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Aegies Fund Management Plc. Fund Pre-Launch Press Conference

On September 26, 2023, Aegies Fund Management Plc. held a pre-launch press conference for its CIS Fund in Phnom Penh, Cambodia. Participants included H.E. Sou Socheat, General Director of the Cambodian Securities Exchange Commission, major local and international banks, accounting firms, law firms, and representatives of other strategic partners. Together, they witnessed this significant moment and looked forward to participating in the development opportunities in Cambodia's capital market.

Securities and Exchange Regulator of Cambodia (SERC) also simultaneously announced the content of the press conference on their Facebook page.
Source: SERC Facebook 

Agenda                                                                          General Director of SERC, H.E. Sou Socheat arrival

General Director of SERC and CEO of Aegies            Conference participants

50. The full text of the speech by Dr. Hsu, the CEO of Aegies Fund Management Company is as follows:

Your Excellency Director General of the Securities and Exchange Regulator of Cambodia Mr. Sou Socheat, distinguished guests, ladies and gentlemen, On behalf of Aegies Fund Management Plc., I would like to extend our utmost gratitude to all of you for coming to today’s press conference. At the same time, I would also like to express our highest apologies to all of you on behalf of Chairman Wei of Aegies. Chairman Wei is unable to attend today's press conference due to an unexpected change in his schedule, and he has instructed me to apologize on his behalf to all of you.
Under the guidance and direction of the SERC, I’m pleased to announce today that the public CIS fund in the Kingdom of Cambodia, also the first fund to be issued by Aegies Fund Management Plc. will soon begin its global fundraising after getting the approval from the SERC. This marks a significant milestone along the journey towards prosperity in the capital markets and asset management industry of the Kingdom. On this special occasion, it is our greatest honor to invite all of you here to share with us and witness this significant moment.
Aegies Fund Management Plc. is a subsidiary of High-Tek Group, a well-established public-listed company in Taiwan with almost 40 years of solid foundation. The management team of Aegies is led by experienced bankers and senior executives from the fund management industry. On top of that, our team also includes professional fund managers, Certified Public Accountant, Certified Securities Investment Analyst, and other dedicated staff. Today we are confident to say that, we are well-prepared for the launch of the fund. We possess excellent capabilities in software and hardware infrastructure. We have fund product planning capability and research competence. As part of Cambodia's fund management industry, Aegies is committed to do its best to help foster Cambodia's capital markets. By leveraging our extensive experience in fund management, we are confident to provide the highest-standard CIS fund products to investors in Cambodia and elsewhere in the world.
As you might be aware, money market funds are considered to be the best entry point and preferred choice for fund investments by international investors due to their relatively low risks and high liquidity. We can understand the attractiveness of money market funds by looking at some figures. Currently, the global assets under management for money market funds amount to roughly $5.62 trillion US dollars. Taking the neighboring Thailand as an example, the money market fund assets there totals $12.9 billion US dollars, accounting for roughly 12% of Thailand's total mutual funds. This highlights the significance of money market funds.
As the first public CIS fund offered by Aegies, this upcoming Fund boasts low investment risk and high liquidity. The Fund will primarily invest in Cambodian bank fixed deposits under a trust framework. Our targeted investors are mainly from Asia at the first stage, with the aim of channeling international funds into Cambodia's financial system. By launching this Fund, we are also showcasing the thriving and dynamic Cambodian economy and financial system to investors outside of Cambodia. This will further support the growth of Cambodian enterprises. And once these enterprises have the nutrients (I mean the capital they need), there is a chance that these enterprises can grow stronger in the future, and then have the opportunity to list on the Cambodia Securities Exchange (CSX) by issuing either shares or bonds. In addition, the issuance of CIS funds will also encourage local participation in the capital markets. This will in turn foster the prosperity of other financial products, such as stocks and bonds.
In August 2021, Aegies obtained the fund management license from the SERC. With the subsequent acquisition of Fund Administrator and Fund Distributor licenses from the SERC, we will be well-equipped with comprehensive capabilities to make a significant contribution to the Cambodian fund management market. 
In addition to investing in money market instruments, Aegies will also roll out diversified types of funds in the near future. These funds will invest in the property market through REITs, or invest in projects such as sustainable energy, which are also known as green funds. We aim to offer more products to Cambodian and global investors, which will hopefully promote the progress of related industries. 
Today, we are privileged to invite our valuable partners who play critical roles in the process of issuing the CIS fund, including banks and other financial institutions in Cambodia. We hope to collaborate closely with you to jointly drive the development of CIS funds in the Kingdom.
Once again, I would like to extend our sincere thanks to Director General of the SERC Your Excellency Mr. Sou Socheat, as well as the excellent team you led. I also want to thank all the distinguished guests who join us today. In closing, I wish all of you good health and every success. Thank you very much!

