The nascent Cambodia Securities Exchange is set to list between three and four new companies on its bourse soon this year.
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CSX CEO Hong Sok Hour said during the official launch of the corporate bond LOLC (Cambodia) on Friday that so far it had listed six companies, of which five are listed for ordinary equities and another, Hattha Kaksekar Limited, listed its corporate bonds.
He said the six companies have mobilized some $110 million worth of equity securities.
“These companies not only receive long-term capital for investment, but they also received tax incentives, which currently account for 50 percent of income tax and they also got a good reputation and confidence from the public,” he said. “And today [Friday], we listed another company, LOLC Microfinance Institution on the CSX.”
“Soon within this year we will have three or four companies that will list their securities and bonds,” he added.
Sok Voeun, CEO of LOLC, said during the launch of listing that the company obtained an approval letter on its corporate bond issuance from the National Bank of Cambodia on Feb 25, 2019 to raise KHR 80 billion ($20 million) to list as corporate bonds on the CSX.
LOLC offers investors not only fixed-coupon bonds but also FX-indexed bonds and the bonds are typically designed to provide investors with an embedded tool to hedge future exchange risks.
Both fixed-coupon and FX-indexed bonds are fully in line with the government’s policy of promoting the use of the local currency as they are both denominated in riel. The payments of interests and principal will also be made in riel.
“LOLC believes that obtaining additional capital from the corporate bonds will enable us to expand our business operation,” Mr Voeun said. “In addition, issuing bonds on CSX will also provide extra exposure for our institution to gain more public confidence.”
With the increase in the number of listed companies, Mr Sok Hour said that the number of trading accounts and market share prices have also increased considerably.
Market capitalization increased from about $442.9 million at the end of 2018 to about $534.3 million by the end of the first quarter of 2019, an increase of about 21 percent. The CSX Index Climbed to 671.65 points in the first quarter of 2019 from its peak of 480.98 points in 2018.
The average daily trading volume in the first quarter of 2019 reached 67,311 shares per day, up four times from 2018’s average of 16,229 shares while the average volume of daily equities trade doubled from about $26,719 per day in 2018 to around $52,816 per day in the first quarter of 2019.
“These results reflect the progress of the market that we have never had. We believe that the CSX will develop at a faster rate in the coming years,” Mr Sok Hour added.