BCEL launches stock sale

BCEL launches stock sale

Lao people now have access to a new investment opportunity as BCEL this week became the first ever Lao enterprise to open up to public ownership.

Banque pour le Commerce Exterieur Lao (BCEL), one of the largest commercial banks in Laos, has become the first Lao enterprise to allow investors to subscribe for shares after obtaining permission to do so from the Lao Securities Exchange Commission.

The currently state-owned company announced yesterday that it would allow investors to subscribe for shares through a bidding system from December 13 to 18.

However, only Lao investors will be permitted to subscribe for shares in the bank as the commission is yet to decide on the portion of shares that foreign investors can hold in the company.

Under the BCEL initial public offering (IPO), the bank plans to sell 15 percent of its shares to domestic investors, with about 20.4 million shares to be made available. The initial price is 5,000 kip per share.

Potential investors can seek consultation with Lane Xang Securities Public Company, which will act as a broker for people wishing to subscribe and bid for shares in the commercial bank. Individuals and companies can subscribe for a minimum of 100 shares and no more than 2,049,000.

BCEL also plans to offer 5 percent of its shares to employees and 10 percent to strategic business partners. Foreign national investors can discuss share purchase with the Lao Ministry of Finance and the bank directly.

BCEL is one of the largest state-owned banks in Laos. It was established in 1975 and became a full commercial bank in 1986. At present, the bank has 18 branches and 22 service units, employing about 900 staff around the country.

The bank has established business relations with more than 100 banks internationally, allowing it to hold a large share of cross-border money transfer services.

The value of the bank's total assets as of December 31, 2009, was 6,547,848 million kip (about US$770 million). The bank expects to make a 124,717 million kip (US$15.5 million) profit this year. Some 41 percent of the bank's income comes from interest on loans, 33 percent from service fees, 17 percent from exchange rate services and the remainder from other businesses including gold trading and ATM services.

Numerous people yesterday attended a meeting to disseminate information on the BCEL IPO held at the Lao Securities Exchange, a good indicator that there is strong interest in purchasing shares in the bank.

Many potential investors noted investing in the stock market is a challenge since it will be the first time they have done so. The EDL Electricity Generation Company is currently waiting for the commission to approve its IPO proposal. The company expects to announce the sale of its shares from December 16 to 24.

The Lao Securities Exchange opened in October and will commence trading services early next month. At present, the market is improving its IT systems and installing other necessary systems to ensure smooth stock trading services.

Vientiane Times