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The Cambodian Stock Exchange (CSX) - why is it not working ?

Posted: Fri Jun 10, 2016 8:45 pm
by CEOCambodiaNews
It has been getting off to a slow start as they say, so the Cambodian Securities Exchange (CSX) held a conference this week to encourage companies to join.The CSX opened in 2011, but to date there are only four companies listed.
Cambodian stock exchange pitches IPO potential
Phnom Penh SEZ, which became the fourth company to list last Monday, successfully raised $8.2 million in its IPO, while the Phnom Penh Autonomous Port (PPAP) raised $5.2 million last December. Neither company debuted to high levels of trading.
http://www.phnompenhpost.com/business/c ... -potential

Background (Wikipedia):
The Cambodia Securities Exchange (CSX) (Khmer: ក្រុមហ៊ុន ផ្សារមូលបត្រកម្ពុជា; abbreviation: ផមក) is the national stock exchange of Cambodia. The exchange's purpose is to achieve high economic growth by facilitating flows of capital, investment, and reallocation of capital based on capital market mechanisms. The exchange is headquartered in the Canadia Tower, in Cambodia's capital city, Phnom Penh.

As of 2016, CSX was reported to have the smallest total market capitalization for its listed companies of any stock exchange in the world, with a total capitalization of $103.1 million.[1]
So: [Article from 2014, but probably still holds good, seen the rate of the (non) expansion of the CSX.]
Why has Cambodia’s stock exchange failed?


Let’s set the stage, we last updated you on the Cambodian Stock Exchange (CSX) in this article from March 2013.

We showed you how you could invest in the Cambodian stock market back in April 2012, or 2.5 years ago. Since then, what has happened? Nothing. We were IPO-stage investors in Cambodia’s first public-listed company, Phnom Penh Water Supply Authority (PPWSA) we remain very interested in the market, but it has perpetually disappointed us. PPWSA is now trading at 4,320KHR compared to an IPO price of 6,300KHR that is a spectacular -14.9% annualized return. We are little upset by that, but the company is not a bad company nor has its growth been all that terrible. The price decline is entirely a result of being listed on a dead stock market.

The CSX listed its second company, Grand Twins International (Cambodia) PLC which raised $19.3mm in June. Grand Twins’ was offered at 9,700KHR and is now trading at 7,680KHR only 2 months later. That is a -20.8% return or -75.3% annualized. Not due to an aggressively-priced IPO, but due to earlier garment strikes in Cambodia and a complete dearth of trading volume.

Any country looking to set-up its own exchange, such as Myanmar should learn from Cambodia’s repeated errors. We list below the three major errors that Cambodia made in launching the CSX:

Choosing the wrong company to launch an exchange with
. PPWSA is not a bad company, but using a regional water utility is not the way to launch a national stock exchange. Listing the largest telecom, bank, or mining company is a well-travelled path with numerous success stories. As we have alluded to Telecom Cambodia is an absolute mess, but ACLEDA bank is actually a well-run organization, being owned partly by IFC, Banque Populaire, and Jardine Strategic Holdings. All world-class organizations that have brought governance and operational expertise to the company. This is particularly frustrating As ACLEDA was considering an IPO from inception of the CSX and Telecom Cambodia was told to prepare for an IPO in 2009.

Poor governance in the Cambodian corporate sector. We received the prospectus for PPWSA and it was a mess. Numerous typos, errors and sentences that did not make sense. Semi-annual reports that were only released in Khmer and a website that was a nightmare to navigate. We think that at least three years prior to an IPO, a company should be operating to a level of governance that is expected for a public firm. This includes an investor relations team, compiling annual reports, and senior management being trained in how to take analyst questions and prepare for investor calls. None of this was done in the case of PPWSA. It is important to note that a memorandum of understanding for establishing the Cambodian Stock Exchange was signed in 2006, a full 5 years prior to PPWSA’s IPO. Our expectations are not unrealistic on this basis. Telecom Cambodia is encountering similar issues and that is the main reason why it has yet to list. Even today, take a look at PPWSA’s website, it is one of the worst we have seen of any listed company in Asia. If a country has a large domestic base of investors, we do not expect English or a website catering to foreign investors. In the case of Cambodia, we do.

Underestimating the complexity of launching a stock exchange. The targets for the CSX launch date, the first listing, and the second listing have been woefully inaccurate. CSX and its management have perpetually underestimated the level of work and the level of detail required to get things done. We must also give some blame with the Korea Exchange group which helped launch the CSX and whose technology CSX utilized to run the exchange. We provided a description of the exchange here.

The potential of Cambodia as a country of 15mm that is rapidly growing and a GDP per capita of only $1,000 we will continue to monitor developments closely. However, Cambodia has also taught us many lessons and in the future we would be unlikely to invest in the launch of a stock exchange if it is not supported by a strong corporate offering.

