CSX Sets Ambitious Targets for 2023 as GDP Picks Up

The stock exchange expects 14 new security listings, daily trading value of $1 million this year and increased trading accounts after witnessing seven new listings in 2022 and the recovery of the CSX index from the pandemic years
The "My First Stock" exhibition by CSX at Aeon Mall Phnom Penh, October 21, 2022. Kiripost/Siv Channa
The "My First Stock" exhibition by CSX at Aeon Mall Phnom Penh, October 21, 2022. Kiripost/Siv Channa

A mix of equity and bond listings are expected to double Cambodia Securities Exchange (CSX)’s total new securities to 14 in 2023, the CSX said on Wednesday.

Along with daily trading value anticipated at $1 million and tripling the number of newly registered trading accounts in a year, these goals are part of CSX’s “ambitiously set” targets for 2023.

In 2022, CSX witnessed seven new securities comprising stock listing of property developer JS Land Plc on the Growth Board, and the listing of three corporate bonds (Royal Railway Plc) and three tranches of government bonds.

Having closed in the red for two years straight, the index gained two percent year-on-year to end 2022 at 483.71 points, with market capitalization of 7.5 trillion riel (approximately $1.8 billion), which was marginally higher than 7.2 trillion riel last year.

Total capital raised in 2022 rose 133 percent to 222 billion riel (approximately $54 million) capital from 2021, said CSX said in a press release, adding that bond proceeds constituted a large portion of the capital.

Of that, corporate bonds made up 63 percent while 32 percent of the proceeds was raised by government bonds.

Although average trading volume dipped last year, average trading value doubled in value, reaching over two billion riel per day, which was “another record-high”, doubling trading value for two consecutive years.

In a statement highlighting CSX’s achievements, plans and outlook, the bourse said while global growth is estimated at 1.8 percent in 2023, Cambodia's economic growth is projected at 5.2 percent.

Recent trends show that domestic credit growth remained strong and the exchange rate was stable while domestic revenue growth has recovered.

CSX said in the securities market, there is a strong wave of interest from conglomerates, new generation entrepreneurs and local investors both individuals and institutions.

In addition, digitalisation is enabling easier access to and more inclusive capital markets while the government bond market has been emerging, she noted in a statement on CSX achievements, plans and outlook for the year.

“Tax incentives for securities market participants remain intact and new initiatives on promoting liquidity and new product development have been well laid out,” the press release said.

The stock market sell-off has left some stocks with strong earnings potential trading at very low valuations, hence the new targets for this year.

“CSX believes that the capital market growth will speed up significantly, and that the targets we have set for ourselves is feasible in the coming year if the market gets committed support from all the market participants and relevant governmental and private parties,” the press release said.

Going forward, the CSX’s strategic plans for 2023 are focused on four main pillars - liquidity, products, market integrity and digitalisation.

To promote liquidity, the investor base would be expanded by improving necessary infrastructure and fulfilling preconditions for local and foreign investor entry, improving product scale, quality and diversification, and strengthening investor communities.

Promotion of investments in financial assets via the introduction of savings for long-term investment concept by targeting the young, the high net-worth individuals and local institutions.

New operational facilities such as foreign currency settlement, margin trading or cash borrowing for trading, and deal settlement among bond traders would be included.

It also plans to continue promoting product diversification and risk appetite for investors, by encouraging environmental, social and governance (ESG) bonds, Real Estate Investment Trust (REIT), cross-border products, and other collective investment scheme products.