After celebrating Khmer New Year over the weekend, the Cambodia Securities Exchange (CSX) officially began trading today with the debut of its sole listing, the Phnom Penh Water Supply Authority (PPWSA, covered previously here).
Having been 17 times over-subscribed despite a list price at the high end of estimates, PPWSA did not disappoint and traded as high as 9400 KHR per share before settling at 9300 KHR to end the day. With a subscription price of 6300 KHR, this represented a 48% jump with almost 880,000 shares (about 6.7% of the float) changing hands on the opening day. While the current price is more a result of the lack of liquidity and investor exuberance rather than fundamental value, it is encouraging that after years of planning and multiple delays, the world’s newest market is finally operational.
Another reason for optimism is the growing interest of institutional investors. The most famous has been Mark Mobius of Franklin Templeton Investments, who mentioned the potential of Cambodia on his own blog here. But today came reports that South Korea’s biggest fund, Samsung Asset Management Co., would also look for opportunities on the CSX in the next year as the market continues to develop. With high returns and compelling growth stories, it is clear that frontier markets such as Cambodia will continue to develop and become more mainstream.