BCEL share price continues fall, despite French bank buy in

BCEL share price continues fall, despite French bank buy in

The drop in the price of BCEL bank shares will not affect the US$18 million share purchase agreement between the Lao government and French bank COFIBRED, according to the BCEL Director General.

Mr Sonexay Sithphaxay said yesterday that the French bank would not cancel its agreement with the Ministry of Finance to buy 10 percent of BCEL shares from the government at 11,000 kip per share, despite the BCEL share price dropping to 7,900 kip on the Lao Securities Exchange.

“The French bank carefully studied the asset value and performance of the bank before it made a decision to buy shares at a price of 11,000 kip and therefore they will not cancel the purchase agreement,” he told Vientiane Times .

BCEL's share price has dropped away this week, down 100 kip in Monday trade, 200 kip per share on Tuesday, and remaining unchanged at 7,900 kip per share yesterday, despite the announcement of the French bank's acquisition.

The drop in the BCEL share price went against the expectation of market analysts, who believed that the decision of the well-known French bank would give a boost to the price of the banking stock.

Vientiane Times stock market expert Dr Darrell Walker said that Lao investors often fail to use all available information before making a decision to buy or sell a stock and as a result the BCEL share price did not rise as most experts expected.

“The drop in the share p rice reflects the inexperience of stock traders in Laos,” he said.

He said most investors in Laos are new to share trading and different from traders in developed countries, adding that professional traders have to search for information and study it carefully before making buy and sell decisions.

He said that it would take some time for Lao stock traders to become more professional, adding that it took at about six years before Vietnamese stock traders learned how to properly trade stocks.

The BCEL share price reached an all time high of 15,000 kip in the first few months after it listed and dropped to a low of 7,900 kip in May before rebounding slightly after the bank announced its first quarter profit figures.

The value of the Lao bank's assets had reached 11,920 billion kip by the end of the first quarter of this year, growing by 25 percent compared to the same period of the previous year.

The bank generated revenues of 188 billion kip from January to March, reaching 27 percent of its annual plan, while expenditure was 100 billion kip, resulting in a gross profit of 88 billion kip.

vientianE times