In this article we discuss everything you need to know about the Cambodia Securities Exchange (CSX), including its formation, the socio-economic impact it has had, the top three successes from companies who listed and what the latest IPO – from leading telecommunications company Cellcard – means for the CSX and Cambodia.
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Does Cambodia have a stock exchange?
The Cambodia Securities Exchange (CSX) is the stock exchange of Cambodia, located in Phnom Penh. It was officially launched on July 11, 2011, marking a significant step forward for the country’s financial sector. The Cambodia Securities Exchange was established as a joint venture between the Cambodian government, which owns 55% of the exchange, and the Korea Exchange (KRX), which owns the remaining 45%.
When did the Cambodian Stock Exchange (CSX) first launch in Cambodia?
The idea of establishing a stock exchange in Cambodia was first proposed in the early 1990s, but it took several years for the necessary regulatory and legal framework to be put in place. The Securities and Exchange Commission of Cambodia (SECC) was established in 2007 to oversee the securities industry and to prepare for the launch of the Cambodian Securities Exchange.
What are the companies listed on the Cambodia Securities Exchange?
The following are listed on the Cambodia Securities Exchange:
- JSL JS LAND PLC
- DBDE DBD Engineering Plc.
- PEPC Pestech (Cambodia) Plc.
- ABC ACLEDA Bank Plc.
- PAS Sihanoukville Autonomous Port
- PPSP Phnom Penh SEZ Plc.
- PPAP Phnom Penh Autonomous Port
- GTI Grand Twins International (Cambodia) Plc.
- PWSA Phnom Penh Water Supply Authority
How successful has the Cambodian Securities Exchange (CSX) been in Cambodia?
The launch of the Cambodian Securities Exchange was seen as a major milestone for Cambodia’s economic development. It provided a new source of financing for local companies and allowed them to raise capital to fund their growth and expansion plans. It also gave Cambodian investors access to a new investment opportunity and helped to promote the development of a savings culture in the country.
In the years since its launch, the CSX has made steady progress in terms of market capitalisation and trading volumes. By 2021, there were five companies listed on the exchange, with a total market capitalisation of around $1.3 billion. The largest company on the exchange is Phnom Penh Water Supply Authority, with a market capitalisation of around $450 million.
The CSX has also played an important role in promoting transparency and good governance in Cambodia. Companies that are listed on the exchange are required to comply with strict disclosure and reporting requirements, which helps to improve corporate governance standards and increase investor confidence.
How will the Cambodia Securities Exchange (CSX) help Cambodia develop going forward?
Looking ahead, the Cambodia Securities Exchange is expected to continue to contribute to Cambodia’s socio-economic development through capital mobilisation. As the country’s economy continues to grow, there is likely to be increasing demand for financing from local companies, and the CSX can play an important role in meeting that demand.
The CSX also makes Cambodia more attractive for investors going forward. By providing a well-regulated and transparent platform for companies to raise capital, the Cambodia Securities Exchange helps to reduce the risks associated with investing in Cambodia. This, in turn, can help to attract more foreign investment to the country, which can further stimulate economic growth and development.
In conclusion, the Cambodia Securities Exchange has come a long way since its launch in 2011. It has played an important role in promoting economic development and good governance in Cambodia, and it is expected to continue to do so in the years ahead. As Cambodia’s economy continues to grow, the Cambodia Securities Exchange will be an important source of financing for local companies, and it will help to make Cambodia an even more attractive destination for investors.
How does the Cambodia Securities Exchange (CSX) help develop Cambodia?
There a 4 main reasons why the Cambodian Stock Exchange (CSX) has helped Cambodia’s social and economic development. These are listed below:
- Capital Mobilization: One of the primary ways in which the CSX contributes to the Cambodian economy is by mobilizing capital. By providing a platform for companies to raise funds through the issuance of stocks and bonds, the CSX helps to channel savings into productive investments. This, in turn, can help to stimulate economic growth and development.
- Improved Corporate Governance: In order to be listed on the CSX, companies must comply with strict disclosure and reporting requirements. This helps to improve corporate governance standards and increase investor confidence. Companies that are listed on the CSX are also subject to greater scrutiny from regulators and investors, which can help to deter fraudulent or unethical behavior.
- Increased Foreign Investment: The presence of a well-regulated and transparent stock exchange can help to attract foreign investment to Cambodia. Foreign investors are more likely to invest in a country that has a transparent and well-regulated financial system, as this reduces the risks associated with investing. The CSX can help to increase foreign investment in Cambodia, which can further stimulate economic growth and development.
