Cambodia's long awaited stock exchange begins trading

Phnom Penh enjoys one of the best domestic water supplies in Southeast Asia
Image caption The Phnom Penh Water Supply Authority is responsible for purifying the raw water for people to drink it from the tap

The murky brown liquid swirling in a tank behind Phnom Penh's barely-used railway station does not immediately seem like anything to rouse the excitement of international investors. After all, it is just water drawn from one of the city's main rivers, the Tonle Sap.

But the interest of fund managers and individual punters alike has been piqued by what happens to the raw water after it leaves the intake tank.

A series of chemical and filtration processes purify the liquid until it is clean enough to drink, straight from the tap.

Several international sanitation experts have told the BBC that Phnom Penh enjoys one of the best domestic supplies in South East Asia.

Image caption PPWSA says it'll use the money to provide clean water to the rest of the people in Phnom Penh

And the company responsible is hoping to capitalise - literally - as it becomes the first stock to be traded on the Cambodia Securities Exchange.

"We feel very happy and proud, because we have made history in our country," says the Phnom Penh Water Supply Authority's director general, Ek Sonn Chan.

The Phnom Penh Water Supply Authority (PPWSA) has shelves full of trophies marking the international awards it has won - not just for the quality of its product, but its business affairs as well.


This explains a large part of its appeal to investors who may have viewed Cambodia as a risky bet.

PPWSA's reputation not only soothed those nerves, but stoked demand for the company's shares.

The initial public offering (IPO) of 15% of the hitherto state-owned company was 17-times oversubscribed.

Ek Sonn Chan believes that having outside shareholders on board will increase the company's accountability - and contribute to the growth of corporate responsibility in the country as a whole.

Meanwhile the money raised by the IPO - roughly $20m (£12.5m; 15.2m euros) - will help PPWSA to grow.

"We will increase our coverage by the construction of additional treatment plans and lay more distribution to provide clean water to the rest of the people in Phnom Penh who haven't yet received water. And we will probably expand our business to the rest of the country - and perhaps other countries too."

If PPWSA workers want to find out how their company's shares are performing, they will not have to travel far.

The Cambodia Securities Exchange (CSX) is based in Canadia Tower, diagonally opposite the water company's headquarters.

A gigantic video screen outside proudly announces that the first day's trading will start at 9.09am - followed by a succession of adverts for securities firms offering to help clients trade in Cambodian stocks.

String of delays

But those traders have had little to do since the official launch of the CSX in July 2011.

The 25th floor Trading Room is the size of a school classroom, with cubicles and computers for the deal-makers - but the day before the launch, it was deserted as usual.

From now on, however, that should change.

Image caption Cambodian Minister of Economy and Finance at the inauguration ceremony in July 2011

"This is the real start of the market," says Morten Kvammen, the director of SBI Royal Securities, one of a small number of licensed brokers in Cambodia.

"There have been ceremonies, the opening of the exchange building and the launch of the systems. But this the first day of real trading on the exchange."

"There's been a lot of interest - both from foreign institutions, and a lot of individual investors - many of them local, but also some of them from overseas," he adds.

Some of this is undoubtedly due to the novelty of the IPO.

Once trading starts, it should soon become clear if there is a sustained appetite for PPWSA stock at - or above - the offer price of $1.57.

With Cambodia's economy growing steadily and the likes of the Wall Street Journal tipping it as a place to invest, there seems to be reason for optimism.

But one stock alone will not be enough to sustain the CSX.

"We need more companies to list," says Morten Kvammen.

Two more state-owned companies - Telecom Cambodia and the Port Of Sihanoukville - are due to follow PPWSA on to the CSX in the coming months.

But so far there has been little sign of any privately-held enterprises taking the plunge.

If a local conglomerate like the Royal Group - which has interests in everything from a mobile phone network to a bank - decided to list, it would send a clear indication that Cambodia had embraced the stock market model.

Until then, the CSX Trading Room may remain a relatively quiet place.

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