Cambodia Securities Exchange CEO HE Hong Sok Hour tells The Post he is certain that even the difficulties of 2020 cannot derail the capital market from ‘becoming a vital pillar to support economic growth’.
The global Covid-19 pandemic and the resulting economic uncertainty have weighed down most countries, resulting in negative economic growth, corporate bankruptcies, increased unemployment and a jump in poverty.
A drop in investor confidence in business growth has shaken the overall performance of stock market indices almost everywhere in the world.
However, we at the Cambodia Securities Exchange (CSX) do not see these as obstacles blocking our vision “To build a financial highway for Cambodia”.
Solid evidence worth mentioning is that in 2020 alone, we have reached an all-time record for the number of companies listed, with the CSX welcoming five new listed corporations – two of which are stock-issued, with the other three bond-issued.
On top of that, total market capitalisation has been enlarged to $2.45 billion, up by nearly 250 per cent compared to 2019.
The listing of Acleda Bank Plc – the largest local bank – has boosted market trading activities, driving intraday retail trades to $1 million for several consecutive days.
Furthermore, the first ever bonds trading through the negotiated trading method (NTM) also took place in 2020, and reached a total combined trading value of $11.08 million.
The newly introduced USD settlement mechanism has also proven a success after being implemented on its first NTM trading in riel of the Phnom Penh Water Supply Authority’s shares worth $2 million in 2020.
Despite these record-breaking events, the market has encountered some difficulties as well – for instance, the CSX’s index suffered a 17 per cent loss and average trading value dropped 27 per cent in the first 11 months of 2020.
Some of our promotional activities, such as overseas seminars, international cooperation and local real-world events, have also been suspended.
Nevertheless, we are expecting a positive outlook for the next fiscal year due to the imminent arrival of Covid-19 vaccines, along with the Asian Development Bank’s forecast of Cambodian GDP to rebound by 5.9 per cent from minus four per cent in 2020.
This economic growth and stability will cement the sustainability of the financial market and restore investor trust.
A brighter outlook allows us to project 2020’s delayed initial public offerings to resume their process, leading to an expected increase in the number of companies listed on the exchange in 2021.
Several big stock trades can be expected next year as a result of improved investor sentiment and confidence. We understand that the world will not immediately return to normal business after having the vaccines.
Companies need to adopt new ways of doing business.
The CSX is committed to bringing more innovative and creative solutions to strengthen our position as a prominent player in the financial sector and create more jobs for local candidates.
We firmly believe that the capital market, in the end, will become a vital pillar to support economic growth with better flows of funds from prudent investors to potential companies, and from those with an excess of funds to those in need of them.
HE Hong Sok Hour, Royal Government delegate in charge as the CEO of the Cambodia Securities Exchange