Investment fund eyes Lao stock market

Investment fund eyes Lao stock market

Leopard Capital, a major investment fund in Asia, plans to invest US$75 million in the Lao and Cambodian securities markets.

Cambodia's Minister of Finance Keat Chhon cuts the ribbon during the launching ceremony of Cambodia Securities Exchange held at Canadia Tower on July 11, 2011.

“These are fast-growing economies. They're both getting 6-8 percent growth per year and during the life of the fund they'll both have stock exchanges and sometimes that can give you windfall returns when markets get overvalued,” Leopard Capital Managing Partner Douglas Clayton was quoted as saying by Reuters yesterday.

The decision by the company to invest in the Lao securities exchange was made after the company in May invited a group of investors from Australia to investigate investment opportunities in Laos, particularly in the growing hydropower sector.

Clayton Leopard Capital has stated it expects to earn 25 percent annually from its investments in hydropower projects in Laos over the next 10 years.

Leopard Capital considers Laos as a new frontier market, which can offer international businesses attractive investment opportunities especially in mining, hydroelectric power generation, agribusiness, processing and tourism.

The company also made the observation that foreign investment rules in Laos have been streamlined and liberalised as foreign nationals can now lease land for 99 years, and the government is offering faster investment approvals and better tax breaks. Foreign investors can own 100 percent of an approved business.

Leopard Capital has already invested in EDL Generation and is now looking at the possibility of investing in other Lao companies.

Only two public companies are currently listed on the Lao Securities Exchange - BCEL and EDL Generation. The exchange expects to see about another five companies list this year, including Enterprise of Telecommunication Laos, with market officials announcing the mobile phone service provider now meets market requirements.

A number of other companies, including the Dao Heuang Group, which is building the largest instant coffee processing plant in Laos, the Indochina Group, which produces cassava powder for export to China, and a mining company have expressed their desire to issue initial public offerings for listing on the exchange.

The World Bank predicts the Lao economy will see 8.6 percent growth this year, with the mining and hydropower sectors as the main driving forces. However, the bank has warned the Lao government to address the rising inflation rate in the country.

Leopard Capital, a private equity fund manager, was founded in 2007 by Douglas Clayton as a partnership of experienced Asian investment professionals with backgrounds in fund management, investment banking, business consulting, and operations management.

The company is based in the Cayman Islands and has presences in Cambodia, Laos, Sri Lanka, Bangladesh, and Hong Kong.

vientiane times