Jul 14th 2011
HONG KONG
The Economist
IF STOCKMARKETS are like casinos, as John Maynard Keynes argued, then the new exchange that opened this week in Cambodia has dealers but no cards, croupiers but no roulette wheels. The Cambodia Stock Exchange has no stocks to exchange, making it arguably the smallest bourse in the world (see table).
It opens six months after an exchange in neighbouring Laos. Both were set up with the help of Korea Exchange (KRX), which runs the third-largest bourse in Asia. It is animated by a vision of creating “one board” on which investors can trade securities listed on exchanges all over the world. The firm is now helping to modernise the Uzbekistan exchange and has even approached Myanmar.
The Cambodians hope three state-owned companies will list by the end of the year. If so, the exchange will vault over its Lao rival, which has only two stocks. (That has not stopped it compiling its own market index, the LSX Composite.) Even then, the Lao Securities Exchange would be bigger, measured by market capitalisation, than Mozambique’s exchange, the Bolsa de Valores Moçambique, set up in 1999 with the help of the Lisbon Stock Exchange and the World Bank. The BVM’s premises boast “lovely glasswork and a posh reception desk”, says Bruce Hearn of the University of Leicester. But they open only three mornings a week. Bids can be placed over the internet but it can take three months or more to find a seller.
Even Pat Shin of KRX believes some economies are too small to warrant an exchange of their own. In his view the thresholds are a population of 5m (Laos has over 6m) and an income per person of $300-500 (Cambodia’s exceeds $800). South Korea, he points out, opened its first exchange in 1956, only three years after the Korean war. It took ten years for the exchange to contribute much to development, he says.
It is not unknown for a stock exchange to open without any stocks. The Douala Stock Exchange in Cameroon had to wait three years for a debut offering, and no company could initially meet the Bulgaria Stock Exchange’s requirements. At least the Cambodia Stock Exchange has impressive premises in the country’s tallest building. Some mighty exchanges had much humbler beginnings. One even began under a Buttonwood tree.
HONG KONG
The Economist
IF STOCKMARKETS are like casinos, as John Maynard Keynes argued, then the new exchange that opened this week in Cambodia has dealers but no cards, croupiers but no roulette wheels. The Cambodia Stock Exchange has no stocks to exchange, making it arguably the smallest bourse in the world (see table).
It opens six months after an exchange in neighbouring Laos. Both were set up with the help of Korea Exchange (KRX), which runs the third-largest bourse in Asia. It is animated by a vision of creating “one board” on which investors can trade securities listed on exchanges all over the world. The firm is now helping to modernise the Uzbekistan exchange and has even approached Myanmar.
The Cambodians hope three state-owned companies will list by the end of the year. If so, the exchange will vault over its Lao rival, which has only two stocks. (That has not stopped it compiling its own market index, the LSX Composite.) Even then, the Lao Securities Exchange would be bigger, measured by market capitalisation, than Mozambique’s exchange, the Bolsa de Valores Moçambique, set up in 1999 with the help of the Lisbon Stock Exchange and the World Bank. The BVM’s premises boast “lovely glasswork and a posh reception desk”, says Bruce Hearn of the University of Leicester. But they open only three mornings a week. Bids can be placed over the internet but it can take three months or more to find a seller.
Even Pat Shin of KRX believes some economies are too small to warrant an exchange of their own. In his view the thresholds are a population of 5m (Laos has over 6m) and an income per person of $300-500 (Cambodia’s exceeds $800). South Korea, he points out, opened its first exchange in 1956, only three years after the Korean war. It took ten years for the exchange to contribute much to development, he says.
It is not unknown for a stock exchange to open without any stocks. The Douala Stock Exchange in Cameroon had to wait three years for a debut offering, and no company could initially meet the Bulgaria Stock Exchange’s requirements. At least the Cambodia Stock Exchange has impressive premises in the country’s tallest building. Some mighty exchanges had much humbler beginnings. One even began under a Buttonwood tree.
1 comment:
I like the article. It points out the shortfall yet optimistic views of our new stock exhchange. Sooner or later, when Phnom Penh become the "Pearl of Asia" again, people will mesmarize the beautiful city and people. We are seeing some progress already as the world financial crisis begin to recover, our country are growing at a steady pace of 6% or better so far and the prognosis is upward rather than decreasing. Cambodia is an emerging market which means that it is volitile and risky, but the reward can be very high depending on your hedging tolerance. In any case, it is still better than some rogue states like Lao, Myanmar, and newly East Timor Leste. Politically, we are arguably more stable than these countries relatively speaking.
As a Khmer blogger, I am very optimistic about the outlook. We will see our country prosper and trending.
Best Regards,
The Great Khmer Empire
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