FAQ

Stock investment is allowed to all indiviuals and entities which can be instiutions or companies. Those who invest in stock are called investors. 

First of all, we have to choose a securities firm among all the member of the CSX. Then securites firm will help the investors to apply fo rInvestor ID from SECC (Securities and Exchange Commission of Cambodia) and open trading account for them.  When the account has been successfully opened and deposited money, investors can place trading orders on the next working day.

 Please note that investors can have only one Investor ID, but they are allowed to open an trading account at all serurities firms. 

  • 1- Buyers and Sellers send orders through their brokers
  • 2- Brokers place the orders to stock exchange (CSX)
  • 3- CSX collect all the orders and match them
  • 4- CSX returns trading results to the brokers
  • 5- Brokers then inform buyers and sellers of their trading result 

By instructing their securities firm, investors may use any of the following communication means:

  • 1. Written document;
  • 2. Voice;
  • 3. Email;
  • 4. Other electronic ways;

Investors instruct their securities firm to place orders on the CSX by stating at least the following main items:

  • 1. Issue name;
  • 2. Quantity;
  • 3. Price;
  • 4. Classification for bid or offer;
  1. No margin trading: 100% good faith deposit
  2. Daily price change limit:  10% of previous day’s closing price
  3. Trading currency: Khmer Riel (KHR)
  4. No foreign holding limit ( allowed for foreign investor) 
  5. Trading before settlement: allowed
  6. Market opens from 08:00 am and closes at 11:30 am, from Monday to Friday except public holidays
  1. Lower asks (higher bids) have a priority over higher asks (lower bids).
  2. In case of same price orders, time priority adopted.

A technique that attempts to determine a stock’s value by focusing on underlying factors that affect a company's actual business and its future prospects. 

Fundamental analysis serves to answer questions, such as: 

  • Is the company’s revenue growing? 
  • Is it actually making a profit? 
  • Is it in a strong-enough position to beat out its competitors in the future? 
  • Is it able to repay its debts? 
  • Is management trying to "cook the books"?

There are 4 main factors of fundamental analysis:

  1. Economic Analysis
  2. Industry Analysis
  3. Company Analysis 
  4. Stock Analysis/Valuation 

Technical analysis is a tool to estimate a proper security value by focusing on the historical price and trading volume.Technical analysis is often called “ Chart analysis”, by using chart, investors can predict the future price of stock and can even know when they should buy or sell stock. 

Securities market is a market where securities like stock and bond are bought and sold.

 

Securities market plays an important role in a country’s economy by allowing corporations, state-owed enterprises and government to raise funds directly from the public to finance their business expansion or infrastructure development. On the other hand, the people who have excess of funds remaining from spending, have choice to make diversified investments or even savings (with low-risk securities) in the securities market. When money flows efficiently from those who have it to those who need it, the economic activities of production and trade will accordingly prosper and jobs and wealth are created.

Stock is a type of equity securities that represents the ownership in a corporation and a claim on part of the company’s assets and earnings depending on the proportion of shares a person holds.

For example: Mr. Chan holds 1,000 shares of PWSA stock. Then the company announces a cash dividend of 250 KHR/share. Therefore, the amount of cash dividend for which Mr. Chan has the rightful claim, shall be 250,000 KHR.

Stock trading offers investors various advantages as follows:

 (a)  Investment opportunity and return

Instead of or in addition to running their own business, stock holding offers investors the opportunity to participate in a business where no specific expertise and experiences are needed or close monitoring is required. Meanwhile, the return from trading and holding a stock could be significant generating from dividend and capital gain.

(b)  Affordability for small investors

The stock market allows investors with the even small amount of money to (partially) own a big company and experience the return like other high net worth individuals and institutions based on their holding proportion.    

 

(c)  Tax incentives

  • No stamp duty levied on ownership transfer resulted from stock trading;
  • No capital gain tax;
  • No dividend tax for Cambodian residents, and 7% (of full 14%) dividend tax for non-residents

(d)  Diversified Investment and additional return

Besides your main source of revenue like salary or profit from businesses, and your other additional revenues for example in the forms of interests from fixed deposit or renting or gain from real-estate, you may invest in stock market to diversify your investment and obtain an additional return. In addition, the brokerage commission is as low as around 0.5% of your trading value.

Stock trading consists of risks that may affect the stock price to decrease or to be highly volatile.

 

We can classify those risks into three main categories as follows:

 

  • Systematic Risk or Market Risk is the uncertainty happening to the entire market which cannot be diversified away such as economic risk, inflation risk, political risk, interest rate risk, etc.
  • Unsystematic Risk is the uncertainty happening to a specific company or industry which can be reduced through diversification. Such risks can be company insolvency risk, internal accounting fraud, insider trading activity, etc.
  • Liquidity Risk refers to the risk that the buyers and sellers are unable to find one another on a timely basis to trade at the fair price, due to lack of liquidity in its given market.

Bond is a type of debt securities that represents an amount of money which an investor lends to an issuer, which may be a corporation, state-owned enterprise or government. The investor shall receive an amount of interest from the issuer periodically and the whole principal back at maturity.

Bond

Stock

Becoming a creditor Becoming an owner

Higher claim on assets

Lower claim on assets

Consisting of maturity

Unlimited holding period unless the company is liquidated

Stable and regular interest income to be paid by issuer

Dividend payment based on company policy and performance

Lower price volatility

Higher market volatility 

Typically illiquid

More liquid

Minimum trading unit = 1 unit of bond (with standard face value of 100,000KHR)

Minimum trading unit = 1 share

The record date is the cut-off date established by a listed company in order to determine which shareholders are eligible to receive a dividend.