| Author | Dalis Chhorn |
| Call Number | AIT RSPR no. SM-02-48 |
| Subject(s) | Stock exchanges--Cambodia
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| Note | A research study submitted in pa1iial fulfillment of the requirements for the degree of the Master of Business Administration in International Business, School of Management |
| Publisher | Asian Institute of Technology |
| Series Statement | Research studies project report ; no. SM-02-48 |
| Abstract | Equity market is a central place for collecting the household saving to put into the productive investment. The equity market together with the advantages of creating more wealth to the nation, it also gives the disadvantage to the country. Its boom and burst characteristics make the economy fluctuation in a short cycle and hence make the country unstable. The benefit would be greater than cost unless the country has a firm structure to support the operation of the stock market. This study has picked up three emerging markets in order to learn about their experiences. The practices in Thailand, China and Vietnam showed that these markets have undergone the inevitable failures due to the lack of legal framework, long-term investors, and honest and qualified issuers. Thus, it is very important to look into the whole structure of a country including politics, economy, potential investors, potential issuers and infrastructure, before opening up the exchange. Cambodia has a stable politics with a steady growth of economy which is a positive signal for the establishment of the stock exchange. However, from the analysis, it is found that Cambodia is unable to open the market in the 2003 or 2004 yet due to the lack of legal framework, human resources, and low level of trust in the market. All the required laws for the stock market are in draft except Accounting and Auditing law has been approved. By looking at the economic side, there are potential savings in individual households which are able to invest in the stock market. Nevertheless, the main problems are the awareness and trust from the public, which need time to recover. Cambodia has about two hundred large private companies plus forty state-owned enterprises that are potentially listed. By comparing sale revenue of large companies in Cambodia with the listing companies in Vietnam, it is also showed that Cambodia has large companies which are able to be listed. Therefore, the task of the government is to educate those companies to understand the interest of going public. Cambodia is expected to be able to open the equity market in the next five years after a more firm foundation are in place. In the initial light of the operation, the market is expected to be small with ten companies listed, market capitalization about eight million dollars and total fund raised is about five million dollars for the first year of operation. Nevertheless, the market is expected to growth gradually due to the recovery of public confidence and steady growth of the economy. To be able to open the exchange in the next five years, Cambodia needs a firm foundation in the market including sufficient and effective laws, high quality of human resources, and good governance for both government and corporation. Hence, the government should adopt and enforce all the basic laws as planned. Corporate governance is a major task that the government should take action in order to ensure the quality of the public companies. In the mean time, the government should promote the concept of the investment in the stock market to the public since most of Cambodian people are not aware of the stock market. The public should be explained about both risks and rewards of holding the stock. At last but not least, the government should prepare a detail plan for training the professionals for the regulatory body, the exchange and the media. |
| Year | 2002 |
| Corresponding Series Added Entry | Asian Institute of Technology. Research studies project report ; no. SM-02-48 |
| Type | Research Study Project Report (RSPR) |
| School | School of Management |
| Department | Other Field of Studies (No Department) |
| Academic Program/FoS | Master of Business Administration in International Business (Publication code = SM) |
| Chairperson(s) | Deussen, Arne; |
| Examination Committee(s) | Ramachandran, N.;Tang, John C.; |
| Scholarship Donor(s) | Asian Institute of Technology-Partial Scholarship; |
| Degree | Research Studies Project Report (M.B.A.) - Asian Institute of Technology, 2002 |