Sovereign bonds, which will be issued sometime this year, will serve as a new financial instrument for institutional investors, such as the National Social Security Fund, pension fund, insurance companies and banks.
The securities will also enable the state to raise funds for economic development, said Minister of Economy and Finance Aun Pornmoniroth.
“The government bonds are expected to be popular on Cambodia Securities Exchange [CSX] and provide benchmark data for corporate securities trading and financial analysis as implemented in countries with a growing securities sector,” he said.
Speaking at the National Conference on Cambodia’s Securities Market on May 16, entitled “A Decade of Market Emergence and Ways Forwards”, Pornmoniroth noted that CSX was established in 2010 through a joint venture with the Korea Exchange (KRX).
Trading began with the exchange’s first initial public offering (IPO) by state-owned Phnom Penh Water Supply Authority on April 18, 2012.
Since then, a total of 16 companies feature on CSX – nine companies have issued shares on the Main Board and Growth Board – and seven corporations have listed their bonds, said CSX CEO Hong Sok Hour.
The equities and bonds have raised a total of $281 million.
“Due to the tax incentives and cooperation by the stakeholders, CSX has achieved a proud result. Although our market is relatively small compared to our neighbours, our trading volume has increased significantly since 2019, 2018 and last year.
“The daily trading volume was around $20,000 and increased to nearly $160,000 in 2019, but fell slightly to about $110,000 in 2020 due to Covid-19,” he said.
However, due to the government’s effective management of Covid-19 in 2021, trading volume increased to more than $270,000 and surged to over $1 million per day in the first four months of 2022, thanks to active trading on ACLEDA shares.
Sou Socheat, director-general of Securities and Exchange Regulator of Cambodia (SERC) said 31,640 investor identification numbers were provided, 34 per cent of whom are female investors and 86 per cent of the total being Cambodians.