Goldwell, Sun Hill strike MoU on derivatives
Goldwell, Sun Hill strike MoU on derivatives
Phnom penh-based international derivatives brokerage firm Goldwell Capital Co Ltd and Malaysia-based Sun Hill Assets Ltd have joined hands in promoting Cambodia’s derivatives sector to the region and the world.
The two companies on Friday entered into a Memorandum of Understanding (MoU) as the Kingdom’s derivatives market continues its years-long upward march towards its aspiration of become an economic driving force in Southeast Asia.
Derivatives are financial securities tied to underlying assets. Common assets include commodities, currencies, stocks and bonds. An investor can purchase contracts and their return is based on the market fluctuations of the asset.
Goldwell Capital chief financial adviser George Black told The Post that the partnership will introduce Cambodia to expert international investment services and investment products.
He said: “This is what Cambodia needs as the derivatives market here shifts into an era of professionalism and respectability.
“The deal will show Cambodians how to use derivatives as professional investment vehicles and will help develop the market.
“Up till now the derivatives market here was merely trader and trading. This will give people access to professional instruments that are used in other developing countries.”
Having witnessed the signing, Securities and Exchange Commission of Cambodia (SECC) director-general Sou Socheat told The Post that the MoU will further boost development of the market and woo more foreign investors to the Kingdom.
He said: “We have been working a lot on the development of the derivatives market and have seen it grow from year to year.
“That has encouraged Goldwell – a derivatives brokerage firm licensed by the SECC – to engage in the partnership and seek to expand the market.
“The partnership will build a knowledge transfer strategy to transport the know-how of derivatives markets abroad to us. It will additionally promote our market to foreign investors.”
Black added that Goldwell had been working with the SECC since last year to provide professional training free of charge to the public in the capital and all 24 provinces.
But Covid-19 forced its classes online, he said. “Through collaboration with the SECC, we will continue to provide Cambodians with high-quality online classes on the market.”
On May 11, the SECC approved an amendment which will make it easier for derivative brokers to receive licences.
The relaxation of requirements for the derivatives market aims to boost investor interest in it after it gained traction in recent years.
The amendment will make the process of applying for an SECC licence more efficient for derivative brokers.
The trading volume of derivatives in Cambodia increased from $84 million in 2018 to $200 million last year, SECC data show.
The derivatives market currently boasts five central counterparties, 27 derivative brokers, five fund management companies and five trustees.
