A little over a month after joining the Cambodia Securities Exchange, the stock market’s newest listing has failed to attract much interest.
Trading has been sluggish for shares of the exchange’s fifth addition, the Sihanoukville Autonomous Port (SAP), with some days seeing no purchases or sales. It’s indicative of a larger problem on the market; activity remains slow while the number and size of listed companies remains relatively small.
On June 8, the initial opening price was 5,360 riel per share, which fell to 5,100 riel by closing that day. Since then, there has been little movement, the amount fluctuating slightly but always closing at between 5,000 and 5,100 riel per share. The exchange has been open for 25 days since SAP’s listing, of which 10 saw no activity or movement in the port’s shares.
Lamun Soleil, director of the market operations department at the Cambodia Stock Exchange (CSX), wasn’t certain as to why the SAP’s stock had not performed well. Investors believed in the company and “intend to hold the shares for a long time,” he said, concluding that “the situation is likely to continue if no action is taken.”
SAP’s CEO, Lou Kim Chhun, also noted the poor trade volume, but held that he had to study the issue to determine whether it was company-specific or a more widespread trend with the stock exchange. “The buy and sell activities on the stock market seems to be very little from all the listed companies, not just Sihanoukville Port,” Kim Chhun said. “We are now watching and consulting with CSX to find out whether the low activity is only happening to us or everybody.”
Nevertheless, the port’s initial public offering (IPO) last month was fully subscribed, with the majority of the public shares—amounting to 25 percent of the total— sold to the Japan International Cooperation Agency, raising a total of $27m. The market’s most-active stock is that of Phnom Penh Autonomous Port, but even company chairman, Hel Bavy, said trading had not met the company’s expectations.
“We did sell out 20 percent of the shares to the public at the IPO, and the value did increase [for] each share,” he commented. “But it’s still relative new products. Even the buyers are new.” He encouraged the government to work further with the five listed firms and organise meetings so they could discuss their experiences, and further promote listings to spur more activity.
The government’s ambitious 10-year plan for the financial sector includes a series of goals to encourage banks and small and medium-sized enterprises (SMEs) to list on the exchange, though details of how it would implement those plans remain unclear.
Soleil, from CSX, said the exchange was seeking to bring more listed firms to the stock market, including “big, well-known and profitable or potentially profitable companies” while at the same time cautioning that progress in the nascent exchange market would remain slow.
“The Cambodian capital market has been complementing the banking sector, but still in a very small part,” he commented. “In my personal opinion, it would take at least 5 more years before the capital market takes noticeable share in the Cambodian financial system.”