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| At the Cambodia Stock Exchange (CSX) |
We are proud holders of a Cambodian bank account and in process of getting an official Investor ID through the Cambodian Securities Exchange Commission to obtain a brokerage trading account to start trading stock in Cambodia!
Hit the brakes! What?! Okay, back up for a second. Allow us to explain...
Before you hit the snooze button, let us say that this is a very exciting time for Cambodia. It's more civilized than the wild-wild East that it used to be about 10-15 years ago. However, it is still a sleepy, raw, unrefined frontier country, starting to wake up to the 21st century.
In the shadows of the more advanced and better known country of Thailand, plus the perpetual big-brother interjections from neighboring Vietnam (although they technically left for good in 1992), Cambodia is one of the lesser known and more poorer countries in the Indochina region post-Khmer Rouge.
Prior to the Khmer Rouge, Phnom Penh was a thriving, cosmopolitan city. Cambodia was an empire steeped in ancient history and an advanced civilization of Indochina. Sadly, the world doesn't recognize them for what they were before. Quite literally, since 20 years ago, this country had to start over from ground zero.
As a result, we've noticed a general inferiority complex when Cambodians speak of themselves against the backdrop of the world, yet they are very proud of their Khmer heritage and the love of their country is evident. The Khmers are an eager people without pretense, seemingly ready to join the 21st century. It's been very natural and easy to make friends here. We've made more Cambodian friends than any other place we've traveled, combined. We love the people here.
As recognized in an Asia Times Online article by Julie Massis on June 11, 2011, Cambodia A Capital Success, all this amounts to a stirring energy on the cusp of an exciting economic future that we haven't felt in any of our travels to date.
Emerging countries are risky, but we have witnessed evidence of stability and future growth potential. First, the Prime Minister Hun Sen has been a proponent of economic development, creating and changing laws for easier investing and business start-ups. Obviously, they are taking copious notes from China, and not surprisingly, there's a lot of Chinese investments pouring in. They are improving the infrastructure and encouraging companies to go public - a very foreign concept for Cambodians. Already, over the past decade, Cambodia has seen one of the highest economic growths in Asia, second only to China. Of course, with the growth comes new challenges such as a shortage of skilled labor while educated Cambodians leave the country for better opportunities abroad, which is what they're facing right now.
There's irony in that these former communist countries support policies that promote unhindered economic freedom. However, before one gets too optimistic, economic freedom doesn't necessarily equate to freedom of speech and protection of basic human rights. These are still socially oppressed times for Cambodians. We have been told that Government is hands-off when it comes to your business, but handles anyone who gets in the way of the government or criticizes them in public with a heavy hand. Corruption is still rampant and a right to a fair trial is hard to come by. Before you judge, our wild-wild west wasn't any more civilized in the past. It takes time, among other factors...
There's irony in that these former communist countries support policies that promote unhindered economic freedom. However, before one gets too optimistic, economic freedom doesn't necessarily equate to freedom of speech and protection of basic human rights. These are still socially oppressed times for Cambodians. We have been told that Government is hands-off when it comes to your business, but handles anyone who gets in the way of the government or criticizes them in public with a heavy hand. Corruption is still rampant and a right to a fair trial is hard to come by. Before you judge, our wild-wild west wasn't any more civilized in the past. It takes time, among other factors...
Despite the challenges, all of this potential makes us want to invest in Cambodia. The reward for taking the risk is the ability to experience the first major (or maybe second) wave of transformation. But it's more than that. We feel that we can make a difference by investing in their economy and education, thereby helping improve their standard of living, which creates a middle class and reduces the disparity. Doing so is crucial to tackling the hard-to-ignore social problems typical of third world countries. Who doesn't wish for that?
Whether this is achieved by investing through their newly formed Cambodian Stock Exchange (CSX), and more directly through expatriation (quite seriously), we haven't decided yet. Yup. We would move here in a heart beat to take advantage of the opportunities. Dare we say, even more so than Chiang Mai, Thailand.
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| Canadia Tower - currently the tallest building in Phnom Penh but soon to be outdone by a neighboring building being built by a Chinese company. Home to CSX on the top 25th floor. Note the slick digital board displaying stock information. This is very advanced for Cambodia. |
Cambodia Stock Exchange (CSX)
We first heard about CSX during our research of Cambodia while we were still chillin' on the beaches of Thailand. We didn't know much about the infrastructure or economic conditions in Cambodia. Heck, like most gringos, we knew nothing about the country! We came across an article describing how the CSX just opened a few months ago in April of 2012. It peaked our interest, to say the least. We wanted to visit CSX while we were in Phnom Penh (what nerds we are...), and the rest is history.
We first heard about CSX during our research of Cambodia while we were still chillin' on the beaches of Thailand. We didn't know much about the infrastructure or economic conditions in Cambodia. Heck, like most gringos, we knew nothing about the country! We came across an article describing how the CSX just opened a few months ago in April of 2012. It peaked our interest, to say the least. We wanted to visit CSX while we were in Phnom Penh (what nerds we are...), and the rest is history.
Imagine reducing Wall Street to a very quiet, air-conditioned room on the 25th floor of the tallest building, Canadia Tower, in Phnom Penh. Actually, imagine an office more like a quiet dentist's office with a receptionist and a few staff and you get the picture of CSX. It's far from being Wall Street. There is a nice Cambodian bull sculpture in the lobby, but don't bother looking for the trading bell.
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| Cambodian bull! |
They currently trade one (yes...one) public stock, the Phnom Penh Water Supply Authority (PWSA). That's it. But other companies such as Cambodia Telecom, Port Authority, and the first shopping mall, Sorya Shopping Center (read about Cambodia's first experience with escalators at the mall), are planning to go public in the near future. For now, the trading room is just a room full of computers with empty seats. Still, our tour of CSX revealed to us that they are anticipating major growth.
After the tour and our research into the Cambodian market, this is where we became very interested in the ability to trade stock on the CSX. Heck, at a current share price of 6,200 Riel ($1.55) and a brokerage fee of $2.50/transaction, it's cheap thrills.
After investing about 4 hours over 2 days, we walked out with (almost) everything we needed to start trading. We are currently waiting on a Investor ID from the Cambodian SEC.
For our guide on how to open a Cambodian bank account, apply for an Investor ID, and start a securities account, click here.
We also found this document to be a good source of information on what it takes to start a business in Cambodia. For further reading on the business climate of Cambodia: Doing Business in Cambodia - 2012 Practical Advice for Investors by Grant Thornton Cambodia, a local consulting firm within Grant Thornton International, Inc.
