At least four small- and medium-sized enterprises (SME) are working with the Cambodia Securities Exchange (CSX) to list on the local bourse to raise funds and expand operations, according to CSX CEO Hong Sok Hour.
Sok Hour told The Post that these companies are from the construction and tech-related domains. “We’ve been working with them, explaining some of the listing processes and what they should do to prepare … one of the four – from the construction sector – will be ready before year’s end.
“They’ve prepared well for the listing, in terms of corporate governance and internal procurement. They’ll be listing on the Growth Board,” he confirmed, adding that the other three firms will need more time to prepare.
“I encourage local SMEs to pursue financing by listing on the market, everyone well understands that many businesses have been facing financial difficulties in light of the Covid-19 pandemic.
“The addition of more companies to the bourse – those seeking funds for business expansions or sustainability – will highlight the capital market as a key source of funds,” Sok Hour said.
The CSX has struggled to attract businesses to the SME-oriented Growth Board since its launch in late 2015. The Securities Exchange Regulator of Cambodia (SERC) requires firms to have shareholders’ equity of at least $500,000 to list on the secondary board, compared to $7.5 million on the primary Main Board.
Companies that list on the Growth Board are also required to release one year of audited financial results, compared to the two years needed for the Main Board.
Additionally, the results must show a positive net profit or positive operating cash flow with gross profit margin of at least 10 per cent.
Meanwhile, according to the CSX’s annual report, the bourse saw seven new listings last year, up from just two in 2021.
These were: JS Land Plc’s initial public offering (IPO) on the Growth Board, three corporate bond issues from Royal Railway Plc, and three listings of government (sovereign) bonds issued by the Ministry of Economy and Finance – the first of their kind in Cambodia.
The CSX reported 222 billion riel ($55.5 million) in capital raised last year – up 133 per cent over 2021 – with corporate and sovereign bonds accounting for 63 per cent and 32 per cent, respectively.
A total of 18 corporate securities feature on the CSX – nine stocks and nine bonds. Companies have raised a total of $317 million through their offerings on the exchange, according to Sok Hour in a previous interview.
As of January 19, around 36,000 CSX trading accounts had been opened, he noted, confirming that the average daily trading value on the bourse reached about $500,000 last year.
The CSX has revealed a number of targets for 2023, including doubling the number of new securities listings to 14 and the average daily trading value to $1 million, the latter of which would make for a third consecutive year of record highs.
The bourse also aims to triple the number of new trading accounts this year, with the “CSX 2022 Achievements, Outlook, and Plans for 2023” bulletin noting that “over 5,000” were registered in 2022.
The CSX is co-owned by the Ministry of Economy and Finance and the Korea Exchange (KRX) on a 55:45 basis.