Logo of Phnom Penh Post newspaper Phnom Penh Post - SERC, CCC urge more SMEs to issue IPOs, list on bourse

SERC, CCC urge more SMEs to issue IPOs, list on bourse

Content image - Phnom Penh Post
To date, just two companies have listed securities on the Cambodia Securities Exchange’s (CSX) Growth Board – DBD Engineering Plc and Telcotech Ltd. Hean Rangsey

SERC, CCC urge more SMEs to issue IPOs, list on bourse

The Securities and Exchange Regulator of Cambodia (SERC) and Cambodia Chamber of Commerce (CCC) on December 27 urged local small- and medium-sized enterprises (SME) to issue initial public offerings (IPO) and list on the Cambodia Securities Exchange (CSX).

This, they said, would provide new and long-term financing options and tax incentives, and help build sustainable businesses with stronger corporate governance arrangements.

Speaking at a workshop on financing options for local SMEs, SERC director-general Sou Socheat underscored that these businesses face a number of challenges related to skills, technical knowledge, the fulfilment of legal obligations, competition with foreign enterprises, and especially a lack of capital.

The CSX’s Growth Board was launched in late 2015 as a secondary platform to lift some of the barriers for listing and cater more to companies with less access to capital or financial resources.

Socheat noted that the SERC has amended its regulations to make it easier for SMEs to issue securities and list publicly on the Growth Board, which he said would contribute to their development.

According to SERC regulations, to list on the secondary board, companies are required to have a minimum of $500,000 in operating capital, and release one year of audited financial results, which must show a positive net profit or positive operating cash flow with gross profit margin of at least 10 per cent.

“An IPO will bring enormous benefits for SMEs, including strengthening their reputations, reducing their subsequent financing costs – even through bank borrowing, and strengthening good governance,” Socheat said.

Listing will also ensure compliance with the law, offer tax incentives, and help companies operate transparently and sustainably, he said.

CCC president and Royal Group of Companies Ltd chairman Kith Meng proposed raising capital through capital markets as a worth-while option, indicating that the associated regulations and protocols could better enable companies to adhere to recognised standards, including good governance principles and transparency rules.

Submarine fibre optic cable solutions provider Telcotech Ltd, one of Royal Group’s companies, decided to issue $20 million in bonds on the CSX after weighing the benefits of listing on the bourse, he shared.

“Consider raising capital through the capital market. Although there are some obstacles to be addressed, don’t worry, because we have securities regulators to provide ample support during the operation, and the capital market is a fantastic place to put your money, especially for long-term investments,” Meng said.

To date, just two companies have listed securities on the Growth Board – DBD Engineering Plc and Telcotech.

MOST VIEWED

  • Construction begins on $1.5B Kampot seaport

    The International Multi-Purpose Logistics and Port Centre, principally invested by Kampot Logistics and Port Co Ltd and projected to cost $1.5 billion, has officially broken ground in Bokor town, Kampot province. The multi-purpose logistics and port centre, located in Prek Tnaot commune, will be built on

  • Cambodia eyes key role in electronics, auto hubs in SEA

    Two roadmaps, part of the LDC’s economic diversification plan, were designed to see it through its migration process, but experts say the journey might be arduous, particularly in the presence of two established hubs in the region By 2028, Cambodia hopes to have exited the

  • Hun Neng, lawmaker and PM’s brother, passes away aged 72

    Hun Neng, chairman of the 4th Commission of the National Assembly, has passed away from heart disease at the age of 72 on the afternoon of May 5, according to the Ministry of Information. Hun Neng is the older brother of Prime Minister Hun Sen, and was

  • Massive stingrays may live in Mekong’s deep pools

    US scientists have suggested that unexplored deep pools in the Mekong River in an area of Stung Treng could potentially be home to significant populations of giant freshwater stingrays, one of the world’s largest freshwater fish species. This comes as a fisherman hooked a 180

  • PM meets with US business giants

    Prime Minister Hun Sen has met with a number of major US companies who have expressed interest in investing in Cambodia, in a meeting convened by the US-ASEAN Business Council (US-ABC). A delegation of companies – including Amazon, Meta, Chevron, ConocoPhillips, ExxonMobil, Ford, Visa and Pernod

  • CCC team off on US business trip

    The Kingdom’s leading economists and private sector representatives have called on the US to renew its tax preferential status for Cambodian exports, as a Cambodia Chamber of Commerce (CCC) delegation departed for a weeklong business visit to the US, where they will meet with