Cambodia is moving closer to establishing a corporate bond market that would give local companies a new debt instrument to raise capital to fund operations and expansion. Financial Minister Aun Pornmoniroth said the securities regulator was working on legislation to introduce corporate bonds in the Kingdom. Lamun Soleil, director of market operations at the Cambodia Securities Exchange (CSX), confirmed that a public consultation on a draft of the legislation was held earlier this year covering regulatory issues such as bond issuance, credit rating agencies, and bond representatives. He said the Securities and Exchange Commission of Cambodia (SECC) was reviewing feedback from the consultation and that approval by its board of directors on the final wording of a prakas (directive) was “likely to happen soon.” According to Soleil, Cambodia’s first corporate bonds will likely be denominated in riel and listed on the local stock exchange, which already has the infrastructure in place to list and trade bonds. Han Kyung Tae, managing director of Yuanta Securities (Cambodia), warned that the liquidity issues that have hampered the performance of stocks on the CSX could also affect bonds issued on the exchange, as it could be viewed as a long-term illiquid asset. However, he said international initiatives such as the Credit Guarantee and Investment Facility (CGIF) could help give local bonds more visibility on the international radar. (Source: Phnom Penh Post)