History and current status of the stock exchange launch

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1 History and current status of the stock exchange launch We expect that the July target for launching the exchange will be met, and that the two first IPOs (Phnom Penh Water and Telecom Cambodia) will start trading on November 11, 2011 as mandated by the government SECC and CSX established CSX initial target launch date CSX second target launch date Licensing of securities firms Announcement of underwriter and SOEs to list July Exchange ready for operation December Initial listings and start of trading Underwriters mandated State-owned enterprises (SOEs) to list Tong Yang Securities Mandated as underwriter for 3 SOE (2 identified) SBI Phnom Penh Securities Seeking involvement in project funded by Japanese investors / government entities Phnom Penh Water Tong Yang Securities underwriter Sihanoukville Port SBI PP Securities underwriter Telecom Cambodia Tong Yang Securities underwriter Phnom Penh Port (Potential) May be 3rd entity listed by TYS 14

2 CSX launch is well-prepared and supported by a large infrastructure of related firms The launch of the CSX has been delayed several times, which has allowed the Government of Cambodia, the SECC and the CSX to complete all necessary preparations The launch is supported by a strong pipeline of IPO candidates, a large universe of securities firms, strong local retail and international institutional investor interest and the necessary back office and advisor infrastructure The launch of the CSX has the opportunity to be significantly more successful that the launch of the Laos Stock Exchange earlier in 2011, which has been characterized by limited liquidity, limited retail investor interest, few listed companies, and only 2 securities firms operating Stock Exchange Listed Companies Phnom Penh Water Telecom Cambodia Sihanoukville Port Listed company 4 Listed company 5 etc... Investors Institutional investors (Foreign, Local) Individual investors (Foreign, Local) Regulated Advisors Accounting Firms Valuation advisors Legal advisors Audit Firms Financial Institute of Cambodia Royal Government of Cambodia Securities & Exchange Commission (SECC) Regulated Securities Firms Underwriters Tong Yang Securities SBI Phnom Penh Securities Phnom Penh Securities OSK Securities Campu Securities CVS Cana Securities Dealers SBS Securities Golden Fortune Securities Brokers Cambodia Capital Acleda Securities CAB Securities Sonatra Securities Investment Advisors Angkor VDS Securities Angkor Capital Advisors Cambodian Securities Exchange (CSX) Securities Depository Settlement Banks Acleda Bank BIDC Canadia Bank Registrar, transfer and paying agents Acleda Bank SBS Securities Tricor Securities Services 15

3 The CSX - an attractive opportunity A number of factors contribute in making the CSX an attractive market opportunity for potential investors Market in a more advanced state of readiness than the Laotian stock exchange which launched in early 2011 While Cambodia s economy is smaller than Vietnam s economy, there is scope for Cambodia to follow the growth pattern of the Vietnam stock exchanges as the economy develops Significant pipeline of IPO opportunities Fee levels and commission rates set to be attractive Significant and addressable retail investor segment International investor interest picking up Large number of licensed players will drive dynamic market 3 identified SOEs, plus another 2-3 SOE candidates which will list Large financial services firms already positioning for a listing Several large private companies exploring or getting ready for listing Significant number of candidates for listing in the next 2-4 years IPO underwriting fees in the range of 6-7% or higher on proceeds from offering Large and mid-market IPO candidates of meaningful scale Attractive economics will ensure that existing and potential future brokers / intermediaries will continue to be committed to the market A small but significant market of middle class and wealthy Cambodians in excess of 100,000 individuals Individuals holding significant excess cash and lack of alternative investment opportunities Retail investors will drive daily trading volume and opportunistic trading Visibility of stock market launch, combined with a renewed interest in high growth emerging markets is putting Cambodia on the map for investors Significant base of regional funds are actively watching the CSX launch Investors who missed the launch of the Lao stock exchange will be motivated to participate in the CSX 13 licensed securities firms including 7 regional / non-local players are licensed Licensing scheme also covers all relevant support functions Leading accredited accounting and audit firms include PwC, KPMG and BDO The launch of the CSX is well-prepared and the exchange is positioned to be an active market for small and mid-market companies in the fast-growing Cambodian economy 16

4 CamCap is well positioned from a competitive position Considered by the industry to be one of the most professional, experienced teams on the ground in Cambodia While some players have an experienced senior manager, most staff are junior and lack experience (1) Underwriters Institutional focus: Tong Yang Securities / Independent SBI Phnom Penh Securities / PPCB OSK Indochina Securities / OSK Bank Campu Securities / Campubank CANA Securities (s) / Canadia Bank Retail Focus Phnom Penh Securities / Independent Cambodia-Vietnam Securities / BIDC (3) Brokers Cambodia Capital / Independent Acleda Securities (s) / Acleda Bank Sonatra Securities / Independent CAB Securities / CAB Bank (2) Dealers SBS Securities / SacomBank Golden Fortune Securities (4) Investment Advisors Angkor VDS Securities PLC Angkor Capital Advisors Legend: (s): Holds a settlement license in addition to the securities license 17

5 Potential IPO candidates Cambodia has a large number of companies which has scope for listing in the next 3-5 years Government SOEs already identified Confirmed - Telecom Cambodia - Phnom Penh Water - Sihanoukville Autonomous Port Potential - EdC - Phnom Penh Port - Postal service IPO candidates - short term - Acleda Bank - Sokimex Hospitality Division - Real estate projects / developers - Insurance companies - Textile industry firms - Ezecom - Infinity Insurance IPO candidates - long term - Energy distribution / generation - Cable TV / Entertainment - Fixed line telecom operator - Casinos - Retailing / distribution of consumer products - Banks / financial services - Micro-finance institutions - Media and advertising - Generic pharmaceuticals - Construction materials (cement, steel, distribution) - Free zones / logistics - Consumer staples - Agriculture processing - Mobile operators - Security services - Toll roads - Railroads - Royal Limousine - Local offices of global firms In addition to 4 SOEs announced for listing, there are a number of private companies who consider a listing. Several underwriters are planning announcements in the near future of private sector candidates 18