Section 1: New Trader

 

1. What is the securities market?
2. Who is Cambodia Securities Exchange (CSX)?
3. What is a stock?
4. What are the benefits of trading in stock?
5. What are the risks involved in stock trading?
6. What is a bond?


7. What is the difference between investing in stock and in bond?
8. When should I start trading?
9. Do I have to meet any qualification to trade?
10. What is the minimum capital needed to start trading?
11. How do I start Trading?
12. Why do I need a broker for my trading?
13. Which securities firm should I choose to be my broker?
14. Why do I need to pay commission fee? How is it charged?
15. Where are my securities stored? Is it really safe?
16. Am I protected by law when investing in stock?
17. I heard that stock trading is similar to gambling. Is it true?
18. What are the trading hours at CSX?

 

Section 2: Stock Market


1. How can I buy shares at IPO?

2. What is the difference between trading of stocks listed on the Main Board and on the Growth Board?

3. What is the difference between limit order and market order?

4. Can I place my order at any price?

5. What if my order wrongly placed by the broker, has gone executed?

6. What happen to my unexecuted order?

7. When is a trade settled in CSX?

8. How do I get my dividend?

9. If I found my trade partner, can I do it without placing order to CSX?

10. What is Liquidity Provider?

 

 

Section 3: Bond Market

 

1. Is a different trading account required to buy/sell bond?

2. What are the order types applicable for bond market?

3. Is daily price limit applicable for bond trading?

4. Do the bond prices include accrued interest?

5. Is the Negotiated Trading Method (NTM) for bond and stock the same?

6. Is the Auction Trading Method (ATM) for bond and stock also identical?

 

 

Section 4: Listed Companies’ Information and Market Data

 

1. What are the market data and listed company’s information useful for investors’ investment decision?

2. How to access the market data?

3. How to obtain the listed companies’ information?

4. What is the index of CSX? Does the Growth Board have an index?

 

 FOR DATA VENDORS

 

1. Where do I find historical market data?

2. I am interested in real-time market data. Are there any market data services available?

3. The market data services I am looking for is not offered in the market data services section. What do I do?

4. Are you open for the opportunity for market data exchange or agreement?

 

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Section 1: New Trader

 

1.  What is the securities market?

 

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

 

Securities market is a market where securities like stock and bond are bought and sold by investors including domestics and foreigners. 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.

 

 2.  Who is Cambodia Securities Exchange (CSX)?

 

Cambodia Securities Exchange (CSX) is the sole operator of stock market in Cambodia. Founded in 2010, CSX has been granted approval to function as market operator, clearing and settlement facility operator and depository operator. CSX is a joint venture between the Royal of Government of Cambodia (55%) and the Korea Exchange (45%).

 

 

3.  What is a stock?

 

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.

 

 

4. What are the benefits of trading in stock?

 

Stock trading offers investors various advantages as follows:

 

(1)  Investment opportunity and return:

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

 

(2)  Affordability for small investors:

The stock market allows investors with 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.    

 

(3)  Diversification:

Besides your main source of income such as salary or profit from businesses, and your other additional income, for example, interests from fixed deposit rent or real-estate investment, you may invest in stock market to diversify your investment.

(4)  Daily Trading:

Stock Investment is distinct from other investment on real assets as the Stock market allows investors to easily enter or exit their holding position daily in the stock exchange. This means investors are able to convert their investment into cash easily in the stock exchange through the daily trading. In contrast, direct investment into businesses or real-estate does not provide this privilege.

 

5.  What are the risks involved in stock trading?

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 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

 

6.  What is a bond?

 

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. In return, bondholders shall receive an amount of interest from the issuer periodically and the whole principal back at maturity.  

 

7.  What is the difference between investing in stock and in bond?

 

 

Bond

<Stocks

  • Investor Status
  • Become the lender
  • Becoming an owner
  • Return
  • fixed and regular interest income
  • Dividend payment decided by the company and capital gain
  • Risk Level
  • Relatively low as the return is not associated with how the company performs
  • Generally higher as the return is based on the company policy and performance
  • Trading
  • Tradable at securities exchange
  • Tradable at securities exchange
  • Price Volatility
  • Low
  • Generally Higher  
  • Holding Period
  • Up to maturity
  • Unlimited unless the company is liquidated
  • Additional Benefit
  • Priority in terms of repayment and liquidation
  • Voting Right in the company
  • Applicable Tax (Residents)
  • 50% reduction of withholding tax on interest from 6% to 3%, valid until 03 January 2022
  • No withhold tax on dividend
  • The suspension of capital gain tax until the end of 2021.

