The Cambodia Securities Exchange (CSX) undertook a range of activities in 2020, from carrying out the first listing of a bank to attracting a rising number of investors.
The Kingdom’s bourse also invested great effort into promoting listings and raising public awareness on how the securities market in Cambodia works.
Thanks to the listing of two equity securities on the CSX’s main board – where Acleda Bank Plc, the biggest local bank in Cambodia, alone takes up 76 per cent of the total market capitalisation – the CSX’s market capitalisation of listed stocks rose to $2.45 billion at the end of November, up from $0.72 billion in the same period in 2019.
Not only did market capitalisation grow, the number of trading accounts registering with the CSX’s member brokers also rose by 18.3 per cent.
Reflecting investors’ growing interest in the CSX, the total number of trading accounts reached 26,657 at the end of November.
Along with the number of trading accounts, Mobile Trading System (MTS) users represented huge growth of more than 100 per cent.
This figure represents a dramatic rise from just a little over 5,000 users at the end of November 2019 to more than 10,000 users in 2020, indicating the convenience of MTS as a tool to manage self-trading activities.
This year also saw a surprising change in trading patterns at the CSX.
Domestic investors who took up only eight per cent of total trade for 11 months in 2019 cornered 88 per cent of the portion for the same period in 2020.
Similarly, individual investors who held only a near 13 per cent of total trade for 11 months in 2019 impressively captured 91 per cent for the same period in 2020.
On July 31, there was trade using the CSX’s newly introduced USD settlement mechanism.
This allows the trading partners of equity securities through the Negotiated Trading Method (NTM) to have the trade executed in riel and settled in US dollars.
This happened with the trade of the Phnom Penh Water Supply Authority (PWSA), with a trading volume of 1,588,694 shares and a trading value of 7,943,470,000 riel.
This year also witnessed the first bond trading through NTM, that of Prasac Microfinance Institution Plc, which took place on May 5 and was worth an enormous $10 million.
As part of the campaign promote listings, the CSX hosted a series of monthly events called “35 minutes on Business”, broadcast live on the CSX Facebook page.
During these sessions, the management of trending local businesses and SMEs discuss a wide range of topics related to a specific business model, while the importance of raising capital to expand businesses is also discussed.
The CSX actively co-hosted workshops and seminars at business clubs and associations in Cambodia to talk to businesses that wish to be listed on the bourse about the requirements necessary for doing so.
Raising public awareness
The CSX also initiated many activities and mechanisms to create a friendly environment for investors and remove trading barriers.
For example, the CSX has been working with Acleda Securities Plc to make it possible for investors to open trading accounts completely online without the need to physically visit securities firms.
Recently, the CSX decided to extend the provision of MTS for free for another two years, until the end of 2022, to further promote and boost trading activity.
To build trust in the companies listed, the CSX hosted “The Listed Company Forum” allowing management teams from listed companies to showcase their business progress, financial health and strategic plans, as well as outline potential risks.
To raise public awareness on securities investment, the CSX has introduced the “CSX VDO Competition”.
Furthermore, the CSX in November signed a memorandum of understanding (MoU) with The Phnom Penh Post, and appointed the Kingdom’s most respected news outlet as the Cambodian bourse’s official media partner.
The MoU aims to promote awareness of the securities market in Cambodia and expand the scope of disseminating to the public timely and reliable news and information related to the securities market.