|Phnom Penh Post, Written by Chun Sophal and Nguon Sovan|
|Thursday, 11 September 2008|
Establishment of valuation association a key step in opening the Kingdom’s stock market, but some business leaders say it will not be capable of doing the job
The requirement that companies declare their assets is widely believed to be one of the biggest obstacles to establishing Cambodia’s stock market, sources say. Most enterprises that could list are family-owned and guard the value of their businesses.
CAMBODIA’S first agency to assess the value of corporate assets opened last week, in what company sources are describing as a key step in establishing a Cambodian stock exchange.
But business figures are sceptical the new body will be able to establish sufficient nationwide transparency in time to meet the stock market’s 2009 deadline for opening.
Sung Bonna, chairman of the new National Valuation Association of Cambodia (NVAC), which is supported by the Ministry of Economy and Finance, said the body will play an important role in Cambodia’s future growth.
“We will try to push this nascent association to attract foreign investors and to assist in the process of setting up a stock exchange next year,” he said, adding that the stock market will not go ahead in the absence of credible asset evaluations.
“If we have professional assessors and good management, the stock market process will be smoother,” he said.
In Channy, CEO of Acleda Bank, said the new agency could provide independent assessments for firms wishing to register on the Kingdom’s stock market.
“We need an assessor that has enough independence to determine the accurate value of a company’s assets. This concept generally exists in other countries,” he said.
‘2012 more realistic’
But Nguon Meng Tech, director general of the Cambodian Chamber of Commerce, said he does not think the association will be successful.
“I do not believe that they are capable enough for this work for the time being,” he said.
He added that the 2009 deadline for a Cambodian bourse was little more than a pipe dream.
“Cambodia does not have enough human resources and experts,” he said, adding that 2012 was a more realistic target.
In Channy said Acleda currently assesses its own assets and is unlikely to use NVAC until it establishes more branches across the country. “We do not reject the use of the service, but we trust our own assessment,” he said.
Likewise, Kong Triv, CEO of KT Pacific Group, said that he has not considered using the NVAC to evaluate his company’s assets. “We will wait and see how independent [it] is and how it builds confidence, and then we will consider it,” he said.
Sung Bonna admitted the NVAC was untested, but he said he was optimistic it will valuate properties accurately. “The association will seek training from foreign experts to make sure that the evaluation is internationally acceptable,” he said.
Cambodian Economic Association President Chan Sophal said Cambodia must have a property evaluation association that is fully independent, “otherwise companies could lose confidence”.