Here in Cambodia, if not the rest of the world, the opening of the Cambodia stock exchange has been a long anticipated event, marking Cambodia's emergence as a modern country. When it opened in July 2011, the only hitch was that there was not a single company listed on the exchange. That's all about to change, though, as three state controlled entities plan on listing soon.
First up will be the Phnom Penh Water Authority. This one is sure to sell like proverbial hotcakes, with demand at an estimated 10x what's on offer. Next in line are the Sihanoukville Autonomous Port and Telecom Cambodia. It's going to be very interesting to see what happens here in Sihanoukville after an infusion of cash into the port. The port is already undergoing expansion and a new Special Economic Zone is in the process of being built virtually at the water's edge.
If you're sceptical about all this, you might want to read the Bloomberg article I got the information from. In the article, Cambodia Embracing Capitalism With First IPO Since Pol Pot, author Joyce Koh quotes Mark Mobius, Chairman of Templeton Emerging Markets Group:
"The potential for investors in Cambodia is excellent.The listing of publicly traded stocks will drive up interest and demand. If a country can list its state-owned enterprises and list enough stocks so that foreign investors can get involved, then it can be very, very good."
Cambodians are certainly keen to get involved. Potential investors, both small and large, have been attending seminars and putting aside savings to get in on the ground floor. One person interviewed by Koh said he planned on investing as much as a third of his $300 monthly pay in Cambodian stocks.
Cambodia still suffers from an image problem, but when serious and sophisticated investors and investment groups start getting involved, it's probably time the rest of us caught up with the times. How many other countries are experiencing a 6.5% GDP growth without having the advantage of an active stock exchange? What's going to happen here once the ball gets rolling?
Note: This article also appears on the author's blog, Sihanoukville Journal, a chronicle of the life and observations of an Australian expat in Cambodia.