Let us hope that Telecom Cambodia comes to the table soon. For both our sake and the country’s.
Well, 2 years on, and no sign of Telecom.
http://www.investmentfrontier.com/2014/ ... ge-failed/

Re: The Cambodian Stock Exchange (CSX) - why is it not working ?

Posted: Fri Jun 10, 2016 10:01 pm
by Username Taken
^^ To be fair, it's only been 2 years.

Re: The Cambodian Stock Exchange (CSX) - why is it not working ?

Posted: Fri Jun 10, 2016 11:33 pm
by juansweetpotato
Thanks for a good read AM. I like Gaudente's comments on that last link in your OP. lol.
He doesn't seem to like Cambodia one bit. But valid observations of of those in charge.
Gaudente Aug 24, 2014 at 1:29 pm
the reason for CSX failure is Cambodia is a cuntry (yeah, without “o”)of morons and greedy thieves. They let you open a brokerage account then forbid you to open the bank account needed to finance it ! How stupid is that ? PPWSA is a shit of a company, paying a dividend of 55 riel, less than 1% of IPO price. And why the fuck should anyone buy Grand Twins , a textile industry at 4 time its book value when there are peers in Hong Kong like China Ting that quote 1/4 of their book value ?
Cambodia could be considered for fixed deposit in microfinance institutions, but guess what ? there’s a 14% withholding tax on interest for non residents ! What a great way to attract desperately needed foreign cash !. ...
Gaudente Dec 18, 2014 at 12:39 am
as expected, Grand Twins profit in 3rd quarter is down 83% http://www.acledasecurities.com.kh/as/e ... b6d9af3fd7
they use stock market only to place rotted companies at grossly inflated IPO prices then cry because quotes go down the sewer…. what a cuntry…what a cuntry….

Re: The Cambodian Stock Exchange (CSX) - why is it not working ?

Posted: Wed Apr 26, 2017 4:04 am
by CEOCambodiaNews
A fifth company, the Sihanoukville Autonomous Port, prepares to join the booming Cambodia Securities Exchange:

Sihanoukville gets ready for listing
26 April 2017

The Sihanoukville Autonomous Port (PAS) launched a book building process yesterday to determine what price to offer in an initial public offering (IPO), before it is listed on the Cambodia Securities Exchange late next month.
Once listed on the CSX, PAS will be the fifth company on the bourse joining Phnom Penh Special Economic Zone Plc., Phnom Penh Autonomous Port, Grand Twins International (Cambodia) Plc. and the Phnom Penh Water Supply Authority.

So Eiichiro, chairman of SBI Royal Securities – the sole underwriter for PAS – said that the book building was “to test the waters and gain a greater insight into the investment appetite for the IPO.”
“SBI will be having roadshows in Bangkok, Singapore and Hong Kong to gauge the interests of potential investors,” said Mr. Eiichiro.
Investors attending the roadshow could get a book building application and state their bidding share prices within a range of $0.88 to $1.29, he said.
“The book building process will end on May 2,” added Mr. Eiichiro.

“The guaranteed annual dividend is at least five percent in the first three years for all public investors,” he added.
PAS plans to issue 21.4 million shares, about 25 percent of the company’s authorized capital of $105 million, to raise its paid up share capital from $18.85 million to $27.74 million.

According to a brief issued to the CSX, the Cambodian government through the Ministry of Economy and Finance will control 75 percent of PAS after the IPO. Public investors, it added, will control 22.5 percent while PAS’s employee stock ownership program will own 2.5 percent...
http://www.khmertimeskh.com/news/37759/ ... r-listing/

Re: The Cambodian Stock Exchange (CSX) - why is it not working ?

Posted: Thu Jun 01, 2017 12:54 pm
by CEOCambodiaNews
Record IPO nets $27M for Sihanoukville port operator
Thu, 1 June 2017
The initial public offering of the state enterprise that operates Cambodia’s largest seaport was fully subscribed, raising nearly $27 million for the purchase of land and equipment for expansion, the IPO’s underwriter said yesterday.

Seng Chan Thoeun, head of corporate finance at SBI Royal Securities, the IPO’s sole underwriter, said investors purchased all 21.4 million public shares in Sihanoukville Autonomous Port (SAP), representing a 25 percent stake in the company. With shares priced at 5,040 riel ($1.26) each, the IPO raised $26.99 million, making it the largest in Cambodian history.

SBI Royal’s breakdown of the total 21.4 million shares offered in the IPO showed 5.4 million shares or 25.3 percent were allocated to bookbuild investors, 2.3 million shares or 10.6 percent to the retail subscription, and 2.1 million shares to an employee stock ownership programme.
Japan International Cooperation Agency, which is financing projects to expand the port’s infrastructure, separately agreed to purchase 11.6 million shares, or 54 percent of the public offering.

According to Thoeun, over a third of the total IPO shares were allocated to Cambodian investors, while 62 percent of the total shares went to Japanese investors, including JICA. Foreign investors from China, Thailand and Malaysia, among other countries, also participated in the subscription.
http://www.phnompenhpost.com/business/r ... t-operator

Re: The Cambodian Stock Exchange (CSX) - why is it not working ?

