Phnom Penh Post, Friday, 10 July 2009 14:01 SOUEN SAY
Commission director general offers road map to making initial public offerings, saying public trust and use of international accounting standards are critical
BETWEEN five and 10 companies are preparing to list on the forthcoming Cambodian stock exchange, an official at the Securities and Exchange Commission of Cambodia (SECC) said Thursday.
Speaking at a workshop at the Hotel Cambodiana outlining the road to initial public offerings (IPOs) in Cambodia, SECC Director General Ming Bankosal said that yet more companies were waiting to make a decision on whether to make the necessary auditing and accounting improvements that would be required to list.
“We would require companies that list on the Cambodian stock exchange to be leading companies … those companies must be profitable to persuade people that have capital to invest to generate profits together,” he said in a speech at the conference. “If they can make profit together, then the Cambodian economy will grow more quickly.”
The path to issuing an IPO would also require auditing by an internationally accredited firm, Ming Bankosal said, along with the necessary staff training and computer systems that would all add to the financial cost of meeting the necessary requirements.
“The companies we want to list … [must have a] good reputation and should be trusted by the public,” he said.
Ming Bankosal declined to name the companies that had begun making the necessary preparations to list on the exchange.
Sources close to the stock exchange planning process have previously told the Post that Electricite du Cambodge, Phnom Penh Water Supply Authority and Sihanoukville Autonomous Port – all state-owned – would be the first companies to list.
Government officials have, however, refused to confirm the identities of the first companies in Cambodia scheduled to issue IPOs.
Sam Ganty, a US-trained financial expert who has worked at the Foreign Trade Bank and Canadia Bank, said last month that it is mostly a handful of private banks that would qualify without making significant auditing improvements, given that many banks in the Kingdom already conduct international-level bookkeeping.
Given delays to the opening of the exchange – which had previously been scheduled for December – companies will likely have a while longer to make necessary preparations.
On Wednesday, contractor World City Co Ltd of South Korea told the Post that the Ministry of Economy and Finance had rejected its designs for the four-storey exchange building on the basis it was not considered sufficiently Khmer in architectural style.