Investors see many opportunities in Laos stock market

The Lao stock market holds opportunities for Vietnamese investors, with a newly born securities firm and a recent memorandum of understanding between the Lao Stock Exchange and Viet Nam's bourses.


In March, Lao Airlines met with the country's Securities and Exchange Commission Office to formally announce its intention to list.

There are currently only two listed stocks in the market: Banque Pour Le Commerce Exterieur Lao (BCEL) and electricity firm EDL-Generation (EDL-Gen). BCEL has fallen around 7 per cent since the beginning of the year, but EDL-Gen has risen 13.8 per cent.

Also in March, the Lao stock market welcomed a new securities company, Lao-China Securities Co Ltd. It expects to deliver a variety of services including brokerage and underwriting by July.

Another securities company – Lanexang Securities – is a partnership between Sacombank Securities (SBS) and the Lao Development Bank which opened in 2011.

On May 10, the Lao Stock Exchange met with the Vietnamese bourses to work on developing securities products and exchange of information. Accordingly, investors in Viet Nam can purchase Lao shares online via a system called "Home Trading".

"The system will create more favourable conditions for Viet Nam – the 4th largest foreign investor the Lao stock market in 2012," a representative from the meeting commented.

According to data from the Lao Stock Exchange, the current playground is dominated by foreign investors, who accounted for 58.46 per cent of the market last year.

However, foreign ownership is capped at 20 per cent in Laos.

The Lao government is considering increasing the cap following recommendations by its securities companies, but there has been no official decision.

The Lao stock market has high growth potential. It rose more than 35 per cent last year, becoming the 8th fastest stock market in the world, data from the Lao Stock Exchange showed.

As of yesterday, the LSX Composite Index had grown over 11 per cent since the beginning of this year.


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