Bourse eases requirements and offers tax incentives to join Board
Bourse eases requirements and offers tax incentives to join Board
In a bid to attract listings, the Cambodia Securities Exchange (CSX) has reduced requirements to enter the Growth Board.CSX’s Growth Board was launched in 2015 to help small- and medium-sized enterprises (SMEs) raise funds. It has so far failed to attract any listings.
With the latest revision, companies can join the board as long as they have at least one year of audited financial statements showing a positive net profit or positive operating cash flow with a gross profit margin of at least 10 per cent.
CSX vice-chairman and chief operations officer Ha Jong-weon said he expects the board to have its first listing soon.
“We expect a few companies to list this year. They are now working with the initial public offering [IPO] team,” he said.
“This board was created to encourage more companies to list publicly, especially SMEs and startups with good business models and growth potential,” he said, adding that the idea is that companies on the Growth Board will eventually join the Main Board.
A sub-decree issued last year gave substantial tax breaks to companies listed on the bourse. According to the regulation, companies that list in the next three years will enjoy a 50 per cent reduction on income tax and the cancellation of any tax debt.
According to the Ministry of Industry and Handicraft, there are about 520,000 SMEs in Cambodia. About 150,000 are registered as manufacturing entities.
In 2019, market capitalisation at CSX increased by 157 per cent to $800.39 million. There are five companies listed on the Main Board and three companies that have issued corporate bonds.
By the end of last year, the number of investors had reached 22,338. The average trading volume at the bourse is 1.7 million shares per month, amounting to $4.2 million.
