Lao Airlines announces intention to list on stock exchange
Lao Airlines announces intention to list on stock exchange
Lao Airlines has expressed interest in listing on the Lao Securities Exchange as part of efforts to mobilise investment capital for expansion purposes.
The airline's President Dr Somphone Duangdara met last week with Securities Exchange Commission officials in Vientiane where he made an official announcement regarding the company's intention to list on the stock market.
Dr Somphone said the state-owned national carrier hopes to obtain a new revenue stream from the stock market so that it can purchase more jet aircraft. This will enable the airline to boost its competitiveness before the Asean Economic Community comes into effect in 2015.
In 2015, airlines in Asean countries will be able to provide services throughout the region freely, which will present challenges for Lao Airlines unless they have a large fleet of modern jet aircraft. At present, the airline has four twin-jet aircraft while the rest are propeller driven.
Lao Securities Exchange (LSX) CEO, Assoc. Prof. Dethphouvang Moularat, said on Friday that Lao Airlines had the potential to list on the stock market. However, he could not make any comment as to whether the enterprise would be able to do so.
Assoc. Prof. Dethphouvang said the Ministry of Public Works and Transport has established a committee that will detail a plan for Lao Airlines to list on the stock market.
One of the main challenges for the airline is to make its business operations transparent so that potential shareholders know they have full and accurate information about the company's finances.
The airline must also have a good business plan to convince investors that its business will continue to grow, despite the stronger competition that will develop when Laos allows foreign airlines to operate in the domestic market.
Assoc. Prof Dethphouvang said six companies have expressed interest in listing on the stock market, some of which are privately owned. He said these companies will be accepted if and when they meet the necessary requirements.
The Lao Securities Exchange officially opened at the start of 2011. At present, the market offers six trading sessions. There are hopes that more people will invest in the stock market when it offers online trading services in the near future.
Lao people look on the stock market as a new business opportunity, but investors must be very careful about the decisions they make. Lack of experience in this field is one of the reasons that trading volumes on the LSX are still quite low
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