02/07: Daily updates of the Lao Securities Exchange

02/07: Daily updates of the Lao Securities Exchange

1. Executive Summary

The Lao Securities Exchange: Extended periods of scarcity have, for the first time, flushed BCEL all the way down to zero shares. Since no trade was successfully carried out for the public bank today, its base price for Tuesday will be 8,000 Kip as stipulated in the “special quotation” rule. On the other side, EDL-Gen was able to stay afloat with 38.5K shares (-15%), and in exchange, the company had to place its market value on the sacrificing altar. By the end, only the 5,200 Kip (-0.95%) remained alongside a weakening turnover of LAK 200.5 million (-16%).

Laos-Malaysia tourism ties set to expand

Two-way travel between Laos and Malaysia has seen an increase in recent years, a trend that is expected to continue. Since Malaysian-based low-cost airline Air Asia has started its direct air service to Vientiane in December 2007, the number of travellers between the two countries has increased quite substantially. Tourist arrivals in Malaysia from Laos increased from 35,000 in 2009 to 38,000 last year, and are expected to exceed 40,000 this year. Meanwhile, tourist arrivals from Malaysia to Laos increased by 11 percent, from 14,000 in 2009 to about 15,500 in 2010.

2. The Lao Securities Exchange

The Lao stock market

The main artery of BCEL’s demand was dried off right after the 2,040 shares (-89%), which was the main cause of its trading dehydration. Demand has never been this low. Were investors just taking a break? Or did the public bank finally run out of luck? The befuddled supply panicked to 21.5K shares (+174%), which was understandable. This is truly the time for contemplation.

As soon as demand uttered a sigh of exasperation (gone from 52.3K to 45K shares), EDL-Gen immediately trimmed its supply down to 44.5K shares (-26%) in order to secure some trades. The 5,250 spike was fairly short, and now the company is back at orbiting the 5,200 Kip. The downtrending demand also signals a more volatile period for the electricity company. This week started out rather vaporously.

The LSX Index 1,083.92 -9.71 [-0.89%]

EDL-Gen pumped the only life-force into the market’s liquidity, saving it from trading paralysis. The LSX exchanged a total of 38.5K shares (-19%) for almost LAK 200.5 million (-21%). Approximately 89 bps were lost, the Lao index hid away in the 1,083 points.

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