ABA set to become third bond issuer on the CSX
US cuts off preferential trade access for India
ADVANCED Bank of Asia Limited (ABA Bank), a National Bank of Canada Group member, will become t he t hird bond issuer in t he Cambodian capital market af ter it obtained approval from the National Bank of Cambodia (NBC), it announced on Friday.
Insiders have said the move shows that the Cambodian capital market is becoming more attractive to investors.
ABA Bank plans to raise 100 billion riel ($25 million) through its first corporate bonds issued in the Kingdom’s capital market.
The bonds will have a maturity date of three years with an annual coupon rate of seven to 7.75 per cent.
Net proceeds from the bond issuance will be used for operating expenditures as well as growth in the lending business, according to the bank.
“[The money] will support rural micro, small and medium enterprises [MSMEs] including women entrepreneurs in Cambodia,” the bank said.
SBI Royal Securities Plc is the sole financial adviser and underwriter for ABA Bank’s landmark transaction.
Cambodia Securities Exchange (CSX) Market Operations Department direc
tor Kim Sophanita said while companies which list on the exchange are provided a 50 per cent, three-year tax exemption on profit by the government, ABA Bank’s entry will boost the attractiveness of the Cambodian stock market.
“ABA’s entering the market will be a huge contribution to the Cambodian securities market. As the CSX’ index had continued to rise since early this year, the public’s awareness of the stock exchange is also increasing,” she said.
Following NBC approval, ABA Bank will submit a Listing Eligibility Review Application to CSX.
Sophanita said ABA Bank would be able to officially issue its first bond in the next two months following the approval.
LOLC (Cambodia) Plc, CSX’ second bond issuer, officially listed on May 10.
LOLC CEO Sok Voeun welcomed ABA Bank’s announcement, saying an increase i n listed companies on the stock exchange is a positive sign for the Kingdom’s securities sector.
“In the future, there will be more financial institutions and other companies coming into the market because it can help the companies to raise more funds and expand their operations,” he said.
ABA Bank will become the eighth company listed in CSX and will become the third bond issuer after LOLC and Hattha Kaksekar Limited (HKL).
As of Friday, ABA Bank’s total assets totalled $3.36 billion, making it the third largest bank in Cambodia. THE US will end preferential trade treatment for India from Wednesday, US President Donald Trump has announced, in a fresh economic headwind for New Delhi alongside slowi n g g r owt h a n d re c o rd unemployment.
India has been t he si ngle big gest benef ic ia r y of t he decades-old US Generalised System of Preferences (GSP) prog r a mme, a l low i ng t he countr y to export $ 5.7 billion wort h of dut y-f ree goods in 2017, accord i ng to f ig u res from US Congress.
Trump said in a statement issued late on Friday t hat he wanted greater access for US goods to t he g ia nt Sout h Asian nation.
“I have deter mi ned t hat I nd ia ha s not a ssu red t he United States t hat India will prov ide equitable a nd reasonable access to its markets,” Trump said.
“Accordingly, it is appropriate to terminate India’s desig nat ion a s a benef ic i a r y developing countr y.”
Trump announced in March that he would be ending the preferential trade accord with India, but did not give a date.
Washington has sought to make India a closer d iplomatic a lly, but has long complained about limited access to t he huge market of 1.3 billion people.
The US had a $26.7 billion t rade def icit w it h I ndia i n 2017-2018.
The a nnouncement is t he latest headw ind to t hreaten the Hindu nationalist government led by Prime Minister Narendra Modi, who was reelected to his second term in a la ndsl ide just week s ago after campaigning partly on his record as a n economic reformer.
Official figures released on Friday showed that India’s growth slowed for the third straight quarter to 5.8 per cent i n Ja nuar y- March, whil e unemployment hit a 45-year high last year.
The Indian government made no immediate comment on Washington’s move, but media reports said New Delhi was considering higher import duties on more than 20 US goods including agricultural produce and chemicals.
Indian commerce secretary Anup Wadahan played down the move to end the country’s GSP status in March, saying t h a t p r e f e r e n t i a l t r a d e accounted for a fraction of its nearly $80 million in annual exports to the US.