01/07: Daily updates of the Lao Securities Exchange

01/07: Daily updates of the Lao Securities Exchange

1. Executive Summary

The Lao Securities Exchange: Nothing bites like a sore liquidity. On Thursday, BCEL took its volume to a place where pleasant smiles can be seen; one day later all that left was a puff of smoke, much like a magic trick. The public bank has grounded its trades from 56.9K to 2K shares (-96%); market value stayed unchanged, thus turnover contracted by the same portion to LAK 16.1 million. EDL-Gen managed to enhance trades by 151% to 45.4K shares, while maintaining the same price. This only good news of the day has brought LAK 238.3 million in turnover to the electricity company.

Weekly changes: The trading proliferation was obvious; the weekly volume accumulated to 654.5K shares, up 144% from last week’s 268.5K shares. BCEL was the persevering bee for its major contribution to market’s trades, approximately 64 percent. The LSX almost tripled its turnover from LAK 1,620.1 million (US$ 202 thousand) to LAK 4,701.5 million (US$ 586.4 thousand). The Lao index closed 0.77% upward to 1,093.

Laos to take a further 7,000 foreign workers

Laos is expecting further employments of 7,000 skilled foreign workers for development project, due to the shortage of domestic skilled workers. There are already several thousand foreign workers in Laos, some of whom are here without work permits. Laos hopes to attract 23,000 billion kip (US$2.8 billion) in investment funding to secure GDP growth of 8.3 percent for the 2011-2012 fiscal year. Between 50 and 60 percent of the investment is expected to come from the private sector with mining and hydropower the largest contributors.

2. The Lao Securities Exchange

The Lao stock market

The vaporific demand once again left BCEL unprotected against its agitating suppliers. The 77% demand reduction, from 80.7K to 18.3K shares, could have shattered all of the Thursday’s achievements. Fortunately, the supply side was able to keep calm instead of feeding more firewood to the raging stock; total supply shrunk 89% to 7.8K shares. In fact, the bank’s suppliers have better at subduing their urges, reflected by the diminishing selling surpluses. Furthermore, BCEL has made great progresses with its daily trades, from the last week’s 15.3K to this week’s 83.6K shares. BCEL will most likely sustain a daily oscillation ranging from -1.3% to +1.9%. EDL-Gen has started seeding hopes into the community. The company’s daily trades averaged out to 47.3K shares this week, denoting a 23% improvement from last week. Buyers kept unloading shares onto the 5,250 Kip, and their counterparts wanted make sure of that by releasing just enough shares to cover the base demand. However, the further this battle of wits drags out the more casualties will be done to the company’s liquidity. Historical data has indicated that as soon as liquidity reaches a bottleneck, EDL-Gen will immediately sacrifice parts of its market value for more mobility, which in turn would usually refresh investors’ facial expressions.

The LSX Index 1,093.63  0.00 [0.00%]

Anticipated turbulence, the Lao index quickly strapped up the Thursday’s 1,093 points. Market’s liquidity cautiously returned to 47.4K shares (-37%), thus reducing turnover to a more conservative LAK 254.4 million (-54%).

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