Investors welcome BCEL's first quarter performance

Investors welcome BCEL's first quarter performance

The BCEL share price saw a 400-kip increase at the close of trade on Friday as investors welcomed the first quarter business performance report from the public bank.

The bank's share price continued to rise to 8,650 kip on Friday after dropping to a record low of 7,900 kip on May 9. About 41,000 BCEL shares with a total value of 354 million kip were traded on Friday, according to a report from the Lao Securities Exchange (LSX).

The share price increased after the bank's managing director announced a gross profit of 88 billion kip for the first quarter of this year, giving investors a return on equity of about 23 percent.

The unexpected increase in the bank's profit was due to its growing credit and banking services and currency exchange as the bank continues to expand its business around the country.

The LSX Commission's dec ision to allow foreigners to own 5 percent of shares in BCEL also helped to boost investor confidence in the midst of growing foreign demand for shares, BCEL officials said.

Speaking at a press conference on Thursday, BCEL General Managing Director Mr Sonexay Sitphaxay expressed hope that the release of the public bank's first quarter business performance would encourage more people to buy and sell shares in the bank.

He said there had been no indication to date that investors were influenced by such information when buying and selling shares, and there were no indicators suggesting that BCEL shares had experienced a major price drop.

“The price of BCEL shares dropped slightly over the few months we've been trading but this did not reflect the true situation,” he said.

“The national economy remains stable and there is no reason for the price of the stock to drop. In addition, the bank's business data is very positive so the price of BCEL shares should increase or remain stable.”

Mr Sonexay said most traders did not refer to financial or business data when buying or selling shares, but rather imitated the actions of other buyers and sellers. He explained that when demand for shares rises, the share price increases, and when demand drops, so does the share price.

He was confident the government's decision to allow foreigners to buy and sell shares in BCEL would attract experienced stock traders to the Lao securities market.

Lao investors could learn from their methods and experience, he added.

BCEL is one of two public companies listed on the LSX. The government sold 15 percent of its shares in the bank to domestic investors and 5 percent to bank staff. The government plans to sell a further 10 percent to strategic business partners.

vientiane times