Posted: Thu Jun 01, 2017 2:59 pm
by eriksank
CEOCambodiaNews wrote:
Fri Jun 10, 2016 8:45 pm
It has been getting off to a slow start as they say, so the Cambodian Securities Exchange (CSX) held a conference this week to encourage companies to join.The CSX opened in 2011, but to date there are only four companies listed.
You cannot just click a few buttons and do business on that exchange. First, you will need to enter into a master-slave relationship with a "participating bank":

List of Cash Settlement Agent

1 ACLEDA Bank Plc. Address
Telephone
Fax
: 023 994 444
: 023 998 666

2 BANK FOR INVESTMENT AND
DEVELOPMENT OF CAMBODIA PLC. Address
Telephone
Fax
: 023 671 6870
: 023 220 511

3 CANADIA BANK PLC. Address
Telephone
Fax
: 023 868 222
: 023 215 085

List of Securities Registra & Transfer Agent

1 ACLEDA Bank Plc. Address
Telephone
Fax
: 023 994 444
: 023 998 666

2 TRICOR SECURITIES SERVICES PLC.
Fax
: 023 987 100
: 023 987 388


You are supposed to FAX to them your certificate of total conformity. I actually tried to do so in 2012. I have not yet received a FAX back from them.

Re: The Cambodian Stock Exchange (CSX) - why is it not working ?

Posted: Mon Jun 05, 2017 6:01 pm
by willyhilly
When my son visited Cambodia he fell about laughing when he saw that big illuminated sign on Monivong for a stock exchange with one company.

Re: The Cambodian Stock Exchange (CSX) - why is it not working ?

Posted: Sat Jun 10, 2017 10:24 pm
by CEOCambodiaNews
Follow on from article posted above : Record IPO nets $27M for Sihanoukville port operator 1 June 2017 :

Port shares end slightly higher on CSX debut
09 June 2017
Sihanoukville Autonomous Port made its debut yesterday on the Cambodia Securities Exchange (CSX) as the fifth publicly listed company on the bourse with shares ending at 0.79 percent higher at the close of trading.
At the start of trading SAP’s shares opened at 5,360 riel ($1.34), up $0.08 from the initial public offer at $1.26 per share. The opening trading volume was 11,071 shares.

However just before the CSX closed it dropped to $1.27, with 24,869 shares traded in total for the day

SAP becomes the fifth company on the bourse joining Phnom Penh Special Economic Zone Plc., Phnom Penh Autonomous Port, Grand Twins International (Cambodia) Plc. and the Phnom Penh Water Supply Authority.
The listing comes after a fully subscribed IPO where 21.4 million shares were offered to the public at $1.26 per share. SAP managed to raise around $27 million in one of the biggest initial public offer the CSX has ever seen...
http://www.khmertimeskh.com/news/39160//

Re: The Cambodian Stock Exchange (CSX) - why is it not working ?

Posted: Wed Jun 21, 2017 4:45 pm
by CEOCambodiaNews
Things are looking up. You will soon be able to buy and sell your CSX shares on your smartphone.

Platform to unify online trading on CSX
Mon, 19 June 2017
A central online trading platform expected to launch by the end of the year will allow investors to trade securities listed on the local stock market using a desktop computer or smartphone.

Lamun Soleil, director of market operations at the Cambodia Securities Exchange (CSX), said the bourse is developing a Mobile Trading System (MTS) that will serve as a central web-based platform for local securities firms and their clients. He said brokerages will be charged a fee to use the service, which he claims will be more cost-effective than developing their own online trading platform.

“To save the cost for each securities firm and the market, our MTS is one that can be used by all securities firm,” he said. “They are expected to pay a regular fee, which is much lower than if they each developed their own MTS.”

Subscription to the service is optional, and securities firms are free to develop their own proprietary online trading platforms, he added.

The MTS is being developed with technical assistance from Korea International Cooperation Agency and expected to be operational by the end of the year.

Soleil explained that investors with an account at a local securities firm that subscribes to the service will be able to access their account information and place trade orders on stocks listed on the CSX using a desktop computer or via a web browser on a smartphone.

“Investors will have instant access to the market on their smartphone [when] connected to the internet,” he said. “Investors can instantly buy or sell stocks, view real-time market data and listed companies’ information, view their cash and securities balance, and so on.”

“The processing of orders will be faster and more efficient,” he said. “Brokers will also face less risk related to order submission since investors will place orders by themselves.”...
http://www.phnompenhpost.com/business/p ... rading-csx

Re: The Cambodian Stock Exchange (CSX) - why is it not working ?

Posted: Wed Jun 21, 2017 6:44 pm
by Luigi
Based on this so convincing I am selling all my FB, AMD, NVDA & MU & shorting the entire CSX.
Gotta be a winner. What could possibly ...............?