8.  When should I start trading?

 

Investors with the age of 15 and older, having a National ID card (for Cambodian) or Passport (for foreigner), can open a trading account. You may start investing when you think you have sufficient financial resource, knowledge and skills to trade and bear the potential risks.  

 

9.  Do I have to meet any qualification to trade?

 

You are not required to get through any qualification assessment process to trade securities listed on CSX. However, you should at least have some basic knowledge in financial investment and securities trading as well as understanding of possible risks to ensure proper investment decision making.  

 

10.  What is the minimum capital needed to start trading?

 

There is no minimum investing capital, meaning that you can trade as few as one share. You just need the amount of money that covers the price of the stock you are buying and the commission fee charged by your broker. The minimum unit of order for stock and bond are 01 share or 01 unit of bond.  

 

11.  How do I start Trading?

 

To start trading, you need to open a trading account with one of the securities firms who are member of CSX. Please click here to find a full list of our member securities firm.  

 

12.  Why do I need a broker for my trading?

 

Only licensed securities firms, who are the CSX’s members are allowed to have system connection with the CSX. Therefore, every investors need to open a trading account with a CSX’s member and have their orders placed through that member. By having a broker by your side, you may also seek their investment advice and other personal services.  

 

However, when you can place orders by yourself via the Mobile Trading System (MTS) to CSX’s trading system, your orders will of course pass through the broker system before reaching the CSX’s system. 

 

13.  Which securities firm should I choose to be my broker?

 

Currently, there are 11 securities firms who are licensed by Securities and Exchange Commission of Cambodia (SECC) and registered as the CSX’s members to operate as securities underwriter, dealer, and broker. The contact details can be found in the CSX’s website (List of CSX's Members). You can choose any securities firm of your choice.  

 

There are a few criteria you should consider when choosing your securities firm such as service offered, customer service and brokerage commission fee.

 

14.  Why do I need to pay commission fee? How is it charged?

 

Your commission fee will go to many different entities that have roles in the securities market. It supports the operation, infrastructure and function of whole securities market. The commission fee is charged only when your order is executed.  

 

15.  Where are my securities stored? Is it really safe?

 

All securities listed on the CSX are stored in script-less form in the securities depository system of CSX, where the safety and security of the information are highly ensured. It’s just similar to your money deposited in a bank where your money ownership information is secured, except that you cannot withdraw your securities in paper form. Ownership transfer will be done via the book-entry system, similar to money transfer in a bank.  

 

16.  Am I protected by law when investing in stock?

 

Yes, investors are strictly protected by law and regulation imposed by the Securities and Exchange Commission of Cambodia (SECC) to ensure investor protection, transparency, accountability, efficiency and effectiveness.  

 

17.  I heard that stock trading is similar to gambling. Is it true?

 

The fundamental concept in stock investment is to contribute your money into a company that can generate returns. The idea is no different from running your own business except you have no involvement in the business; therefore, no time or expertise is needed. Compared to gambling, where the capital is bet against the probability, the stock price and return of stock investment is based on many factors can be analyzed, diversified and predicted using publicly available information and scientific evidence.  

 

On the other hand, stock trading can be viewed as similar to gambling when you try to beat the market in a short-run, which also known as day trading. Day trading is when you buy in and sell back the stock intraday to benefit from the change in share price. Day trading can be risky and is normally dealing with odds, which is similar to gambling.  

 

18.  What are the trading hours at CSX?

 

For Auction Trading Method (ATM), the order receiving time shall be from 08:00 am to 03:00 pm but the trading starts from 09:00 am to 02:50 pm and once again at 03:00 pm before closing the market.  

 

For Negotiated Trading Method (NTM), the trading hours shall be from 09:00 am to 03:00 pm.  

