Local companies were recently asked to get in contact with the Cambodia Securities Exchange (CSX) if they are interested in issuing bonds.
“We would like to inform members, participants and the public that they can contact us directly for any application to issue bonds,” CSX’s announcement said.
In December, the Securities and Exchange Commission of Cambodia (SECC), the stock market regulator, approved the rules that will regulate the local bond market, together with three new financial tools that aim to boost trading on the local bourse.
Mr Soleil Lamun, director of CSX’s market operations department, told Khmer Times that with the announcement the operator of the securities market hopes to get the ball rolling and attract the first companies interesting in issuing bonds.
“We expect some bonds issued and listed this year,” he said. “Note, however, that the bond market is aimed at big companies and institutional investors who trade big amounts, up to millions of dollars.
“As a market, it won’t be as active and public as the regular bourse. It will have also less investors. Despite trading in much higher volumes, it will be less public.”
Mr Lamun said they have big expectations for the nascent bond market in the kingdom.
“As far as I heard, there are many institutions, particularly financial ones, who are interested in issuing bonds rather than stock, for various reasons.
“On the investor side, some companies like banks and insurance companies are more interested in buying bonds because they entail lower risk levels.
“Also, the bond market may attract more foreign investors, particularly at this early stage of the capital market in Cambodia.”
Prom Visoth, president CEO of Acleda Securities Plc., told Khmer Times they are considering applying for an agent licence to trade in the local bond market.
“We are naturally considering applying for a licence,” he said.
“The trading of ordinary securities is still quite small in the kingdom, but we have faith in the local capital market and believe it will expand in the near future.
“Regarding the bond market, we are quite confident that more and more companies will begin issuing bonds to help them finance their expansion.
“The bond issuance procedure is faster, requiring less documents and lower costs than listing,” he said.