, Economy Minister Keat Chhon said the bourse would help boost foreign investment. The CSX is a joint venture between the Cambodian government and the Korea Exchange, which signed an agreement to set up the exchange in March 2009. But due to delays while firms reach compliance with auditing standards, trading on the CSX is unlikely to begin until early in 2012, said Stephen Higgins, chief executive of Cambodia-based ANZ Royal Bank. "The firms here are simply not ready to be in a position to list," Higgins said. He added that over the long term the CSX could provide a valuable source of equity for listed firms, but that the bourse would take time to find its feet. Article continues below Higgins said compliance, which requires three years of audited accounts, would not happen overnight. But in the longer term, he predicted "quite a few" Cambodian firms would be good candidates to list. "This will be a net positive for the economy, but people need to be measured in their expectations," he said. Another obstacle was likely to be the traditionally low level of transparency in the Cambodian private sector. So far only three state-owned firms have announced their intention to list on the CSX: Telecom Cambodia, the Phnom Penh Water Supply Authority and Sihanoukville Autonomous Port. Seng Vuoch Hun, the president of the Asia Cambodia Law Firm, said the CSX would be "a driving force" for financial transparency, according to yesterday's edition of the Phnom Penh Post. She warned, however, that trading regulations should be strictly enforced to protect first-time investors in a country that is new to securities trading. The launch of the CSX follows the January launch of a bourse in neighbouring Laos. Investors there have a choice between investing in two of the communist government's state-run firms.