The trading price of Sihanoukville Autonomous Port (PAS) has failed to live up to high expectations after its debut on the Cambodia Securities Exchange last month.
The state-owned enterprise was the fifth company to be listed on the bourse on June 8. It raised around $27 million in one of the biggest initial public offerings (IPO) the exchange has ever seen.
The company issued some 21.4 million shares to the public at 5,060 riel ($1.26) each in the IPO, which was fully subscribed. However, since the company began trading, take up has been limited.
The share price of 5,060 riel has remained fairly stable since, with no improvements but some small dips. It closed yesterday at 5,060 per share. Trading volume has been almost the same every day at 85,771,967 shares, according to data from CSX.
Lamun Soleil, director of the CSX marketing operation department, said the share price of PAS has struggled compared with previously listed companies such as Phnom Penh Autonomous Port. He added that the slow progress of PAS on the stock exchange doesn’t reflect the business performance of the company.
“PAS’s trading performance has not been as good as PPAP was, even though they have similar businesses and potential growth,” he said. “The stock trading performance does not affect the company in real terms, other than its reputation. It also affects the reputation of the company who underwrote and brought PAS to the market.”
Svay Hay, president and CEO of brokerage firm Acleda Securities, said that overall the price of PAS is good with fluctuation slightly higher than the listed price. However, the daily volume is smaller than the market average. “In a market with more value and income approach investors and less growth approach investors or market makers, the trading volume will be limited for a while at the said price level,” he explained.
He added that for a listed company, especially in the port industry, their fundamental factor and guaranteed dividend yield will attract more investors in the medium and long term, adding that the success of related programmes, such as stock trading competition and market education, will be continued accordingly.
“The trading account is increasing [on] average more than 15 percent annually. It’s good growth, but the market needs a better activation rate of trading, trading volume, and also more listed companies, potential state-owned enterprise, and optional products,” he added.
Soleil said that while the trading price of PAS is low, the underwriter has to take action to boost liquidity in the market to help the price increase. “The solution should be that PAS’s underwriter SBI Royal Securities intervenes as a liquidity provider to support the trading price and volume of PAS’s stock. CSX, at any time, welcomes SBI to be a liquidity provider on PAS’s stock.” Such a move would allow smaller investors to buy stocks and boost confidence in the CSX, as prices stabilise and trade volume increases.
Seng Chan Thoeun, head of corporate finance at SBI Royal Securities, agreed that PAS has been trading at a lower level than expected. According to Chan Thoeun, SBI’s team is studying price fluctuation on the market before taking any measures to boost the price of PAS shares.
“We have already discussed mechanisms to support the trading price with CSX after we learned that we don’t have much liquidity. We think we will use a liquidity provider programme to support it,” he said. “Next we need to get internal approval from the board in order to implement to programme,” he added, saying he is not sure when the permission will come through.