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Section 2: Stock Market

 

1.  How can I buy shares at IPO?

 

When a company goes public, investors can buy shares at two different stages of the IPO processes, which are the Book-Building and Subscription. Book-building is the process of groping for a market price from public investors in the primary market (IPO). Interested investors shall quote a price within a predetermined range, with a quantity of shares they wish to subscribe for. At this stage, investors will be required to deposit 10% of the bid value (price x quantity). A few to several days after book-building period, the company will announce a final price, called IPO price, which was determined using weighted average formula based on all the prices and quantities information collected. Generally, around 70% of the issued shares will be allocated to the successful buyers at the book-building process (those who had the bidding price higher than or equal to the IPO price), and the remaining 30% of the issued shared will be made available for sale at the subscription process.  

 

The unsuccessful bidders or those who did not participate in the book-building process can subscribe for the available shares in the subscription process at the price determined at the book-building process (IPO price).

 

Please note that in the case where there is overwhelming amount of demand in each process, the shares will be allocated to investors in proportion to the amount they were bidding for.

 

To participate in any of the processes, investors must go to their relevant broker for advice and administrative work.

 

2.  What is the difference between trading of stocks listed on the Main Board and on the Growth Board?

 

Stock trading on the Main Board and on the Growth Board follows the same mechanism and procedures, including common trading hours, tick size, minimum trading unit, daily price limit, and trading methods.      

 

3.  What is the difference between limit order and market order?

 

Limit Order

Market Order

  • To ensure a trade execution at a predetermined price or a better price (i.e. price first, execution after)
  • To immediately sell or buy a stock at the best available price (i.e. execution first, price after)
  • Having lower price priority than market order
  • Having higher price priority than limit order
  • May take long time to execute, or not execute at all
  • Faster to execute
  • Trading price is confidently controlled
  • Trading price may be too low for seller or too high for buyer
  • Better for use in less liquid market where bid-ask spread is wide
  • Better for use for quick entry or exit of the market

 

4.  Can I place my order at any price?

 

Order price can be placed within the 10% daily price limit and in accordance to tick size specified in the market operation rules. For trading of equity securities through ATM, the tick size shall be determined as the following:

  • KHR 10: Securities with the price per share less than KHR 4,000;
  • KHR 20: Securities with the price per share equal to or higher than KHR 4,000; but less than KHR 20,000;
  • KHR 50: Securities with the price per share equal to or higher than KHR 20,000; but less than KHR 40,000;
  • KHR 100: Securities with the price per share equal to or higher than KHR 40,000; but less than KHR 100,000;
  • KHR 200: Securities with the price per share equal to or higher than KHR 100,000; but less than KHR 200,000;
  • KHR 500: Securities with the price per share equal to or higher than KHR 200,000; but less than KHR 400,000; and
  • KHR 1,000: Securities with the price per share equal to or higher than KHR 400,000.

 

The tick size for NTM shall be KHR 01 (One).

 

5.  What if my order wrongly placed by the broker, has gone executed?

 

Orders that have been executed cannot be cancelled. But your broker can request to CSX to correct the amount of share that they overbought for you by transferring the excess shares to their own account. Beside this case, your broker shall compensate you the different error amount in cash or in kind outside the market.

 

6.  What happen to my unexecuted order?

 

Unexecuted orders will be cancelled after the market closed on each day and the cash/securities will be released back to your balance.

 

7.  When is a trade settled in CSX?

 

A trade shall be settled around 08:30am on T+2 (two working days after the trading day). However, the cash and securities may be effectively credited to your account by 10h30am.

 

However, during the 2 days between trade and settlement, you are allowed to use the pending securities or cash to be received from a purchase or sale transaction to further trade immediately without having to wait until T+2 day.

 

8.  How do I get my dividend?

 

The dividend will be credited to your trading account at payment date.

 

9.  If I found my trade partner, can I do it without placing order to CSX?

 

If you found your partner, you can place a Negotiated Trading Order (NTM order) that will executed at the price agreed by both parties. The minimum order quantity is 50,000 shares or KHR 200,000,000 equivalent.

