President and Chief Executive Officer of ACLEDA Securities Plc. Dr. Prom Visoth spoke with CIR Leader Talks on being the most used brokerage firm for Cambodia’s stock market as well as the ongoing development of future products.
“The Group decided to launch ACLEDA Securities in 2010 to firstly participate in the development of securities market and sector. In addition, the group was looking to diversify their investments in the financial sector,” he said.
However according to Dr. Prom Visoth for the first ten years, the firm struggled to raise enough revenue to cover costs due to the ultra-low level of stocks on the board.
Adding it wasn’t until ACLEDA Bank was listed in 2020, marking the largest ever IPO and subsequent number one traded stock the firm has been able to slowly recover some of those initial losses.
“Our main revenue streams are the brokerage fees, which have generated from brokerage service, bondholders’ representative agent and securities selling agent,”
ACLEDA Securities revenue derived mainly from brokerage fees set at approximately 0.5%, hence increasing the number of listed stocks as well as the overall value and volume has been a priority,” Dr. Prom Visoth said.
To read more about CSX trading volume in 2022 click here.
To achieve this we have been working with the Securities Exchange Regulator of Cambodia, to increase awareness and understanding of the securities market and its benefits to the public in order to increase the demand side and trading activities.
“So far we have overcome the previous years of negative financial results before the listing of ACLEDA Bank in 2020 because there were not many brokerage fees however we have now recovered during this time,” he added.
According to CSX, ACLEDA Securities trading accounts bought and sold a record $150 million worth of stock in the second quarter of 2022 accounting for 96% of total trading on the exchange.
In addition, 84% of new accounts were opened through the leading broker during the same period.
Most awarded brokerage firm in Cambodia
Since 2020, ACLEDA Securities has become, by far, the most popular out of the 12 licensed brokerage houses by the Securities and Exchange Regulator of Cambodia winning last three quarters in 2020, all four quarters in 2021, and the first two in 2022.
The quarterly award is determined by calculating the total trading value (accounting for 60%) and the amount of new trading accounts opened (accounting for 40%) as well as overall Mobile Trading System usage.
In addition, it obtained both the “Active Market Supporter Award” and the “Best Broker of the Decade Award” during the national conference on Cambodia’s Capital Market: “A decade of market emergence and ways forwards” organized and awarded by SERC and CSX.
“I believe we continue to win the CSX broker award every quarter due to our strong competitive advantages such as being a goodwill subsidiary of ACLEDA Bank a leading bank in Cambodia,” Dr. Prom Visoth said.
“We also have the largest investor base accountable for nearly 70% of the market as well as a convenient bank link system allowing our investors to transfer money from their bank account to their trading account and vice versa,” he added
To read more about the broker of the quarter award click here.
Reflecting if there was a lack of competition in the market Dr. Prom Visoth did not believe so citing the 12 licensed security firms operating in the market in comparison to only nine equity-listed companies. Additionally, most of the listed firms were not high volume because they were not bank, telecom, or IT stocks.
Future products by the ACLEDA Securities
Looking to the future Dr. Prom Visoth believes the current framework has been well implemented for supporting the growth of market and sector, investor protection, public awareness program, new product development, and tax incentive in the securities sector.
“However, the sector now needed to take some time and encourage more participation from all related parties to better improve the securities market and sector which can encourage more investment in CSX,” he said.
“CSX is still positive even it is slow progress but it still gradually move forward. Strategically, we are seeking any good opportunity for the development of any new products permitted by the SERC and fitting to the demand of the market at the appropriate time,” he added.
Dr. Prom Visoth highlighted the firm was developing an online opening trading account system via web browser interfacing with SERC’s Online Investor ID System and CSX’s system which will provide better convenience to investors to open their trading account by themselves without having to come to our office.
“We’re also working to develop a Trading Platform interfacing ACLEDA Bank Mobile with CSX Trading Mobile via API for our investors can transact one-stop trading service when they have ACLEDA Mobile App in their hand,” he added.