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SERC lures investors to sustainable bonds

Golden Tree Co Ltd (GT) on January 19 listed the first “green bond” on the Cambodia Securities Exchange (CSX), raising 6.0721 billion riel ($1.46 million), and remains the only issuer on the local bourse to date.
Golden Tree Co Ltd (GT) on January 19 listed the first “green bond” on the Cambodia Securities Exchange (CSX), raising 6.0721 billion riel ($1.46 million), and remains the only issuer on the local bourse to date. CSX

SERC lures investors to sustainable bonds

The Cambodian securities chief has reiterated a call for local and international investors to secure a slice of the Kingdom’s young, largely unexplored sustainable bond market, amid claims that roughly one-third of ASEAN’s gross domestic product (GDP) could be lost under a “High Emissions Scenario” by 2100 due to “massive gaps” in climate infrastructure financing.

Securities and Exchange Regulator of Cambodia (SERC) director-general Sou Socheat was speaking at a June 6 workshop co-organised by the SERC, Asian Development Bank (ADB) and Ministry of Environment. The event’s formal English title was “The potentials of Investing in Cambodia Sustainable Bond”, according to a joint statement.

Addressing the workshop, Socheat highlighted the lasting difference that giving back to the community can make, the statement noted.

“The issuance of and investment in sustainable bonds area is a testament for a commitment [of] giving back to [the] community.

“Cambodia is still in the early stages of sustainable development, and the number of investors is relatively small, therefore, I would like to encourage our potential investors to seize this opportunity to invest in sustainable bond[s] in Cambodia,” he was quoted as saying.

Socheat affirmed that “key development partners such as ADB” would offer technical support to prospective sustainable bond issuers.

To recap, Golden Tree Co Ltd (GT) on January 19 listed the first “green bond” on the Cambodia Securities Exchange (CSX), raising 6.0721 billion riel ($1.46 million), and remains the only issuer on the local bourse to date.

At the workshop, Kosintr Puongsophol,financial sector specialist at the ADB’s Economic Research and Regional Cooperation Department, claimed that the developing Asia region “will lose up to 24 per cent of its gross domestic product [GDP] as a result of climate change”, according to the statement.

ASEAN “is expected to lose more than 32 per cent of GDP under a High Emissions Scenario by 2100”, Kosintr added.

“We need to therefore mobilise funds urgently and at scale to fill in the massive gaps in climate infrastructure financing which we can [do] through these [four key] channels: [the] securities market through the issuance of green and other thematic bond[s]; [as well as] financial institutions, [which] can play a critical role in mainstreaming climate finance.

“[The other two methods are:] promoting local knowledge and talent; and strengthen[ing] collaboration with international development partners to promote the development of a sustainable finance ecosystem to facilitate fund mobilisation,” he said.

At the same event, environment ministry deputy director-general for policy and strategy Sum Thy argued that the Kingdom is especially susceptible to the consequences of climate change since it is still developing.

“We cannot increase our climate resilience without investing in climate change adaptation. The support of international and development partners is essential to climate change mitigation.

“We need investors who see the value and opportunities of investing in sustainable development and have a long-term perspective. I am heartened to witness the issuance of [a] green bond in Cambodia, and I anticipate that more companies will issue these bonds in the future,” he said.

The CSX reported some 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.

Companies have raised a total of $317 million through their offerings on the CSX, the bourse’s CEO Hong Sok Hour told The Post in a recent 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.


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