Cambodia Investment Review
Cambodia’s financial landscape has reached a milestone with the launch of its first collective investment scheme, a strategic move in the nation’s developing capital market. The scheme, spearheaded by Banjaran Asset Management (Cambodia) Plc. (BAMC), is also distinctive in its requirement for a 10% investment in securities listed on the Cambodia Securities Exchange (CSX). Targeting annual returns between 7-10%, this pioneering initiative also sets its sights on amassing up to $200 million in total funds.
A collective investment scheme is a type of investment fund that aggregates capital from multiple investors to purchase a diversified portfolio of securities. This allows individuals to gain exposure to a range of assets, which might be difficult or costly to access individually.
Investment Products to Stimulate the Capital Market’s Growth
His Excellency Sou Socheat, Delegate of Royal Government in charge as Director General of The Securities and Exchange Regulator of Cambodia (SERC), detailed the significance of BAMC’s recent licensure. Obtained in March, this license makes BAMC the inaugural entity in Cambodia authorized for fund management, distribution, and for handling fund repurchases or repayments.
Sou Socheat further shed light on the current composition of the CSX, which includes 20 listed companies, with 11 issuing securities and nine listing bonds. He emphasized the need for new investment products to stimulate the capital market’s growth and align it with international standards.
The BAMC Asia Equity Fund (BAEF), a unit trust, is the centerpiece of this endeavor. Managed by BAMC, with advisory support from Banjaran Asset Management Pte. Ltd. (Singapore) and trusteeship by Stronghold Trust Co, BAEF has set a minimum initial investment of $500 and a front-end load fee of 5%. The fund’s investment focus is on major listed equities in Asia, excluding Japan, with provisions for daily settlement dealing.
BAEF is structured to achieve a diversified portfolio, aiming to maintain at least 30 stocks across various countries and sectors. It is designed to deliver a targeted annual return of 7-10%. To participate, investors need to transfer funds to a specific account at Acleda Bank, licensed by SERC as the Cash Settlement Agen.
Integrating International Fund Management Expertise in Cambodia
Her Excellency Okhna Chan Theany, Chairwoman of BAMC, highlighted the launch’s impact on the Cambodian asset management sector. “This initiative is not only about launching a new fund. It’s about integrating international fund management expertise and best practices within the Cambodian context, while also fostering local talent in the field of asset management,” she stated.
This innovative scheme marks a transformative phase for Cambodian investors, traditionally dependent on bank deposits for investment. It provides an accessible platform for Cambodians to diversify their portfolios and engage with the wider Asia Pacific investment market. The BAEF, as the first of its kind in Cambodia, symbolizes a significant step forward in the country’s integration into the global financial system, offering novel opportunities for both local and international investors.