Logo of Phnom Penh Post newspaper Phnom Penh Post - With strong credentials, SECC forges ahead to strengthen capital market




With strong credentials, SECC forges ahead to strengthen capital market

Content image - Phnom Penh Post
The SECC is conducting an extensive awareness campaign to promote the relatively new securities market. Photo supplied

With strong credentials, SECC forges ahead to strengthen capital market

Since its establishment in 2011 to regulate the securities industry, the Securities and Exchange Commission of Cambodia (SECC) has come a long way in building a steady and investor-friendly capital market.

After a lively 2020, the Cambodian securities market is aiming to set a similar pace in 2021, with at least two more initial public offerings (IPO) in the pipeline.

While stock exchanges around the globe took hits from the unpredictable economic headwinds due to the coronavirus crisis, the Cambodian capital market was on a growth trajectory.

It performed better than other sectors in the Kingdom, such as tourism, construction, garments and manufacturing, which all suffered due to the Covid-19 outbreak that disrupted the economy.

Certainly, the numbers are looking strong.

In 2020, the Asian Development Bank (ADB) forecast that the Cambodian economy would decline by around four per cent but rebound to 5.4 per cent in 2021.

Another positive indicator is the World Bank’s forecast released in December that revealed that foreign direct investment (FDI) inflows into sectors such as agriculture and the manufacturing of bicycles, electronic parts, vehicle parts and accessories for export have been on the rise.

In addition, rice and farm product exports have surged, while domestic tourism is also picking up.

Meanwhile, Cambodia will receive trade privileges under the UK’s new Generalised Scheme of Preferences (GSP) from January 1, after the EU partially withdrew its Everything But Arms (EBA) scheme.

Given these developments, with improved growth and strong economic fundamentals, the securities market is expected to be on strong footing in 2021.

In 2020, the number of issuers rose significantly, with two IPOs and three bond listings despite an uncertain economic outlook.

In the first 11 months of that year, market capitalisation rose from $716.07 million to $2.45 billion – a 242 per cent jump compared to the same period the previous year.

In 2021, a number of other factors are set to drive the Kingdom’s capital market.

The Senate on December 21 approved a draft law that allows the government to raise bonds on the capital market – considered a risk-free financial instrument, this is an important tool to finance government investment, and one that will further boost the capital market.

The move by the CSX to waive trading fees for investors using the Mobile Trading System for the whole of 2021 is another bonus for investors.

And the new Collective Investment Scheme (CIS) securities product will be made available on the market to provide a further option for investors.

Another key factor is the government’s incentives such as the 100 per cent tax free on capital gains and 50 per cent deduction on withholding tax, dividends and interest rate, which are all yet to be taxed.

The growing volume of trading activities on the securities market clearly reflects the attractiveness of the CSX as a viable option for investors.

There has been a remarkable increase in investors – from a measly 8,000 in 2017 to almost 26,000 in 2020.

With these numbers indicating a growing awareness of the Cambodian stock exchange and its benefits among the public and potential investors, the joint efforts of the SECC and other market players to promote the capital market through training programmes, seminars and workshops have indeed paid dividends.

MOST VIEWED

  • ‘Kingdom one of safest to visit in Covid-19 era’

    The Ministry of Tourism on January 12 proclaimed Cambodia as one of the safest countries to visit in light of the Kingdom having been ranked number one in the world by the Senegalese Economic Prospective Bureau for its success in handling the Covid-19 pandemic. In rankings

  • Ministry mulls ASEAN+3 travel bubble

    The Ministry of Tourism plans to launch a travel bubble allowing transit between Cambodia and 12 other regional countries in a bid to resuscitate the tourism sector amid crushing impact of the ongoing spread of Covid-19, Ministry of Tourism spokesman Top Sopheak told The Post on

  • Kingdom accepts Chinese vaccine, PM first to get jab

    Prime Minister Hun Sen said China would offer Cambodia an immediate donation of one million doses of the Covid-19 vaccine produced by the Sinopharm company. In an audio message addressing the public on the night of January 15, he said Cambodia has accepted the offer and

  • Reeling in Cambodia’s real estate sector

    A new norm sets the scene but risks continue to play out in the background A cold wind sweeps through the streets of Boeung Trabek on an early January morning as buyers and traders engage in commerce under bright blue skies. From a distance, the

  • Quarantine site in north Phnom Penh inaugurated

    A four-building quarantine centre in Phnom Penh’s Prek Pnov district was formally inaugurated on January 6. The centre can house up to 500 people, according to Phnom Penh municipal governor Khuong Sreng. At the inauguration ceremony, Sreng said the municipal hall had cooperated with the Ministry

  • ‘Beware of WhatsApp fraudsters’

    The Ministry of Posts and Telecommunications warned members of the public who use WhatsApp to vigilantly guard against a new trick employed by hackers that involves the use of six-digit codes sent to potential victims via the popular messaging app. The ministry said hackers could