The government signed a stock market contract with Korea Exchange Monday, paving the way for an exchange starting mid- or late 2009, officials said this week.
Korea Exchange is the fourth largest stock market in Asia.
The government plans to allow at least 10 companies—five state run and five foreign—to be listed on the initial exchange, officials said.
The news was met with mixed feelings. Some analysts warn that the rampant corruption and weak rule of law that continually plague Cambodia will sink stock exchange efforts.
But some officials were optimistic the stock market could provide more sophisticated options to investors.
“The Cambodian stock market provides an additional opportunity for a company to collect capital for investment,” said Hang Chuon Narong, general director of the Ministry of Economy and Finance. “Either [individuals, institutions and other companies] deposit money [in banks] to get interest, or they invest in the stock market.”
The impending stock market, which stems from the signing of a securities law last year, will help strengthen Cambodia’s financial system and will ensure money circulates “smoothly,” said Kang Chan Dararoath, an independent economic analyst.
Opposition leader Sam Rainsy, who was once Finance Minister, encouraged Cambodians to buy shares in stocks to increase their income, but warned extreme caution.
“Our current authorities are corrupt and conspiratorial, and if the stock market is created under these circumstances, I worry that some people can be cheated,” he said. “They could lose a lot of money and become much poorer.”