LSX turnover exceeds US$32 million

LSX turnover exceeds US$32 million

The Lao stock market has been in denial for just on 10 long weeks because the stocks then started to become undervalued. We have received a lot of feedback regarding Saturday's report.

Readers have a thirst for more information about the local bourse. Of the 46 days since May 20, there have been a total 24 days where trading was under US$50,000 and only six above US$100,000. That is both a fundamental and a technical indicator that the market has been “oversold” and a rally is just around the corner - but that's not about to happen until substantial volumes emerge.

Volumes need to emerge, particularly for EDL.Gen. In February, the daily turnover for the LSX peaked at US$582,000 per day. Since then there has been a regular monthly slide, all the way down to July's current daily turnover of just over US$61,000 per day, an 89 pct fall. That's a natural stock market trading reaction, especially when stocks remain undervalued. So the message in the bottle this month is very clear - “accumulate” if you can find a seller. Understand what you can afford and soon - as such we recommend you see your broker immediately.

The local bourse has closed on very low volumes this week, but the exchange's performance to date may also surprise investors. Laos is Asia's newest fledgling trading stock market, with Cambodia expected to join the Asean bourses late in 2011. The LSX may be small but it boasts an impressive modern building on T4 Road, which houses the exchange and the local stock brokers, with all the gadgetry needed for investors to trade. Foreign investors can readily open an account onsite at the exchange, including onsite banking services. It takes around 30 minutes for a new investor to fill in the forms and open a banking trading and a broker trading account. Staff are there to assist investors.

The Lao stock market has completed 135 trading days to date with a turnover aggregate of around US$32.16 million. That's around US$243,000 per day. Strangely enough the number of shares is almost identical to the daily turnover of just under 243,000 stocks. February was the exchange's best month and June its worst. The top three turnover days were February 2 with US$3.34 million (2.978 million shares), February 10 with US$1.68 million (1.12 million shares), and March 4 with US$968,000 (1.7 million shares). When you look at the lows they have all been in June and July. On June 20, the market was becalmed with only 6,100 shares turning over for US$5,100. Similarly, on June 15, the turnover doubled to US$10,100 for 10,655 stocks and last Thursday only 16,900 shares sold for US$11,100 for the day.

vientiane times