Thailand
Cambodia: Investor ignorance, Covid concerns push local bourse near three-year low
Concerns over the continuing economic impact of Covid-19, after the emergence of the highly-transmissible Omicron variant, have helped push Cambodia’s stock index down to its lowest close in nearly three years. The drop comes in spite of comments by Prime Minister Hun Sen yesterday that economic growth will accelerate in spite of Omicron.
The Cambodia Securities Exchange (CSX) Index is down 26 percent so far this year, closing yesterday’s session at 479.14 points, the lowest since December 28, 2008.
Cambodia Securities Exchange Director Kim Sophanita put the negative sentiment down to a lack of investor knowledge.
“The lack of investor’s fundamentals in stock valuation and liquidity are the main driving forces behind the short-term negative market sentiment, I would say. In facts, most of listed stocks, for example, the blue chip stock ABC [ACLEDA Bank Plc], which has the most weighted market cap in CSX Index, showed incredible financial performance but its shares are being traded below IPO price. Valued investors would see it as a golden opportunity to buy them in this situation,” she said.
“Investors need to see stock market as a long-term investment and invest in companies base on their long-term business fundamentals rather than being swayed by short-term market sentiment. CSX is giving more focus on promoting investor education and raising stock market awareness in order to build a strong investor base to solve this issue,” Sophanita said.
Prom Visoth, President and Chief Executive Officer (CEO) at ACLEDA Securities Plc, said the drop may be due to the limited number of listed securities on the CSX, the low liquidity and returns and limited public awareness.
“The CSX will back to positive if there are some new companies in good sectors such as banks, IT companies or telecom companies listing on CSX which will bring market liquidity up and provide a choice for investors to invest in and to bring up trading volume and value and share prices in line with the economic recovery and Covid-19 overcome,” he said.
RHB Securities CEO Iv Ranarith said Covid concerns were weighing on the CSX but he also pointed to the lack of listings and liquidity on the bourse.
“The global and domestic economic downturn in the past two years certainly plays the large part of the role here,” he said. “This affects business and household incomes as well as foreign investment on which the country heavily relies. Having said that, most of the counters improved over the past three years except notably ABC, which saw its price pulled down mainly by the temporary imbalance of demand and supply of the free float shares on the market. And since ABC has a significant weightage on the composite index, this single counter actually weighs down the whole market.”
ACLEDA announced on June 15 that ASA Plc was divesting 16.16 percent of its holdings, making 17,326,521 shares, or 4 percent of outstanding ABC shares, available on the CSX this year. ABC shares are down 37 percent so far this year.
Source: https://www.khmertimeskh.com/50981426/investor-ignorance-covid-concerns-push-local-bourse-near-three-year-low/