Cambodia and Thailand on Tuesday signed a memorandum of understanding on cross-border equity offerings and depositary receipts, paving the way for Thai companies to list at the local bourse and vice versa.
The agreement was signed in Bangkok by Sou Socheat, director-general of the Securities Exchange Commission of Cambodia (SECC) and Ruenvadee Suwanmongkol, SEC Thailand’s secretary-general.
Tuesday’s signing follows a courtesy visit to Cambodia by a SEC delegation last month, where the basis of the agreement was agreed upon.
The MoU is a milestone in the relationship between the bourse regulators.
“This MoU covers the establishment and functions of a task force composed of SEC Thailand and SECC officials that will work on implementing cross-border equity offerings and the issuance of DR,” SECC said in a press release yesterday.
“It also covers the issuance of guidelines to help issuers who wish to offer securities, either equity or DR, in Thailand and Cambodia,” it said.
SEC’s Ms Ruenvadee said in the statement that Cambodia and Thailand are well connected in terms of economic, social and cultural activity and that SEC Thailand and SECC are already cooperating closely.
The MoU, she said, is an important step in enhancing capital market cooperation between the two regulators to successfully implement cross-border listings and DR issuance.
“Through this strong collaboration, a corporation from Cambodia could become the first foreign company listed on Thailand’s stock market, after regulation on cross-border equity offering entered into force in 2015.
“DR is also another financial instrument that has been received with great interest by the businesses in both countries. Thus, we strongly believe that this MoU will create many business opportunities as well as sustainable growth and prosperity in the region,” she said.
SECC’s Mr Socheat said, “This MoU provides alternative ways for companies in Cambodia and Thailand to access capital, expand, increase liquidity from trading in more than one exchange and have access to a larger pool of potential investors.
“In addition, we are sure this MoU will be a good model for cooperation in the region,” he said, adding that, “We are optimistic that capital markets in the region will grow together.”
The Cambodia Securities Exchange was launched 2012 and now has five companies listed on its main board, while three – Hattha Kaksekar Limited, ABA Bank and LOLC – have issued bonds.
A total of $120 million have been raised at CSX since it launched seven years ago.