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ACLEDA stock price plunges after staff shares float surprises market

Harrison White

Cambodia’s only equity listed commercial bank – ACLEDA Bank (CSX:ABC) – has announced the remaining 14.9% of all staff shares will be floated on the open market from April 6 plunging the stock down 10% in daily trade.

In a statement to the exchange yesterday ACLEDA Bank said the regulator had approved on March 22 to float the remaining 64.9 million ACLEDA Staff Association (ASA) shares on the open market from April 6, equivalent to 14.9% of total company shares.

In response the shares price dropped from KHR 13,000 to KHR 11,700 a share falling 10% before the exchanges trading limit was hit.

Many investors had predicted the company would float the remaining staff shares in a “gradual plan” over the coming years to prevent a sharp drop in prices with some shocked by the decision.

In June last year, a similar drop in stock price occurred after ASA was allowed to float 4 percent of total shares on the open market dropping the price from around KHR 16,000 a share to trade as low as KHR 10,000 a share in recent months.

The stock is predicted to continue falling sharply with high selling pressure from many staff who received the shares through staff benefits. The bank listed on the exchange in 2020 with an IPO price of KHR 16,200 a share with many first time investors losing 40% of their investment to date.

Despite the record low share price the bank has posted a record annual after-tax profit of $166.67 million, as shares rose to KHR 13,300 hitting the 10% limit in daily trade after AFT purchase statement.

The profit was an increase of 17% compared to an after-tax profit of $141.49 million in 2020. The company cited the record profit was mainly due to an increase in net interest income of 9.94%.

To read more about the company’s 2021 results click here.

Golden opportunity for investors

Director of the CSX Kim Sophanita told Cambodia Investment Review that the additional floating shares will put downward pressure to ABC share price due to an overload of supply and there comes a golden opportunity to buy ABC again while the fundamental value of ABC remains strong.

“In the stock market, the winners are those who could recognize undervalued and overvalued stock first, and could trigger best time to buy and sell,” she said.

“I believe sophisticated foreign investors would love to grab this great opportunity had they learn the situation however I in turn hope and encourage local investors to take the lead in investment opportunity as Cambodian people deserve to be shared wealth with this largest Cambodian owned commercial bank, she added.

Mar Amara spokesperson for Acleda Bank’s Investor Relations told Cambodia Investment Review from her point of view this is the nature of markets, supply and demand.

“With high supply prices go down and less supply price go up, but for real investors they will look at banks performance,” she said.

“The Bank has good performance on all points especially its profit over plan and expectations in 2022 for the bank performance is still good,” she added.

Trust says will purchase undisclosed number of shares

In February the company’s largest shareholder – ACLEDA Financial Trust (AFT) – said it has plans to purchase an undisclosed number of shares over the next five years in a statement released to Cambodia Securities Exchange.

To read more about the AFT’s five-year plan click here.

The statement read following the decision of their Board of Trustees and regulators, the AFT will buy the shares on the CSX from 2022 to 2026 based on their internal budget plan and 5-year strategy.

Cambodia Investment Review contacted AFT but was not provided any additional information on the number of shares nor a specific timeframe. AFT currently holds 25.74% of total company shares.

The AFT mission statement says it shall pursue directly and exclusively the aforementioned objectives and shall act altruistically and shall not primarily pursue objectives for its own private commercial interests.

Before ACLEDA Bank listed on the exchange in 2020 every employee had been awarded company shares before the IPO after they had completed their probationary period with over 11,000 staff holding company shares.

Cambodia Investment Review recently spoke with ACLEDA Bank Managing Director Dr. In Channy to discuss the 2022 outlook.

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