Starting on January 9, the Cambodia Securities Exchange (CSX) will enable three new tools that aim to boost trading on the bourse by attracting more players to the stock market and increasing the number of transactions.
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In accordance with a prakas promulgated by the Securities and Exchange Commission of Cambodia (SECC) on December 26, the financial mechanisms known as Negotiated Trading Method (NTM) and Market Order (MO) will be made available to investors, while the daily price limit (DPL) will be increased from the current 5 percent to 10 percent.
“NTM is a new trading method based on auction. It will allow a pair of investors to place and execute their confidential orders in a single large transaction after successful negotiations on the transaction conditions,” CSX’s press release said.
NTM is a form of block trading that allows a pair of big investors, with orders of more than 50,000 shares or $50,000, to easily trade in a secure manner outside the order book. CSX’s statement also provided details on the other two initiatives, explaining that MO “will be a new add-on equity order type in the market in response to the demand of investors who aim to buy or sell securities immediately at the market price”.
“Increasing DPL to 10 percent, meanwhile, will allow more capital gains and leave more room for investors to determine trading.”
Prom Visoth, the CEO of Acleda Securities, said the three mechanisms will help improve and build up participation in the bourse.
“NTM will secure investors’ trading in a single large transaction, provide order confidentiality to large investors and lessen the impact on market price and market sentiment,” he said.
“MO allows more attractive possibilities of capital gains to investors and leaves more room for market price rebounding, given that the current prices are low.
“DPL, meanwhile, can serve investors who want to immediately enter or exit the market at market price,” he added.
Asked how stock brokers and dealers will benefit from these tools, Mr Visoth said they can expect their incomes to rise as a larger volume of transactions in the bourse means more fees for them.
“We have high expectations. The market will be more robust if these new mechanisms are launched and operated as planned,” he said.