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Cambodia: PPSEZ working toward status as first foreign listing on Thai bourse
The Phnom Penh Special Economic Zone Plc (PPSEZ) is working towards a cross-listing in Thailand.
If approved, PPSEZ would become the first Cambodian firm to be cross-listed abroad. It would also mark the first time Thai regulators would allow a foreign firm to be traded on the Stock Exchange of Thailand (SET).
“We heard about this news a long time ago, but it seems to be quiet and we have not been given additional updates,” the Cambodia Securities Exchange (CSX) said.
Documents have not yet been formally submitted to Thai regulators and are currently with “advisers”, according to a source deeply involved with the cross-listing.
“We have nothing to disclose because of the pandemic. We don’t know when we can travel to Thailand,” said PPSEZ Chief Executive Officer Hiroshi Uematsu.
PPSEZ is the developer and operator of the Phnom Penh Special Economic Zone (SEZ) and the Poipet SEZ.
Last month, it completed the acquisition of Sahas E&C Co Ltd, which insiders said was crucial to the buyback.
Citing Khmer Times reporting from July, Uematsu confirmed that the buyback scheme will be contingent on the state of the pandemic and may be executed as early as next month.
A cross-listing in Thailand, however, would probably see the company dilute its ownership in the company rather than increase it.
An expert said that PPSEZ would likely issue new shares and deposit them in the CSX’s Direct Registration System which would allow their trading on the Thai market.
A cross-listing requires PPSEZ to prepare financial statements; a listing application; allocate two to three weeks detailing post-listing and corporate actions and submit an application to Thailand’s Securities and Exchange Commission (SEC), which will either approve or deny the application within 45 days.
The securities will be offered within six months of Thai SEC approval.
Advisers are believed to be conducting independent due diligence in Bangkok before submitting their financial statements and listing application to the Thai SEC, according to an individual familiar with the matter.
Surin Manveevitjit, deputy head of the Thailand Stock Exchange, told Khmer Times that “PPSEZ is still in the process of listing on the SET and has already appointed a Thai financial adviser”.
“It will be the first foreign firm to use the SET foreign equity listing rules. Both markets will have more diverse products for their local investors. The company can raise more funds by accessing other markets directly. It will create more visibility for the company by increasing the number of investors in that firm,” said Manveevitjit.
He said that he has travelled to Thailand on previous occasions to press the listing forward.
In 2019, Cambodian and Thai regulators agreed to a memorandum of understanding that would allow for cross-listings, dual listings and depositary receipt offerings.
A depositary receipt is a negotiable certificate representing shares in a foreign company traded on a local stock exchange.
Depositary receipts allow investors to hold equity shares of foreign companies without the need to trade directly on a foreign market. They are more convenient and less expensive than purchasing stocks directly in foreign markets.
“We hope Cambodia will be the first country [where] companies will offer securities sales to Thai investors, listing on the Stock Exchange of Thailand,” Ruenvadee Suwanmongkol, secretary-general for the Thai SEC, was quoted in the Bangkok Post as saying.
By average trading volume, the SET is the most liquid market in ASEAN. Approximately 60 percent of traders on the bourse are retail investors according to official figures.
A secondary listing there could potentially increase PPSEZ’s market capitalisation and positively increase liquidity in the CSX.
Prominent businessmen expressed enthusiasm over the possibility of a CSX-listed company being traded abroad but also expressed disillusionment – “puzzling” one man said when discussing an arbitration dispute.
“It is not clear to me why a cross-listing of a firm like PPSEZ into Thailand would make sense for the issuer or investor,” Stephen Higgins, managing director of Mekong Strategic Partners said.
Source: https://www.khmertimeskh.com/50919681/ppsez-working-toward-status-as-first-foreign-listing-on-thai-bourse/