Cambodia’s domestic market is quiet at the best of times. There is little equity underwriting business and secondary trading volumes are wanting, but SBI Royal Securities takes the lion’s share of what little there is.
There has not been a deal in the primary equity capital markets for over two years. The last public offering was by Sihanoukville Autonomous Port in June 2017, which was sole sponsored by SBI Royal. At CR108.1 billion ($26.5 million), it is the largest IPO on the Cambodia Securities Exchange to date.
The CSX, incorporated in 2010, only has five listed stocks, and trading volumes tends to wax and wane from month to month. But when they are high, SBI Royal’s name is ubiquitous.
Under the leadership of chief executive officer Shuzo Shikata, the firm spent six of the 12 months up to the end of May 2019 as the leading brokerage on the bourse as measured by market share. In December 2018 and in March and May of this year, it captured over 90% of the equities market.
SBI Royal did endure a slump in equities trading in the third quarter and part of the fourth quarter last year, losing some market share to its primary competitors Acleda Securities, the trading arm of Cambodia’s Acleda Bank, and Canadia Bank’s brokerage Cana Securities.
But it was back on form in the first half of 2019, leading from February onwards, with value and volume unparalleled by its peers.
In the months where SBI Royal was not top of the league table, trading value was typically in the hundreds of millions of Cambodian riel, creeping into the billions in January with CR2.2 billion from a volume of 310,528 shares. But SBI Royal took over from then, and showed its prowess in May when it brokered 19 million shares in trades with a total value of CR240.8 billion.
The firm has been instrumental in expanding Cambodia’s minuscule capital markets, doing more than any other house to develop a local bond market. It was sole underwriter for the debut riel issuance from microfinance lender Hattha Kaksekar, which printed a CR120 billion three-year bond in November 2019, listed on the CSX in December.
And the market has since begun moving: LOLC printed Cambodia’s second riel bond in April for CR80 billion via a mix of FX-linked and straight coupon notes.
SBI Royal wins this year’s award thanks to its strong position in equities trading, its work developing Cambodia’s local bond market and its status as an independent brokerage among bank-backed peers.