Nascent Bond and Equity Sectors Seen as Critical to Cambodia’s Long-Term Economic Transformation

Cambodia is looking to strengthen its capital markets as part of a long-term strategy to become a high-income country by 2050, with regulators and industry leaders identifying equity and bond market development as central to achieving that goal.

At the Capital Markets Development Forum – part of the UK-Cambodia Joint Trade & Investment Forum (JTIF) deep dive series organised by BritCham Cambodia and the British Embassy – held on June 12, 2025, experts discussed the challenges and opportunities facing the country’s financial sector.

Cambodia’s bond market remains significantly underdeveloped, accounting for just 0.3 per cent of GDP in 2024, according to Freddie Wong, Head of Prudential CLM Hub. This is especially clear when comparing figures with neighbouring Vietnam, where government bonds make up 23 per cent of the GDP, and corporate bonds make up 10 per cent.

“We all know this is still a very young capital market, representing only about 6 per cent of the GDP,” said Wong. “We do see an increase in trading accounts – comparing 2018 to 2024, it’s almost three times [more]. But the trading volume and value remain very low.”

There are currently only 11 stocks listed on the Cambodia Securities Exchange (CSX), but even within this small pool, the market remains heavily concentrated on two – ACLEDA Bank and telecom operator CAMGSM, who together account for 72 per cent of total market capitalisation.

For most enterprises, bank loans remain the primary source of debt funding, equivalent to 131 per cent of GDP, as of December 2024. In contrast, the total outstanding value of government bonds was just USD 116 million, with corporate bonds at USD 139 million.

Cambodia’s government bond market also differs significantly from regional peers in terms of maturity structure. While other markets issue a majority of government bonds with long-term horizons, 98 per cent of Cambodian government bonds mature in less than three years. Wong says issuing longer-term bonds could help insulate the government from fluctuations in interest rates and investor sentiment.

How to Develop Cambodia’s Capital Market to Support Vision 2050

Stephen Bates, Partner at KPMG, echoed the call for diversification and urged a phased approach to market development. 

“The priority should be building trust, particularly through the issuance of government and corporate bonds,” he said. “Target sectors for sustainable investment include infrastructure, energy, and real estate.”

Wong also stressed the importance of building a strong foundation through regulatory reform, adding that infrastructure and institutional capacity are key to driving the sector’s sustainable growth.

He added that insurance companies could play a crucial role in developing the capital markets, as there is an unrealised potential for them to allocate investment funds into equity and bonds Currently, the insurance sector in Cambodia holds approximately USD 820 million in assets under management (AUM), most of which remains in fixed deposits. This capital, if better deployed, could serve as a long-term funding source for equity and bond market growth.

Wong further emphasised that enabling offshore investment could help insurers develop a more diverse range of insurance products, which, in turn, would fuel capital market development.

“Offshore investments with proper control and guidelines help diversify investments and promote growth opportunities for insurers, such as investment-linked products (ILPs), where customers can get access to foreign investment funds in a controlled manner,” he explained.

He also highlighted the importance of raising awareness and improving access to insurance products that are linked to investments in the capital market. These instruments not only enhance consumer choice, but also contribute to deepening the market by connecting long-term savings to capital formation.