Cambodia Stock Market Enters Upward Trajectory with Major Banks Going Public This Year

[Asia Economy Phnom Penh Correspondent Kilhyun An] Total sales of Cambodian listed companies increased by 45% year-on-year until the third quarter of last year. With a 60% increase in market capitalization, positive prospects are emerging for the Cambodian stock market.

Hankyungtae, Head of Yuanta Securities Cambodia Branch

The Cambodian stock market is known as a mini-market with 5 stocks and 3 corporate bonds listed. The Cambodian stock market was launched in 2012 as a joint venture between the Korea Exchange and the Cambodian government. Although it was trapped in a box range for several years after opening, it began to rebound from 2018, and by the end of last year, it was evaluated to have entered a full-fledged bull market, rising 58.4% compared to the beginning of the year.

Ha Jongwon, Vice Chairman of the Cambodia Securities Exchange (CSX), said, "It is meaningful that the Cambodian stock market rose while neighboring countries' stock markets such as Thailand (0.9%) and Vietnam (2.8%) were sluggish," adding, "It is noteworthy that the stock price increase was gradually achieved thanks to improved earnings."

The total sales of the 5 companies listed on the Cambodian stock market reached $270 million in the first to third quarters of last year, a 45% increase compared to the same period the previous year. Profits recorded $36 million, up 73% year-on-year. Market capitalization (market cap) stood at $714.5 million at the end of last year, a sharp growth of about 60% compared to the end of the previous year ($442.91 million).

In particular, this year, large banks such as Acleda Bank and 2 to 3 mid-sized companies are preparing for listing. Phnom Penh Commercial Bank, a Korean financial institution, is also expected to issue corporate bonds worth $20 million, which is seen as a positive factor.

Acleda Bank, which is pushing for the first listing among commercial banks, is considered the largest commercial bank in Cambodia in terms of loans ($3.61 billion) and capital ($898.56 million). Its total assets ($6.09 billion) and deposits ($4.24 billion) rank second in Cambodia. The bank's market cap is expected to exceed $1.5 billion. This is twice the combined market cap of the 5 companies currently listed on the CSX. Han Kyungtae, head of Yuanta Securities Cambodia, the lead underwriter for Acleda Bank's listing, said, "If approval from the Securities and Exchange Commission is obtained this month, listing will be possible in April."

At the first initial public offering (IPO) roadshow held on the 10th of last month, In Channy, CEO of Acleda Bank, mentioned, "Acleda Bank, which started in 1993 as an NGO with capital of $600,000, has increased its current capital, assets, and net profit by 700 times, 9,000 times, and 2,000 times respectively compared to then."

Acleda Bank's public offering is also attracting attention as the first national stock format in the Cambodian stock market, targeting general investors in addition to institutional investors, unlike existing listed companies.

Han, the head of the corporation, explained, "The national stock concept is borrowed from Korea's past national stocks such as Pohang Iron and Steel Company and Korea Electric Power Corporation. IPOs allocate shares to institutional investors through demand forecasting of public offering volumes, but national stocks reduce or eliminate allocations to institutional investors and instead first offer subscriptions and allocations to Cambodian citizens and small investors both domestic and foreign." He added, "Acleda Bank has a network throughout Cambodia. While the purpose is capital raising, there is also the intention to grow together with ordinary citizens who are shareholders," emphasizing the significance of Acleda Bank's listing.

This content was produced with the assistance of AI translation services.