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Morgan Stanley firm buys $43M of Acleda Bank shares

Harrison White

One of the world’s largest investment firms Morgan Stanly has purchased $43.23 million of Acleda Bank shares through Cambodia Securities Exchange marking the largest ever Negotiated Trading Method (NTM) buy.

The deal was approved by shareholders during an Extraordinary General Meeting held last year when ABC shareholders approved the transfer of a 3.5 percent stake in the lender from Triodos to North Haven Thai Private Equity Rumdul Company (Hong Kong) Limited.

North Haven is managed by Morgan Stanley with North Haven’s Ong Ling Wei the authorized representative of the company.

The previous record for an NTM was $16.77 million by Royal Group which purchased a majority share in Phnom Penh Special Economic Zone and brokered by SBI Royal.

To read more about Royal Group’s purchase of PPSP click here.

Kim Sophanita, Director of the CSX told Cambodia Investment Review that the exchange is excited that it keeps breaking high records continuously.

“More large transactions indicate that there are more big investors presenting in the market which is evidence of improved investor’s confidence and market expansion,” she said.

Chris Robinson, Partner of legal, tax and investment advisory firm DFDL and one of the advisors involved in the deal told Cambodia Investment Review: “As the largest series of trades on the CSX to date, this transaction represents a significant milestone for the CSX and a strong endorsement of the resilience of the Cambodian economy and its financial services sector.”

“After extensive liaison with the relevant authorities on the required approvals and their sequencing, this transaction will also pave the way for more streamlined future trades using the negotiated trading method,” he added.

Investors have traded a record $27.4 million in equities on Cambodia’s Securities Exchange for the first quarter of 2022, increasing 221% from $8.5 million in the same period of 2021.

According to official CSX quarterly statistics, 97% of trade was from local investors and 91% were individuals with Acleda Bank bar far the most traded stock with over $22.03 million a 1231% year-on-year increase.

Investors ready to take advantage of ‘undervalued’ ABC stock price

Acleda Bank has been trading well below its 2020 IPO price of KHR 16,200 a share currently selling for around KHR 12,000 a share.

Last month the bank surprised many investors in the market by announcing 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.

Despite the record low share price the bank has posted a record annual after-tax profit of $166.67 million, 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 Acleda Bank’s staff shares float click here.

The international rating agency Standard & Poor’s (S&P) has awarded Acleda Bank a Stand-Alone Credit Profile rating of bb and a Credit Rating of B+/Stable/B. S&P said the ratings came as a result of the bank’s strong business franchise, stable revenue streams and strong retail base.

Trust says will purchase an 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 the market.

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 was 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 bank’s 2022 outlook.

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