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Three State-Owned Companies Prep for Exchange

Telecom Cambodia, the Phnom Penh Water Supply Authority and the Sihanoukville Autonomous Port are expected to be the first three enterprises to list on Cambodia’s upcoming stock exchange, planned for December.

Officials from the three state-owned companies have prepared various plans to collect capital from a public offering in order to expand their business activities. Each enterprise has a special team responsible for stock trading and strengthening internal operations.

Ney Kosal, director of the accounting and finance department of Telecom Cambodia, said his enterprise has had a balanced financial statement for many years already. The company is awaiting evaluation by the Securities and Exchange Commission.

“Everything has been prepared,” he said. “But I’m not sure yet if it is acceptable. We need to wait until there is an evaluation to see whether an independent auditor is still needed.”

Ros Kim Leang, director of the accounting and finance department of the Phnom Penh Water Supply Authority, said his company had adopted international accounting standards since 1997. The authority is now considering establishing an internal auditor, as requested by the Securities Commission.

The company, which earned $6 million in 2008, will be ready for the exchange on time, he said.

“I believe that we will be able [to be listed], as we already have strong fundamentals,” he said. “We have nothing that is unbalanced, as everything has been audited.”

The Sihanoukville Autonomous Port, which has been operating since 1979, has never had an independent audit, according to a port official who spoke on condition of anonymity. Internally, it has no plans to improve its work, the official said, but the company was optimistic about its prospects for an exchange listing.

The port earns around $25 million a year, with some 700 ships docking there, the official said.

Each of the enterprises was guided in its exchange bid by Tong Yang Security, a Korean firm, which has strengthened internal operations, especially in financial systems. The Securities Commission and Ministry of Economy are both helping the companies be listed on time.

Minh Ban Kosal, director-general of the Securities Commission, said he could not yet give an evaluation of the companies, according to regulations. Whether the companies will be listed on time depended on directives that will be issued in November, he said.

Preparation for the exchange listing can take up to 18 months, and the three state-owned companies may not be ready on time, said Mei Vann, director of the Economy Ministry’s financial industry department.

When the exchange opens at the end of the year, stock trading will not be immediately available, said Han Kyong Tae, chief representative of Tong Yang Security.

Cambodia hopes to attract 400 national and international companies for its stock exchange, part of a nascent securities market that helps businesses raise capital by becoming publicly owned and traded.

Most companies, including banking institutions, have adopted a wait-and-see approach to the stock exchange.

Still, In Pyo Lee, director of the Global Business Development Project of the Korean Exchange, said an estimated 20 companies were likely to join Cambodia’s exchange over the next two or three years.