The bourse regulators in Cambodia and Thailand this week announced plans to work together to boost their capital markets through cross-border listings and depositary receipts.
During a meeting on Monday in Phnom Penh, Ruenvadee Suwanmongkol, secretary-general at the Securities Exchange Commission (SEC) in Thailand, and Sou Socheat, general director of the Securities and Exchange Commission of Cambodia (SECC), agreed to sign a memorandum of understanding on cooperation next month.
The MoU will cover equity offerings and depositary receipts and will allow entities to make an offer or list stock outside their countries.
The agreement is seen as an effort to boost the development of the Cambodian bourse, which launched in 2012 but has thus far attracted just five companies to the main board.
During the meeting on Monday, the regulators exchanged views on cooperation and assistance, according to a statement issued after the meeting.
“Building on a MoU on cooperation signed in 2014, SECC and SEC Thailand have agreed to sing an additional MoU on cross-border equity offering and the issuance of DR which will allow issuers from both Cambodia and Thailand to make an offer or to list their equity securities outside the issuer’s home jurisdiction,” it said.
“Cross-border equity offering will help expand the issuers’ businesses, increase their liquidity derived from trading in more than one exchange and give them access to a larger pool of potential investors,” it said.
The MoU will establish a working group composed of SECC and SEC Thailand officials.
Kim Sophanita, director of the market operations department at the Cambodia Securities Exchange (CSX), said the cooperation will be an important milestone for CSX.
“CSX welcomes this cooperation. We believe that it will provide mutual benefits because it will allow listed companies and investors in both countries to access more funding and a wider offer of investments,” she said.
“There are many examples of this type of cooperation in other markets. CSX aims to enhance its offer with products from Cambodia as well as Thailand, China, Korea and more.”
She said both capital markets will benefit from the cooperation. “The Thai stock market is no doubt more attractive but Cambodia is a big market for Thai products.”
Prom Visoth, president and CEO of brokerage firm Acleda Securities, said the agreement will improve the local capital market by bringing more products online, increasing trading activity and attracting new companies.
“CSX will soon have more securities-related products available. More products mean more choice for investors. Moreover, the agreement will encourage more local companies to launch IPOs,” he said.
Besides the five companies listed on CSX’s main board, two local companies (Hattha Kaksekar Limited and LOLC) have issued bonds. ABA Bank will likely follow suit in upcoming weeks, after recently obtaining SECC’s approval to issue bonds.
During the seven years that the bourse has been active, listed companies have raised a combined $120 million, according to SECC.