ACLEDA Securities Plc. (ACS) successfully obtained approval from the Securities and Exchange Regulator of Cambodia (SERC) to commence distribution of the Banjaran Asset Management (Cambodia) PLC (BAMC) Asia Equity Fund on July 12, 2024, becoming Cambodia's first Collective Investment Scheme (CIS) fund distributor.
An official launch ceremony to commemorate this milestone was held on July 23, 2024 at the Oakwood Premier Phnom Penh, presided over by H.E. Sou Socheat, Director General of the SERC; Oknha Sen Pisethvannida, Director of BAMC; and Dr. Prom Visoth, Director of ACS, with many other invited guests in attendance.
ACS first obtained approval from the SERC to be a ‘Distributor Company’ of CIS funds on February 6, 2024. BAMC had earlier obtained approval from the SERC to launch the BAMC Asia Equity Fund (BAEF), Cambodia's first securities regulator-approved CIS fund, in November 2023.
BAMC also obtained approval for Fund Registration from the SERC to commence investments within BAEF on July 15, 2024. Daily pricing will now begin to reflect the valuation of the underlying assets within the BAEF.
“The event today highlights the development of the securities market in Cambodia,” stated H.E. Sou Socheat while addressing the launch ceremony attendees. “In addition to raising cash by selling shares or issuing bonds, we can also raise capital by creating a collective investment scheme (CIS). Raising money through the CIS is a new concept for our investment market.”
“We are honoured to be able to work with ACLEDA Group on the distribution of BAEF," shared Oknha Sen Pisethvannida. "This final piece will allow investors to approach any ACS branch to buy and sell units in our daily traded BAEF.”
“We are pleased to collaborate with BAMC, pioneering this new development within Cambodia's capital market sector," added Dr. Prom Visoth, Director of ACS. "Following our research visit to Singapore, we recognise this as a natural evolution in the securities industry. We hope that our partnership will contribute to Cambodia's continued growth and progress.”
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Investing In The BAMC Asia Equity Fund In Cambodia
ACLEDA Securities Role As A CIS Distributor
Investors interested in the BAEF can seek to contact a representative at ACLEDA Securities to learn how to buy the fund. Once subscribed to the fund via ACLEDA Securities, the securities distributor will then invest into the fund that BAMC manages.
“The beauty of having a collective investment scheme is we (BAMC) are just the managers we do not touch the money, so in this case, ACLEDA pushes the money to the fund, and the fund is controlled by an independent trustee (Stronghold Trustee Co., Ltd.),” explained Christopher Wong, Executive Director of Banjaran Asset Management Pte Ltd. in Singapore, which acts as an advisor to BAMC.
“The responsibility of the fund manager, in this case BAMC, is just to manage the fund, so there is a safeguard because the trustee is safeguarding the assets. The beauty of this is you can invest safely,” he added.
What Global Markets Will The BAMC Asia Equity Fund Invest In?
Wong affirmed that the BAEF will be investing across the Asia-Pacific region, excluding Japan, under which the biggest stock markets are in China and India.
“We are giving investors exposure to these markets, but obviously there are also the technology giants… so Taiwan and Korea are also an important part of the technology supply chain, and there are good companies like Samsung in Korea, TSMC in Taiwan,” he added.
More importantly as well, Southeast Asia is sort of a neglected market. It's got a huge population – Indonesia alone has a nearly 300 million population – and, as we have said before, Cambodia has the best demographics. It's like a pyramid: young population means youngsters are driving the growth of the economy. So we will be investing across the region, and we will have around 30 holdings in the fund, and we hope to diversify in not just one particular country or one particular sector, but across different sectors.
What Are The Expected Returns From The BAMC Asia Equity Fund?
According to a press release issued by BAMC, the fund aims to deliver an expected return of 7-10 per cent per annum over the medium to long term, however, the company stresses that investment return is not guaranteed.
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Developing Cambodia's Capital Markets Through New Collective Investment Scheme Funds
Through this partnership, ACS and BAMC hope to develop Cambodia’s capital markets in line with international trends. The official launch and distribution of the BAEF, a retail investment fund, means investors in Cambodia now have a new option to invest in global markets through a regulated CIS fund.
Elaborating on this point, Wong told B2B Cambodia:
ACLEDA – the organisation as a whole, whether it's the bank, or the securities company – is a very prominent leader in the financial services sector with a huge network of branches or touch points with the common man in Cambodia, and with this partnership, we believe that we are able to give the common people in Cambodia an investment option, and not just in Phnom Penh, but also across the country.
“With this partnership, we are going to work with ACLEDA to educate and also allow people to understand more about investment opportunities in Cambodia. It's not just your plain vanilla fixed deposit or property market, this is an important diversification that gives the common people the power to access another option to build their personal wealth," Wong added.
CIS funds are highly regulated, and investments made within the funds are subjected to multiple checks and balances by independent parties. Periodic reports are given to investors to ensure transparency, aligning with Cambodia’s mission to ensure financial stability within the financial sector.
BAMC and ACS aim to establish the benchmark for responsible investment practices and address some of the concerns that general investors have when investing in a historically unregulated environment. BAMC also hopes that the BAEF will also help to open up new opportunities for more CIS funds to invest in projects within Cambodia under the same regulated framework in the future.
Furthermore, Wong stressed that BAMC is looking forward to introducing more CIS funds and investment securities options for the general public.
Obviously, we started with a more traditional offering, which is public equities, but we wish to be able to introduce more products, whether it's fixed income or alternative asset classes, to the people in Cambodia. Of course, we need to work with the regulators to ensure that the interests of investors are protected, and we're very happy to work with them because we are in this country for the long haul.
“If we had wanted a shortcut, we wouldn't be doing this step by step, and every step is a significant milestone because what it means is that the market is getting more ready for development,” Wong added.
“We got our license early last year, we launched our fund late last year, now we have distribution in July this year, so every single step of the way is a big milestone. And for us to have reached this milestone, stakeholders needed to have an understanding of where we were, where we are, and where we want to be. This means they understand the roadmap even more, and that's why we are pretty encouraged by this,” he concluded.
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Parts of this article were sourced from a supplied press release.