Cambodian Bourse Planned for 2009

Financial Times, January 22 2008

South Korea's stock exchange and the Cambodian government have agreed to set up a stock exchange in Phnom Penh in 2009, the latest signal of the optimism sweeping the fast growing but deeply impoverished country.

Cambodia’s economy is booming, having grown an average of 9 per cent a year for the past decade, propelled by surging foreign tourist arrivals, garment exports, construction and improvements in agriculture, and Phnom Penh is today keen for all the trappings of a modern economy.

Most of the capital financing Cambodia’s rapid growth has come from external sources, including foreign aid and growing foreign direct investment. A senior World Bank official in Phnom Penh said Cambodia would increasingly need to rely on domestic savings. Local bank lending is surging. Credit to the private sector rose 60 per cent in 2007.

In spite of the rapid expansion, it is far from clear that Cambodia’s private sector, dominated by closely held family businesses, is ready to take the leap to go public. “The key issue will be to raise corporate governance standards,” the World Bank official said.