Phnom Penh SEZ Gets Green Light for Listing

The Phnom Penh Special Economic Zone (SEZ) has been given the go-ahead to launch its initial public offering (IPO) this month on the Cambodian Securities Exchange (CSX), according to the company, which would make it the fourth firm to list on the bourse.

The Phnom Penh SEZ on Wednesday announced it was set to go public on April 20 and would offer 11.6 million shares on the CSX.

A security guard stands outside the Phnom Penh Special Economic Zone in late 2014. (Pring Samrang/Reuters)
A security guard stands outside the Phnom Penh Special Economic Zone in late 2014. (Pring Samrang/Reuters)

“The indicative price range for the book building is from $0.70 to 1$ per new share,” the company said in a statement. “The total market capitalization of Phnom Penh SEZ would be from approximately $40.5 to $57.88 million.”

Carie Phou, disclosure officer for Phnom Penh SEZ, touted the fact that it was the first Cambodian-owned company to be listed on the exchange and noted plans to expand to Poipet, near the Thai border.

“We have plans to expand our operations, and we have achieved good profits, which can attract both domestic and overseas investors,” she said.

However, market analysts were quick to point out that success in the manufacturing industry did not automatically equate to positive performance on the exchange.

John McGinley, a managing director at investment and advisory firm Mekong Strategic Partners, said the SEZ has had a “transformative impact” on domestic manufacturing, but that it was too early to predict if that success would carry over on the CSX.

“How this success in developing the manufacturing sector will convert into a successful listing, the market will ultimately decide,” he said.

David Van, managing director of Bower Group Asia in Cambodia, said the listing could enable Phnom Penh SEZ to “generate a better capitalized working ability for expansion” but acknowledged the unspectacular performance of some firms already listed on the exchange.

“Hence simply listing a company under IPO may not be the full answer to become attractive for institutional investors,” he said.

Svay Hay, CEO of Acleda Securities, said the Phnom Penh SEZ was a low-risk investment but that labor relations at factories inside the economic zone could have an indirect impact on the firm.

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