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Securities market grows despite the pandemic

April 27, 2020  |  Source: Khmer Times

A monitor displays trading activity at the Cambodia Securities Exchange.

The Cambodian stock market (CSX) has looked healthy during the last two months despite the global Coronavirus pandemic.

The CSX Index rebounded to 700 points after two months, according to its data.

Within the two-month period, the index has shown a significant fluctuations. It started decreasing from 704.74 points in late February until being stable for a while at around 590 points in early April.

Since mid-April, it has presented a robust growth until recovering back to 703.24 points as of Thursday last week. The increase in share prices of PWSA, GTI, and PAS contributed to a 2.51 percent increase, with levels reaching 6,000 riels, 4,000 riels and 17,540 riels respectively, according to data from the CSX.

Hong Sok Hour, CEO of the CSX, told Khmer Times that the market saw a decline from December to February because of the virus outbreak. However, the price rebounded as investors’ expectations turned optimistic, saying that the crisis will end shortly.

"The prices started to decline in December and when COVID-19 broke out, they fell even more," he said However, because investors may think that the virus crisis will not take a long time to overcome, people started buying shares, causing market prices to pick up and become stable during the last two months.

"They think that after COVID-19 is eradicated, prices will increase more and they will make a profit," Hong said.

There are now five companies listed on the equity side – Sihanoukville Autonomous port, Phnom Penh Special Economic Zone, Phnom Penh Autonomous Port, Grand Twin International Cambodia and Phnom Penh Water Supply Authority.

Hong said because the Kingdom's stock market is still too young. It needs more time to grow. He said the virus crisis will not last for long and then it would provide impetus for the market to continue its growth.

"I don't expect the crisis will last for a long time. We are young so all parties need to develop more experience about stock markets. We need support from the government and development partners. We need more time to develop the market and to raise the public's awareness of it," he said.

For almost a decade, the CSX has gradually evolved in its role as a source for local companies to find funds to grow businesses and operations.

Beside the equity-listed firms, the market has corporate bond issuers Hatta Kasekar Ltd, LOLC Cambodia and Advanced Bank of Asia Ltd and PPCBank. PRASAC, a microfinance institution, has successfully completed its corporate bond subscription process.

Hong Sok Hour from the CSX, said that the market will see more activity in the next few years.

"We do not have more products for them so they will not be interested in the market. But now, in the last two years, they have been made more aware of the market and we expect to see more growth in the future as we can now have more companies listed," he said.

However, the CSX Index on trading Friday closed at 653.95 points, a drop of 49.29 points from 703.24 on Thursday. Trading volume on Friday was 23,201 shares with a total trading value of 148,545,170 riels.

The share price of all listed firms trading on Friday, which is the last day of trading in the week, saw PPAP fall from 11,300 riels a share on Thursday to 11,100 riels, PAS fall from 17,540 to 16,000 riels a share. Another state-owned enterprise, PWAP, saw its price fall from 6,000 riels to 5,500 riels.