Thursday, December 3, 2009

Cambodia says new bourse will start trading soon

By Ek Madra

PHNOM PENH, Dec 2 (Reuters) - Cambodia's long-awaited stock exchange could start operating next month, a government official said on Wednesday, after signing a deal with South Korean developer World City Co Ltd to build the $6 million bourse.

Although construction of the new stock market will not be completed for at least eight months, trading will begin in a temporary venue as soon as possible, said Mey Vann, director of the government's finance industry department.

"It has been too long already. We don't have to wait until the construction is complete," Vann told Reuters. "We will begin our operation in January or February next year."

The idea of a Cambodian stock market has been floated since the 1990s but has struggled for traction in a country better known for a culture of political impunity, chronic poverty and a history of violence, including the Khmer Rouge "Killing Fields".

(For a feature on the stock market click: [ID:nBKK492057])

There have also been concerns that Cambodia is trying to move too fast and is not yet ready to have its people to invest in stocks, with big risks to largely inexperienced local investors in a country still blighted by corruption and mismanagement.

The four-storey venue will be built on 6,000 square metres (64,580 sq ft) of former marshland on the northern outskirts of the capital, Phnom Penh, and the design will reflect both Khmer and South Korean cultures.

Vann said the stock exchange would be housed temporarily in the Ministry of Economy and Finance until construction of the bourse was completed.

The exchange expects to start small with just four or five companies issuing about $10 million worth of shares each, according to Korea Exchange, Asia's fourth-largest bourse operator, which will own 49 percent of the new exchange.

Cambodia's Finance Ministry has given priority to state companies to sell stocks and has asked Telecom Cambodia, port operator Sihanoukville Autonomous Port and the Phnom Penh Water Supply Authority to list shares.

No comments: