LSX recieves funding for IT infrastucture
LSX recieves funding for IT infrastucture
The Lao Securities Exchange Commission has given the green light for the Lao stock market to complete the installation of essential IT infrastructure, so that it can offer an online stock trading service at the end of this year.
The commission approved a capital increase of about US$700,000 for the Lao Securities Exchange, at its fourth meeting of 2012 at the Bank of the Lao PDR in Vientiane yesterday, which will allow the LSX to complete the installation of essential IT infrastructure.
Deputy Prime Minister and the commission chairman, Mr Somsavat Lengsavad presided over the half day meeting.
The Lao stock market first opened in October 2010 and began stock trading services in January last year. Despite strong demand from local and international investors, the market was unable to provide the online trading service due to the lack of the necessary IT infrastructure.
At present, investors have to post buy and sell orders for their stocks via the telephone, fax or post, making it difficult for international investors to invest in the market. By comparison, stock markets in developed countries have been offering online trading services for many years now.
According to the stock market Chairman and CEO, Mr Dethphouvang Moularat, the Lao stock market, which is a joint venture of the Bank of the Lao PDR and the Korean Exchange, needs additional funds of about US$1.4 million to complete the IT infrastructure before it can offer the home trading service.
The Korean Exchange, which holds a 49 percent share in the Lao stock market has agreed to provide additional funds of about US$675,000 to develop the IT infrastructure, Mr Dethphouvang reported to the meeting of the commission.
Lao Securities Exchange officials believe that the introduction of the online trading service will help boost stock trading values on the exchange. According to a report from the Bank of the Lao PDR, overall stocks traded on the Laos Securities Exchange in 2011 amounted to around 301 billion kip in total – an average of 1.24 billion kip per day.
The formal meeting of the Lao Securities and Exchange Commission also discussed the proposed draft of the Law on Securities. The proposed law aims to create confidence for investors who want to buy stocks on the Lao exchange. Investor confidence is critical to allowing the country to mobilise funding for national development.
Mr Somsavat urged the law drafting committee to continue working with the Ministry of Justice to improve the draft content of the law before submitting it to the cabinet for consideration and approval.
He also urged the securities committee to implement the resolution of the conference to ensure the effective operation of the securities market.
vientiane times
