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Korean Securities Firm Ready for Bourse

Tong Yang Securities is the only company that has so far opened for business in anticipation of a stock exchange that officials hope to have up and running by the end of the year.

“We came to Cambodia with a long-term perspective,” the company’s chief representative, Han Kyung Tae, told VOA Khmer. “We are ready to start our business.”

Tong Yang, a financial service provider in South Korea that set up here in 2006, hopes to offer security brokerage, stock deposits, subscription and sale of securities, merger and acquisition brokerage, bond issuance and discretionary investments.

“We are right now working with a couple of state-owned companies and a couple of private companies who might be listed on the stock exchange,” Han said.

Cambodia has said it will have its exchange up and running in December 2009, despite the global downturn and with the aid of South Korea.

Han said his company had been waiting for an official license to extend its business roles, such as broker and dealer, and to establish a private equity fund.

In South Korea, Tong Yang charges from 3 percent to 5 percent of the capital it earns trading bonds or shares. Han said he was not sure what commission the company will take in Cambodia.

Stock trading partly depends on security firms or investment banks. It also requires economic stability, a system of laws and strong companies listed on the exchange.

Vietnam’s stock exchange was established with only a few companies, Han said. But a decade later, more than 400 companies were listed. After 20 years, China’s stock market lists 4,000 companies.

In Cambodia, meanwhile, securities experts have estimated around 40 companies will be listed, while their earning potential remains to be seen.

“It depends on competition, the size of business,” Han said. “If competition becomes tougher in the investment banking business in Cambodia, which has a small size of economy, we will face difficulties in pursuing profit.”

Han also warned that if smaller securities firms are approved, the bigger ones will not enter Cambodia’s market.

Sam Ganty, a member of the government’s Securities and Exchange Commission, has said that bigger investment banks have more influence than smaller ones.

They might be stronger, have more experts, and a network of potential investors, he recently told VOA Khmer.

SEC President Minh Ban Kosal said that so far 10 securities firms are waiting to apply for business licenses.

The commission will carefully select the firms with minimum capital fit to its national economy, he said, adding that firms will be able to apply for licenses starting in August.