Three private companies aim to list in the Cambodia Securities Exchange (CSX) in the first quarter (Q1) ending March 31, in a testament to the growth of the local stock market, which is becoming increasingly evident to the public as a viable source of capital for businesses to expand, according to CSX CEO Hong Sok Hour.
Speaking to The Post on January 24, Sok Hour commented that the locally-owned educational enterprise Mengly J Quach Education Plc (MJQE) is preparing to launch an initial public offering (IPO), while the two other companies plan to issue corporate bonds.
He declined to name the bond issuers, but confirmed that one is a telecommunications company and the other a financial firm.
The three securities will be issued “soon”, he assured, adding that, in the future, “we expect to attract large companies to issue equity or corporate or green [debt] securities to raise additional funds to expand their business”.
Earlier this month, Sok Hour confirmed that MJQE had begun submitting the requisite documents for a listing eligibility review, and planned to finish doing so before the end of January.
Mengly J Quach, the founder, chairman, CEO and namesake of MJQE, an umbrella for Aii Language Centers (Aii) and American Intercon Schools (AIS), recently told The Post that the plan is to raise funds through an IPO on the CSX’s Main Board, expand MJQE’s business and reach its goal of 160 active campuses nationwide.
Previous plans to go public were derailed in 2019 amid “kind of bad” economic signs, he lamented. And then Covid-19 arrived, forcing MJQE to keep its IPO ambitions on hold until it determined that the pandemic storm had cleared, he added.
“One of the main purposes will be to raise funds to open more schools and reach areas where there is demand – we have over a hundred schools to go, right now we only have 15 campuses,” Mengly said.
The websites of Aii and AIS show that they have seven and eight campuses, respectively.
Mengly also revealed that as many as three public offerings are on the table, with MJQE expected to float a stake of between six and 10 per cent in its IPO.
But in the event of stronger-than-anticipated demand, Mengly expressed his keenness to seek approval for a larger quantum of shares in the initial offering, but indicated a cap of 20 per cent.
Meanwhile, in its “CSX 2022 Achievements, Outlook, and Plans for 2023” bulletin, the local bourse revealed a number of targets for this year, such as doubling the number of new securities listings to 14 and the average daily trading value to $1 million, the latter of which would make for a third consecutive year of record highs.
The stock exchange also aims to triple the number of new trading accounts this year, the bulletin said.
The CSX’ Sok Hour on January 19 reported that a total of 18 companies feature on the local bourse – nine of which have listed shares, while the rest have issued bonds. The firms have raised a total of $317 million through their offerings.
To date, around 36,000 CSX trading accounts have been opened, he said, confirming that the average daily trading value on the bourse reached about $500,000 last year.
The CSX is co-owned by the finance ministry and the Korea Exchange (KRX) on a 55:45 basis.