Senior officials of securities market regulator and operator said yesterday that 2023 would be a potential year for the stock exchange as there will be more securities listings on the Cambodia Securities Exchange (CSX), while development partners would provide more technical assistance for the development of the market and more trading account openings.
Sou Socheat, Director General of Securities and Exchange Regulator of Cambodia (SERC) of the Ministry of Economy and Finance (MEF), said during the ceremony for the official listing green bond of the real estate firm Golden Tree Co Ltd at CSX that Acleda Bank Plc is preparing to issue another green bond to raise a fairly big amount of fund in 2023.
Socheat also said in 2023 there would be an education firm to be listed as another stock in CSX. The education firm Mengly J. Quach Education has obtained application form from the bourse operator Cambodia Securities Exchange (CSX) to fill in to apply for listing eligibility review. Mengly J. Quach Education has expressed its intentions to be listed on the main board.
Asian Development Bank (ADB) would continue to provide support with an assistance package to work with SERC to release and implement some plans in 2023 in which there would be more listings—both stocks and bonds—including Acleda Bank Plc which would prepare to issue another green bond to raise a fairly big amount of fund along with other bonds to be listed.
“I think this year would make the stock exchange busier,” said Socheat, adding that a leading telecommunications firm would also be listed as another stock on CSX. However, he did not reveal the name of this firm, but recently Hanna Mark, Group CFO of Royal Group, revealed its plans to list Cellcard and EZECOM on CSX to Khmer Times.
The conglomerate Royal Group of Companies plans to issue corporate bonds for two of its information, communications and technology business portfolios Cellcard and EZECOM to borrow about $130 million from the public investors for the development of technical hard and soft infrastructure, said Hanna.
The Royal Group plans to issue $70 million bonds for Cellcard and $60 million for EZECOM this year and sell these bonds to both local and overseas investors after raising about $10 million for its monopoly railway business last month, according to the official, who is in charge of finance of the group of companies.
“We have started the process to issue the bonds next year… we will the fund raised from selling these bonds to buy more sites, towers, antennas, equipment and other things to expand our coverage around the country. We will raise more funds than the railway because telecommunication is so more expensive than railway, especially the communication equipment is very expensive,” said Hanna.
Hanna went on to add that it would take about six months for Cellcard to complete the procedure of bond issuance and thus the issuance is expected to happen in the first quarter of 2023. “We want to build so many sites. So, it would be a very big investment,” he said, adding that the plan to issue $60 million for EZECOM is to finance this subsidiary’s data centre.
Socheat also said he would discuss with United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) on possible technical cooperation to promote green bond listing on CSX in 2023, where would be a presentation on Cambodia’s first green bond issued by Golden Tree at the ASEAN+3 Bond Market Forum to be held February 1, 2023.
Socheat pointed out that CSX has proposed for forming two working groups to revise some complicated administrative procedures within six months to attract more firms to be listed on the bourse. “I asked my colleagues to re-examine the procedures of requesting for identity number of investors … identity fee, which may make investors feel headache,” Socheat said.
Hong Sok Hour, CEO of CSX, said 19 firms — nine stocks and nine bonds—had been listed on the stock exchange as of yesterday to raise about $317 million for the beginning stage, while the number of trading accounts has reached approximately 36,000 accounts. Sok Hour also said 2023 is considered a special and potential year for the stock exchange as some more firms would be listed.
“We will be able to make this year special for everything including more listings, trading volume and new account openings,” said Sok Hour, who appealed for firms to diversify capital through stock exchange by issuing shares or bonds to mobilise funds from investors and share their profits to them.
Hean Sahib, Secretary of State MEF, said the government reduces up to 50 percent of tax on income for the first three years based on the size of issuance and waiver of tax debts, while investors would be offered 50 percent exemption of withholding tax on interest and dividend, while the tax on capital gain would be exempted.
“I think there must be more considerations that we have to work together, especially support, incentives and less administrative work that may be obstacles for listing in the bourse,” said Sahib, who is also the chairman of CSX—a joint venture between the Cambodian government holding 55 percent of the stakes and the Korean Exchange owning the remaining 45 percent.