The first non-financial institution, RMA Cambodia, has officially listed its corporate bonds on the Cambodia Securities Exchange (CSX) yesterday.
RMA Cambodia (RMAC), is fully guaranteed by a trust fund for the Asian Development Bank called the Credit Guarantee and Investment Facility (CGIF), and has been successfully and fully subscribed, with 800,000 bonds subscribed by three investors. RMA’s total issue amount is 80 billion riels – $20 million. The coupon rate for RMAC is 5.5 percent per year with a maturity date of five years.
Having CGIF recognition, investors are confident because in case a listed company goes bankrupt or defaults, CGIF will pay back investors on behalf of bond issuers, said Seng Chan Thoeun, managing director at SBI Royal Securities. “If the company is bankrupt or lacks liquidity, investors should not be concerned because the CGIF will pay the investors back. This makes corporate bonds guaranteed by the CGIF attractive for investors,” he added.
Ngorn Saing, CEO of RMA (Cambodia) Plc, said that RMAC started business in Cambodia in 1992. The company is now supplying the equipment and support for the infrastructure regarding power, clean water, transportation and other solutions related to commerce and humanity.
“To fulfil the rising demand, we are expanding business portfolios to almost all fields, ranging from agriculture, infrastructure, energy, vehicles, home infrastructure, financial and construction industry problems and food supply chains,” said Saing.
“It is the new milestone as we transform the private company to a public company and list on the CSX. The issue bond will not benefit only RMA, but it will also promote and expand the security market. It will build trust to do business in Cambodia; we have the capital market to access to fund and this is the catalyst to push and develop the national economy. I have waited for this chance for many years,” he added.
Hong Sok Hour, CEO of CSX, welcomed the move. Sok Hour said that RMAC will receive more long-term sources of funds and expand its business and boost the growth of the company from the capital market. He said that the listing will expand the extension, prestige, build trust from investors and potential investors locally and internationally and also provide a tax incentive. “We hope with the listing, the company will consider issuing other equity to allow people to both join and invest in the company,” he noted.
Sok Hour added that the CSX now has 10 listed companies, five equity firms and five corporate bond firms with the total value collected from the capital market at $191 million. He said that the amount of market capitalisation was $442 million in 2018, increasing to $701 million in 2019, while the trading volume increased from $26,000 daily in 2018 to $150,000 daily in 2019.
“We hope that this market will be a potential market for investment locally and regionally, will be the market to collect funds to support the private sector and a source to increase people’s income,” he added.
Sou Socheat, director-general of the Securities and Exchange Commission of Cambodia said that the listing of RMAC will express another step forward without fear during the hard-hit consequences of COVID-19. “We are not quiet. We proceed through COVID-19. We are pleased to join the RMAC listing as an additional company to list on the CSX,” he added.
This article was first published in Khmer Times. All contents and images are copyright to their respective owners and sources.