- Job Creation: As companies raise capital through the CSX, they are able to expand their operations and create new jobs. This can help to reduce unemployment and poverty in Cambodia, and contribute to sustainable economic development.
In summary, the Cambodia Securities Exchange helps to boost the Cambodian economy by mobilizing capital, improving corporate governance, attracting foreign investment, and creating jobs.
Who is the most recent company to go public in Cambodia?
Cellcard, a leading mobile network operator in Cambodia owned by CAMGSM, is the most recent company to announce its plans to pursue an Initial Public Offering (IPO). This move is expected to have a significant impact on the Cambodia Securities Exchange. For more information about the move from the local media, click here.
CAMGSM’s IPO presents a unique investment opportunity with a guaranteed dividend of 7% per annum for five years and quarterly dividend distributions for Class A voting shares. This offering has been described as unparalleled by the stock’s underwriter, SBI Royal Securities.
The subscription period for the IPO began on April 5, 2023, and is open exclusively to CAMGSM customers with valid Cellcard SIM and ID registration. The opening share price is KHR 2,270 (approx. $0.57), with a minimum subscription amount of KHR 400,000 (approx. $100). The estimated market capitalization for CAMGSM is $1.14 billion.
Recent financial performance showcases strong growth for the company. Its 2022 unaudited management account revealed an 11.27% increase in revenue, reaching $189.95 million. EBIT, EBITDA, and net profit also saw strong growth over the last three years.
If fully subscribed, CAMGSM will trade at approximately 15 times its 2022 EBITDA of $78.11 million, considered on the higher side for the telco industry. The price-to-earnings ratio will be around 23 times its 2022 net profit of $49.99 million, deemed a “fair” valuation for a growing company.
What will be the impact of Cellcard’s initial public offering with the CSX?
The decision by Cellcard to pursue an IPO is expected to change this dynamic and propel an uptick in public investors entering the market. As one of the largest companies in Cambodia with over 4 million customers, Cellcard is expected to attract significant interest from both institutional and individual investors.
The IPO will provide an opportunity for investors to invest in a well-established company with a proven track record of success in the Cambodian market. This, in turn, is expected to increase the liquidity of the market and encourage more companies to consider going public in the future.
Moreover, the success of Cellcard’s IPO is likely to boost investor confidence in the Cambodian market and attract more foreign investors. This, in turn, will further increase the liquidity of the market and provide more opportunities for companies to raise capital.
In conclusion, Cellcard’s decision to pursue an IPO is a significant development for the Cambodian stock market. It is expected to increase the participation of public investors in the market, boost liquidity, and encourage more companies to consider going public. As the Cambodia Securities Exchange continues to mature and grow, it is likely to become an important source of financing for companies in Cambodia, providing them with the capital needed to expand their operations and drive economic growth.
What are the challenges surrounding the Cambodia Securities Exchange?
However, one of the major challenges facing the Cambodia Securities Exchange has been the lack of participation from public investors. Most of the trading activity on the exchange has been dominated by institutional investors and a handful of high net worth individuals. This has limited the liquidity of the market and has made it difficult for companies to raise capital through public offerings.
What are the top three success stories from the Cambodia Securities Exchange?
The top three Cambodia Securities Exchange success stories are as follows:
- Phnom Penh Water Supply Authority (PPWSA): PPWSA, a state-owned enterprise, was the first company to be listed on the CSX in 2012. Since going public, the company has seen its share price increase significantly, and its market capitalisation has grown to over $400 million. The company has used the funds raised through the CSX to invest in water infrastructure and expand its services, which has helped to improve access to clean water for the citizens of Phnom Penh.
- Grand Twins International (GTI): GTI, a garment manufacturer, went public on the CSX in 2014. Since then, the company has seen its share price increase by over 500%, and its market capitalisation has grown to over $200 million. The company has used the funds raised through the CSX to expand its production capacity and invest in new technology, which has helped it to remain competitive in the global garment industry.
- Acleda Bank: Acleda Bank, the largest commercial bank in Cambodia, went public on the CSX in 2020. The bank raised $15.2 million through its initial public offering, and its share price has since increased by over 40%. The funds raised through the Cambodia Securities Exchange will be used to expand the bank’s operations and improve its digital banking services, which will help to increase financial inclusion in Cambodia.
These success stories demonstrate the potential benefits of going public on the Cambodia Securities Exchange. By raising capital through the exchange, companies can fund their growth and expansion plans, increase their market visibility, and improve their corporate governance standards.
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