Dr. Sarah C.T. Hsu, CEO of Aegies, delivered a speech.

50.     The explanation of “An Introduction to Upcoming Fund” by Aegies, Mr. Chen

    THE DEFINITION OF CIS 
    Collective Investment Scheme (CIS) aims to pool the funds of a group of people and centrally manage and invest them by Fund managers. Through the professionalism of fund management companies, it can create better investment returns for investors in accordance with the principles of benefit sharing and risk sharing.
    The value created by CIS for investors and enterprises 

• ►    CIS collects funds from many investors and plays the role of pooling funds for investment and diversifying risks.
• ►    Entrust a professional fund management team to conduct professional research and investment, effectively saving investors time and energy and reducing risks
• ►    It can increase the efficiency of capital investment and liquidity, and can easily invest in large-scale and domestic and foreign investment targets.
• ►   Fund demanders and providers will establish investment relationships through funds as a bridge, which can quickly find funding sources for good investment projects, which is conducive to enterprise investment and development. 
• Characteristics of Cambodia’s financial market
• The Cambodian financial market is currently divided into three main sectors: the stock market, the bond market (capital market), and the banking system. 
• The banking system in Cambodia has been well-established and matured over the years. In comparison, the stock market and bond market need to complement industrial development and still have significant room for growth.
• Characteristics of Cambodia’s Financial System
• ►    Since the economy is still in a period of high growth, bank interest rates are relatively high.
• ►    Under the efficient supervision of the competent authorities, the performance is quite stable.
• ►    It is one of the few countries where the U.S. dollar can circulate and the exchange rate is stable.
• ►    The banking system is highly internationalized, with many foreign banks and microfinance institutions.
• ►    Internet banking, mobile banking, and electronic payment are developed and have a convenient payment system.
• ►    The issuance of government bonds has begun, and future growth is expected.
• Why Aegies Chooses to Invest in Money Market Instruments
• In terms of Cambodia’s investment market and tools, the products that are more attractive than those in Asia are bank fixed deposit products, which have higher interest income, and the issuance of monetary funds can also introduce domestic and foreign funds into Cambodia’s banking system. Improve the development of financial markets.
• ►    Simple capital preservation and easy for investors to understand
• The main target is deposits, there will be no problem of principal loss ( unless the bank goes bankrupt ) , and it is easy for investors to understand.
• ►    Relatively low risk
• Money market funds mainly invest in deposits and time deposits, and may include a small number of short-term bonds, government bonds and other high-credit-quality financial instruments. And it is deposited in different banks and specialized financial institutions to reduce the risk of a single target. Therefore, they usually have lower credit risk and market risk, making investors' principal relatively safe.
• ►    Strong liquidity, effective value preservation and good stability
• Short-term money market funds allow money to be withdrawn easily, so they are liquid. The goal of a money market fund is to maintain a net asset value ( NAV ) as stable as possible. While NAV may fluctuate slightly, the changes are typically minimal. In addition, it is not easily affected by market changes. If the stock market or bond market is not good, the principal and returns of the money market will not be easily affected.
• Benefits that investment in money market instruments can create
• In addition to earning investment returns for investors, it can also bring many benefits to the financial market.
• ►    Bringing money into the financial system
• ►    Create new investment opportunities for investors
• ►    In the early stages of the development of the fund market, such financial products were more easily accepted by the market

The Management and Roles of Each Organization under the CIS Structure  

CIS , in addition to the competent authorities and investors, there are five major institutions, including Trustee Company , Fund Management Company, Fund Distributor (FD) , Fund Administrator (FA) and CSA . Currently, Aegies is A fund management company with full licenses ( including FA and FD) that can provide a full range of services.  

