Key signing heralds capital markets interconnection
News Type: Marketing News
The ASEAN Capital Markets Forum (ACMF) two years ago. Cambodia is set to chair the forum next year, marking the first time the Kingdom will exercise the role.
Cambodia took another step towards advancing its standing among emerging markets with the signing of a five-year roadmap that will ensure that the Association of Southeast Asian Nations (ASEAN) financial community is more interconnected.
The ASEAN Capital Markets Forum (ACMF) saw finance ministers from the 10 member states sign the regulatory framework digitally.
The framework, which follows a previous action plan, can help drive foreign investments into the Cambodia Securities Exchange (CSX) and improve its standing in the fast-growing ASEAN bloc.
Key priorities for the ACMF Action Plan 2021-2025 are to improve transparency and disclosure, harmonise regulatory frameworks, strengthen capacity building, improve communication and awareness and strengthen cooperation within the bloc’s financial community.
The ACMF has issued $8.835 billion in bonds over the past three years to support the forum’s goal of ensuring a sustainable future.
The ASEAN Green Bonds Standards, for example, aims to tap into demand for sustainable development. Proceeds from its issuance are invested into designated green projects, including those in renewable energy, clean transportation and pollution control, among others.
Jong Weon Ha, chief operating officer for the CSX, said that the ACMF action plan will improve the standing of new asset classes, such as sustainable bonds, because of its signing.
He added that the plan would also enhance cross-border investments within the bloc and improve market awareness for Cambodia.
The ASEAN bloc has already adopted a master plan to improve overall connectivity until 2025, with one of its key objectives being to achieve “regulatory excellence” by increasing transparency and technical regulations.
Kyung Tae Han, Managing Director for Yuanta Securities (Cambodia) Plc, told Khmer Times the new framework will help provide a level of comfort for regional investors who wish to venture into the local markets.
“ACMF’s collaborative initiative towards a more interconnected, inclusive regional capital market will clearly benefit the relatively young, fledgling CSX. It will raise regional awareness of Cambodian capital markets and provide the CSX with access to a broader investing community in the region,” he said.
Han added that he was optimistic that the action plan will raise the Cambodian market’s standards to reach the regional level.
The CSX is one of the youngest and smallest stock exchanges in the world and thereby is hindered by low market capitalisation and trading volume.
Currently, neither the CSX nor any of its listed firms are tracked under the MSCI ASEAN Index, S&P Southeast Asia Index, or any other exchange traded fund (ETF) for that matter. An ETF is a type of security that tracks an index, sector, commodity or other asset, but which can be purchased or sold on a stock exchange the same as a regular stock.
The MSCI AC ASEAN Index, which includes 85 percent of the market float in five economies including Singapore, Thailand, Malaysia, Indonesia and the Philippines, reported 8.44 percent gross returns last year.
Cambodia is set to chair the 2022 ASEAN Capital Markets Forum, marking the first time the Kingdom will act as chair.
Souce from: Khmer Times