 

10.  What is Liquidity Provider?

 

Liquidity Provider (LP) is a CSX’s member that has accepted tasks to promote liquidity of a selected stock by quickly reducing the bid-ask spread to 10 tick-sizes or lower and then doing market making with public investors with the minimum volume of 100 shares. As observing, stocks covered by LP tend to have more trading activities and liquidity than other stocks.

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Section 3: Bond Market

 

1.  Is a different trading account required to buy/sell bond?

 

To trade bond on CSX, investors are not required to have a different account.

 

2.  What are the order types applicable for bond market?

 

Only Limit Order and Negotiated Order are applicable for Bond trading at CSX. Market Order is not applicable.

 

3.  Is daily price limit applicable for bond trading?

 

Daily price limit is not applicable for bond trading on CSX.

 

4.  Do the bond prices include accrued interest?

 

Bond price is quoted and traded in dirty price, which includes accrued interest.

 

5.  Is the Negotiated Trading Method (NTM) for bond and stock the same?

 

Most features of stock and bond trading through NTM are identical, including trading hours, price unit or tick size, no maximum order, no daily price limit, no order correction and error trade correction. However, there are two differences – minimum order of 1 unit for bond, but 50,000 shares or 200,000,000 KHR (whichever is lower) for stock, and daily price limit for stock is +/-10% where there is no daily price limit for bond.

 

6.  Is the Auction Trading Method (ATM) for bond and stock also identical?

 

The principles of matching bond and stock shall apply the same rules governing ATM as stipulated in the Operating Rules of Securities Market of the Cambodia Securities Exchange, except when there are two or more matching prices in single-price auction. For stock, the trading price shall be the price that is the closest to the last price, while, for bond, the trading price shall be the arithmetic average of the highest and lowest matching prices. In case the calculated price falls short of the price unit, such price shall be rounded up to the price unit.

 

Also, the minimum order quantity of bond and stock is the same (1 unit of bond/stock). But the maximum order quantity of bond is 10,000 units while it has none for stock.

 

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Section 4: Listed Companies’ Information and Market Data

 

1.  What are the market data and listed company’s information useful for investors’ investment decision?

 

Market data refers to all the data related to prices and trading of securities on the CSX, which include prices, change, %change, volume, value, index information, etc.

 

Listed company’s information refers to the information of the past and current situation and performance of the company, which allow investors to predict the future of the company, and thus to accordingly make investment decision. The company information includes company’s profile, financial statements, corporate disclosures, management and main shareholders information, dividend policy, business plan, management’s comments on the company, etc.

 

2.  How to access the market data?

 

CSX market data is available to the public in the Market Data section on our website. As current investors, you can access the real-time data by logging into the Live Order Book (upper right side of the CSX’s homepage), using the User ID freely provided by your broker.

 

3.  How to obtain the listed companies’ information?

 

The listed companies’ information is accessible to the public investors via the following channels:

 

  • CSX’s website in Listed Companies section, to obtain all the listed companies public information and disclosure documents.
  • Annual STOCKINFO booklet prepared and published by CSX in hard copies, and also in soft on CSX’s website, Education section.
  • Investor InfoPlat (iCSX)
  • Respective listed companies’ website.

 

Investors may also subscribe to the CSX’s website to get alerted emails about the latest information made public by the listed companies and the CSX, and may follow on CSX’s Facebook page, Telegram Channel, and Twitter to get various information of the CSX’s events and activities.

 

4.  What is the index of CSX? Does the Growth Board have an index?

 

CSX Index is a composite index that represents the movement of share prices of all stocks listed on the CSX. It is calculated by using market capitalization weighted average formula. For details, please visit Index section.

 

Currently, CSX Index is the sole index of the CSX. There is no index representing the Growth Board.

 

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FOR DATA VENTORS

 

1.  Where do I find historical market data?

 

Please click here to find the historical Market data.

 

2.  I am interested in real-time market data. Are there any market data services available?

 

Please click here for more information about market data services.

 

3.  The market data services I am looking for is not offered in the market data services section. What do I do?

 

We are open for the opportunity to discuss about your requirement. Please feel free to contact us via marketdata@csx.com.kh

 

4.  Are you open for the opportunity for market data exchange or agreement?

 

We believe in the impact of cooperation. Feel free to contact us via marketdata@csx.com.kh.