Cambodian bourse gets boost

Speaking at a conference in Malaysia that focused on alternative investments, analysts forecast a tough two years as the world emerged from the global financial crisis, after which economies would still be dominated by a period of low growth and low interest rates that would restrict returns on bonds, cash and traditional equities.

"Some investments in Asia are already a little overpriced but over the long term in Asia you can't go wrong," said Georges Ugeux, former executive vice president of the New York Stock Exchange.

"Don't try and re-invent the wheel ... build a structure that's close to other markets so liquidity comes naturally."

He said that if US dollars and Cambodian riels were used in the exchange, given the dual currency system within the broader economy, it would "reduce one of the great risks confronting the markets - currency fluctuations".

A recurring issue brought up among experts was the need for disclosure laws. Uguex together with Supachai Panitchpakdi, secretary general of the United Nations Conference of Trade and Development, said without proper oversight Cambodia's tiny pool of potential investors would be left to trade among themselves.

"You can't get outside capital unless you have disclosure. You have to be very clean; otherwise, investors simply will not trust you," Ugeux said. He urged Cambodian leaders to follow the Chinese model in opening up business accounts.

As a former director general of the World Trade Organisation and deputy prime minister of Thailand, who successfully steered his country through the 1997-1998 Asian financial crisis, Supachai has witnessed changing economic patterns over decades.

He was also an instigator of Thai foreign policy when Cambodia began its transition to a peacetime economy more than a decade ago.

"We have helped Cambodia a lot over the years, and I think they're doing well," he said.

"I laud the idea of a stock market. It will be a very good thing for them to have." But he warned against the excessive hype and speculation that led to spectacular crashes on the Thai stock market as far back as 20 and 30 years ago, when the country "didn't have the right kind of governance".

"What's needed is oversight, adequate companies and adequate finance laws," Supachai said.

Officials from the Korean exchange - which owns 45 percent of the planned bourse - have warned initially it would have "basic" features.