CSX Index Eight-month High as Stocks Rally on Acleda’s Earnings, New IPOs

Improved earnings by Acleda and a few counters, with new stock launches have increased trading activity, pushing up share prices from recent lows
Cambodia Securities Exchange (CSX). Kiripost/Siv Channa
Cambodia Securities Exchange (CSX). Kiripost/Siv Channa

“ABC to the moon!”, investors chorused at the start of the week as Acleda Bank Plc saw an upward correction in its stock price, rising beyond 11,000 riel, following its strongest-ever net earnings, which was reflected in its financial year ended December 31, 2022 (FY22).

The counter, which has grown six percent year-to-date, also led a stock price rally on Cambodia Securities Exchange (CSX), pushing up the index to an eight-month high, as retail investors took advantage of high performing stocks in the midst of the earnings season.

Known as “high season” among investors, Acleda senior executive vice president Mar Amara shared that many of the listed companies' share prices have jumped.

She noted that almost all listed companies have disclosed their financial statements for FY22 and investors are looking for the opportunity to invest in strong companies with dividends.

Alongside Acleda, Mainboard counters Phnom Penh Autonomous Port (PPAP) and Sihanoukville Autonomous Port (PAS) have gained 10.4 percent and 5.4 percent in their share prices year-to-date, respectively, pending the release of their financial statements.

The share price of state-owned Phnom Penh Water Supply Authority (PWSA), which witnessed a marginal increase in its FY22 net profit, grew 7.9 percent to 7,920 riel in one year, giving it a market capitalisation of 688.8 billion riel ($169.13 million).

‘Good stocks’

Meanwhile, the index, which rose above 500 points, is said to be driven by several reasons. They include the lower selling strength by Acleda staff (who possess 20.7 percent stake), continuous purchase by the bank’s 25.7 percent-shareholder Acleda Financial Trust (AFT), as well as higher dividend expectations and listed companies’ results.

CSX senior manager Taihy Try said Acleda, known by its CSX ticker ABC, is considered a very “good dividend stock” for medium- and long-term investments, despite its price-to-book value at below one and price-to-earnings ratio of around seven, which indicate low stock valuations.

“In addition, the price has fluctuated in the short-term, and it is the most traded counter, so short term traders can also benefit from this stock,” he told Kiripost.

He said PWSA, PPAP and Phnom Penh SEZ Plc are also “good stocks” for long-term investment, given the promise of economic growth and continuous increase in net income, which is viewed as a fundamental, and the support of new investors.

Dividend review

Widely considered a “blue chip” stock in the early stage market, Acleda posted a net profit of $181.8 million in FY22, up 9.08 percent year-on-year from $166.7 million, on the back of increased net interest income, fees and commissions.

It is the bank’s best fiscal performance since its initial public offering (IPO) in May 2020, prompting investors to take advantage of the stock prior to its dividend distribution mid this year, which is likely to see its highest payout of up to 50 percent of its profits.

The bank’s last total dividend payout of 237 billion riel ($58.4 million) represented 35 percent of its net profit in FY21 or 548.64 dividends per share.

Opining that the anticipation might also influence the stock price, Taihy felt that ABC’s positive momentum will persist until the dividend record date, which is usually in May.

Acleda’s Amara, who is also its chief financial officer, pointed out last December that the bank was considering increasing its dividend payout ratio for FY22 due to better earnings.

Responding to questions this week, she said the bank’s management and board of directors are currently reviewing the dividend payment.

“We believe that the dividend is very important for investors and to also support the bank’s sustainable growth. The dividend decision will be published on the CSX website immediately after the final approval of the shareholders,” she said.

New IPOs

Separately, CSX market operations director Kim Sophanita pointed out that the improved buying power at high price by new and existing investors since early January has spurred the stock market performance.

“Most of them are individual investors,” she said, adding that Mengly J Quach Education Plc’s upcoming IPO and the likelihood of a new stock launch by a telecommunications player might be whetting investors’ appetite as well.

At Wednesday’s closing, PPAP shed 0.13 percent while PAS gained 0.43 percent to settle at 15,460 riel and 14,100 riel for a full market capitalisation of 319.8 billion riel ($78.5 million) and 1.2 trillion riel ($297 million), respectively.

Acleda’s share price rose to a midday high of 11,520 riel before ending the trading day 1.57 percent lower than the previous day at 11,300 riel. About 158,556 shares changed hands for a market capitalisation of 4.9 trillion riel ($1.2 billion).

The index slipped 1.01 percent to close at 505.63 points with 173,281 shares traded for a value of 1.9 billion riel, with a total market capitalisation tally of 7.7 trillion riel ($1.9 billion).