The positive benefits that can be brought about after the issuance of CIS funds

• Increase Cambodia’s visibility in international markets
• ►After the competent authorities pass the CIS regulations, it is expected that different financial institutions and investors at home and abroad will invest in the establishment of fund management companies, and at the same time bring investment funds from various places into Cambodia's financial system and industry.
• Promote the sound development of the financial system
• ►As mentioned previously, investor funds can be directly or indirectly introduced into the banking and financial system for sound development.
• Active capital market
• ►In addition to the financial market, for example, fund management companies can invest in the real estate market after issuing REITs , or fund management companies can cooperate with developers to issue REITs to jointly develop real estate, which will inject capital into real estate.
• Create and develop the wealth management market
• ►Regardless of direct investment for the moment, there is currently no large investment market in Cambodia other than the stock market and bond market. The introduction of CIS fund funds into the financial market will create a new wealth management market. In the future, as long as all financial institutions obtain approval from the competent authorities, they will Can issue or sell investment products, thereby forming a new wealth management market.

Explanation of the CIS Fund content by Aegies Consultant, Mr. Chen

50. Securities and Exchange Regulator of Cambodia (SERC) Director, H.E. Sou Socheat, summarized the speech as follows:

Over a decade of the development of the securities sector in Cambodia, which began in 2008 and was officially launched in 2009. In 2012, We were so excited to have the first stock issue in Cambodia and get another one in 2013. H.E. Sou Socheat got promoted to Director General in 2014.  My first job is “How to reactivate the market that has only two stocks?”. First, we start to diversify to have more than just stocks, including bonds. And we start to place the bond regulation. Then in 2018, more and more stocks and bonds happened. And suddenly, in 2020, COVID-19 appeared, but it had a big spread in 2021 and made lots of development slow down. We prepared the fund market many years ago; that’s why many companies got licenses in 2019. The fund is planned to be issued in 2021, but due to the COVID spread, it has been delayed. Also in 2021, we just adopted the new law on Functioning and Organizing on the Non-Bank Financial Services Authority and SECC was called to be one regulator under the Non-Bank Financial Service Authority and changed its name from Security and Exchange Commission of Cambodia to Security and Exchange Regulator of Cambodia. There are lots of regulators under the Non-Bank Financial Service Authority, so when SERC has drafted a regulation, SERC has to invite all of the regulators for consultation and permission for consensus to implement the regulation. And now the Minister of Economy and Finance of Cambodia has agreed to sign and implement the Prakas on the Issuance of Fund Units. SERC will adopt a new regulation on Financial Soundness for Fund Management and implement it soon. The new regulation is to provide the company with a tool that has ratios that fund management companies need to respect in order to get healthy financial. This regulation is expected to be published in the next one or two months after the Board meeting.
Fund is not only a tool of trading for the people and investment but it is also the potential investor for the capital market. SERC is not so active in the capital market because it doesn’t have good actors. So, with the establishment of Aegies Fund Management and thanks to the Aegies team and Sarah, who think about the most safe fund to start, which is Money Market Fund, we can start by putting money in a safe place, such as bank or somewhere safe, and gain a profit. It will be a new trading tool to make a profit. Before SERC gives licenses to any fund management company, we have to do serious checks on that company. So, fund management is the professional company that has the ability to manage the fund for the investor’s safety. To ensure that’s safe, as Mr. Chen mentioned, this will require a lot of roles to participate. Fund Management can have FA and FD licenses but cannot have trustee licenses because SERC requires another separate company to keep the fund. Both parties have to report to SERC. Moreover, this new capital market will be the new financial instrument for investment. We wants to emphasize that it will has new important actor in the capital market, as Sarah mentioned in her open remark that another purpose of the company dropping the fund is for the products that it already has including stocks, bonds, and especially green bonds. We want all the fund management companies to invest in green bonds. And these green bonds should have issuance one or two this year and also next year as well. What Cambodia wants to see is not just giving a license to the company to raise funds, but Cambodia wants to ensure that it is a trustworthy place where they can safely keep their money. Fund Management Company will start to work on this, and once they poll the money, there’s a full market for the capital market. We encourages all the Fund Management companies to follow the vision and work together. SERC will support and also recommend Aegies Fund to comply with the regulations and hopes that Aegies Fund Management Company will go smoothly and start to have the first fund and many more fund coming.

The speech by H.E. Sou Socheat, the General Director of SERC       Aegies Management team and SERC Officers