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Ups and downs in rollercoaster 2021 for local securities field

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Securities and Exchange Regulator of Cambodia (SERC) director-general Sou Socheat. Heng Chivoan

Ups and downs in rollercoaster 2021 for local securities field

Despite the economic devastation wrought by the Covid-19 crisis in 2021, the Cambodian stock market chalked up a string of achievements.

The Cambodia Securities Exchange (CSX) witnessed its first-ever initial public offering (IPO) by a small- and medium-sized enterprise (SME), on its secondary Growth Board, Securities and Exchange Regulator of Cambodia (SERC) director-general Sou Socheat recounted to The Post.

As of end-2021, there were 15 companies listed on the two boards – eight have stocks trading on the bourse, and the rest have issued corporate bonds – raising around $277.79 million, he said.

As of November, market capitalisation reached $1.74 billion, he added. “The market also accommodated Telcotech’s bond issuance which was guaranteed by the Credit Guarantee and Investment Facility [CGIF].”

In 2021, the SERC granted licences, approvals and accreditation to market players as follows – one underwriter, one central counterparty, four derivative brokers, five fund managers and two trustees, he said.

That year, he said, the SERC also granted licences to 12 securities firms, three financial advisory firms, one investment advisory firm, 28 firms doing business through a collective investment scheme (CIS), 36 firms doing business in derivatives, and granted approval or accreditation to 36 agents.

As of the third quarter of 2021, the SERC had granted approval to 30,153 investor IDs, he added.

“As a regulator of the capital market, we have always placed investor protection as our main priority. SERC has provided a lot of training to the public, to raise the awareness about the securities market.

“To ensure the market is run smoothly, effectively, orderly and transparently, SERC has always conducted market supervision and surveillance as well as on-site and off-site inspection on the regulated entities even during these pandemic times,” Socheat said.

CSX Market Operations Department director Kim Sophanita “Nita” told The Post on January 5 that 2021 was another challenging year that the market has overcome, yet it has gained “unstoppable momentum”.

“Two more companies have been listed on the CSX, among which one issued the first-ever stock-listing on the Growth Board and the other issued bonds,” she said.

However, she admitted that some investors may have been disappointed to see Acleda Bank Plc (ABC) share prices drop by 38 per cent over the year, which also drove down the CSX Index down 27 per cent, due to its “high weight”.

“However, I would say this is a very unique situation and could just be a temporary drop, because it is caused by temporary mismatch between the demand and over floating supply of shares and it had nothing to do at all with the fundamental value of the company.

“If we observe closely, that was the reason behind [the market’s] selling and buying force and a significant increase in trading activity in 2021. I believe that such a temporary issue would be fixed in 2022 and investors who bought low last year would be able to harvest in 2022.

“We are more than excited, and expect continued good momentum for the market in 2022 through many new products and operational development projects,” Nita said.

Socheat also anticipates that 2022 would be another exciting and productive year for SERC, as a Cambodian capital market regulator and as the ASEAN Capital Market Forum (ACMF) chair. The SERC is also due to put in place 10-year securities sector development strategies, he noted.

“As the ACMF chair, we will focus more on inclusiveness, sustainability and connectivity to make sure that all ACMF members will benefit from this high-level grouping market regulator,” he said.

To promote sustainability and with the support of the ASEAN Plus Three Bond Market Initiative (ABMI), SERC launched detailed guidelines on green bond issuance in Cambodia, he added.