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Cambodia’s Nascent Securities Market Fueled by Taiwan Capital and Pioneered by Phnom Penh Securities

[2011/3/20] [Economic Daily News, by Chou Shu Wen]-TAIPEI — It wasn’t that long ago that Taiwan businessmen of small and mid-sized companies traveled around the globe seeking manufacturing opportunities and the tradition continues. More recently, a new generation of Taiwan businessman is traveling the world-over in search of opportunities, but these men are not looking to produce goods, now the target is finance. One such opportunity has Taiwan capital powered the opening of Cambodia’s first stock exchange in July this year. Taiwan’s securities industry is looking for these new investment opportunities throughout the Association of Southeast Asian Nations. As you will see, Cambodia’s economic center of Phnom Penh shows tremendous promise.

Foreign investors quickly discover that Cambodia is an ideal starting point and is truly the friendliest nation for foreign investors in Southeast Asia. Friendly in part because there are no foreign exchange controls and US dollar market trades are accepted. Additionally, your Taiwan passport opens bank and securities accounts and investors may freely wire funds to and from Cambodia for easy stock transactions. China Airlines and EVA Air’s daily direct flights make visits quick and easy. You will instantly feel at home with the privilege of a landing visa upon arrival. Taiwan First Bank’s three Phnom Penh branches are conveniently located. This certainly creates a nice environment for investments and investors.

Chairman of Phnom Penh Securities, Mr. Lin Dong Yi, asks investors to remember that newly opened stock markets are sometimes difficult to predict and understanding market characteristics is difficult. This same situation happened in Laos earlier this year when their first exchange opened on January 11. With no competition the Laos market grew each of the following 15 days and hit the regulated daily growth limit before ultimately settling down weeks later at 86.4 percent growth. This environment is not well-suited to those using short-term stock trades in search of profit; however, significant profit from large international IPOs can be expected.

Phnom Penh Securities provides comprehensive services helping local companies get listed and government regulation allows 80 percent of IPO shares to be made available to foreign investors while 20 percent are reserved for Cambodians. This is similar to Hong Kong’s IPO regulations and means many IPO shares are available to Taiwan investors.

Mr. Lin Dong Yi explained that Phnom Penh Securities is completely funded by Taiwanese investment dollars and their major shareholders are all Taiwanese. With this in mind, Chinese speaking agents are available at each business counter. Moreover, Phnom Penh Securities’ stock trading will use computerized trading systems developed by Taiwan's SYSCOM Computer Engineering Company. The SYSCOM developed system supports Internet-based orders so Taiwanese investors can expect a similar experience as when they are making domestic stock trades in Taiwan.

With the Cambodian stock market opening soon, do not miss the IPO honeymoon that is sure to follow.