The Advanced Bank of Asia Limited (ABA Bank), a member of the National Bank of Canada Group and one of the leading commercial banks in Cambodia, traded its first bond earlier this week.
The event opened a new chapter of bond trading on the Cambodia Securities Exchange (CSX).
A CSX announcement said the ABA bond was traded at 100,000 riel ($25), and became the first traded bond to yield 8.783 per cent with the trading volume of 38 units, equivalent to 3.8 million riel ($950).
“Today marked the first-ever bond trading in CSX since the first bond was listed on December 5, 2018,” the CSX said.
CSX market operations department acting director Kim Sophanita told The Post on Wednesday that the first ABA bond was traded that on Dec 5.
It was a retail trade between Cambodian individuals both at the buy and sell-side with the quantity of 38 bonds at 100,000 riel (yield 8.78 per cent).
“It is a historical date proving that investors really can trade in bonds through CSX’s platform. Bond investors are those who prefer a fixed income. It is very similar to a fixed deposit at the bank.
“But, what makes the bond extra special compared to a bank deposit is that bond investors can sell it before it matures at an agreed price so they can get some interest back.
“Once a bond is listed on the CSX, it’s open for the public to buy from existing bondholders. However, trade cannot happen unless there are matchable prices from sellers and buyers,” she said.
ABA chief marketing officer and corporate secretary Igor Zimarev told The Post on Wednesday that the total volume of bonds listed on the CSX is 284.8 billion riel ($71.2 million), so ABA’s 84.8 billion riel ($21.2 million) worth of corporate bonds constitute 30 per cent of the market share.
“ABA’s shares are not traded in the market. What we issued in August was not shares, but corporate bonds, which are the first bonds from a commercial bank with international credit rating. It is also the first to be offered to retail investors.
“Review and approval of the bonds with such a sophisticated structure by several regulatory authorities took some time, but we consider this reasonable.
“We believe that the listing of corporate bonds bears a good image for ABA, as it shows transparency in our operations and a strong commitment to the financial sector.
“We also hope our bonds contribute to the development of the capital market, providing investors with more tools for their activities, as well as the promotion of the national currency,” he said.
Acleda Securities president and chief executive officer Prom Visoth said that ABA was the third bond issuer on CSX but their bond issuance covered both retail and institutional investors.
The face value of each bond was 100,000 riel and the number of bond units issued was 848,210. The number of bondholders (investors), Visoth said, was 65.
“The bond market trades in bond units issued by the issuer on CSX. Trading activities happen when there are buyers and sellers on the market,” he said.
ABA which is the third bond issuer after LOLC and Hattha Kaksekar Limited had been listed on the CSX since late August. The Bond was assigned the “ABAA22A” bond rating.
ABA Bond was issued on August 14, for the total amount of 84.821 billion riel (approximately $21 million). It has a three-year maturity and pays a coupon of 7.75 per cent per annum.