Investment in Lao stocks continues to grow
Investment in Lao stocks continues to grow
Local and foreign investors feel more confident to invest in the Lao Securities Exchange after it has operated successfully over the past three years.
According to the annual Lao Economic Outlook report released earlier this month, the Lao stock market provided average stock transaction services of 107,000 units a day in 2013, increasing from 93,000 units a day in 2012.
The average investment value per day of the stocks in 2013 was 761 million kip, increasing from 500 million kip in 2012.
The increasing stock transaction services at the Lao Securities Exchange has become one of the indicators that local and foreign investors feel more confident to invest in one of the newest stock markets in Asia, which can offer them good profit investment returns.
The report does not provide details where most of the stock market investors come from. However, according to observations, most of the people who invest in the Lao stock market are foreigners in particular Chinese, Vietnamese and Thai.
Lao people consider investment in the stock market as a new investment opportunity and therefore they need some time to study the potential to avoid investment risk.
At present, there are three companies listed on the Lao stock market, namely BCEL, one of the largest commercial banks in Laos, EDL Gen, one of the major electricity generation firms in Laos and Lao World, which operates shopping malls and entertainment venues in Laos.
The price of BCEL stocks saw an average increase of 31 percent in 2013 while the price of EDL Gen stocks saw an average increase of 13 percent in the same year. Information on the Lao World stock price is not yet available as the company just listed on the market earlier this year.
The Lao stock market expects to list more companies this year and many observers have said the move will see stock trading services increase over the upcoming year.
A cement factory in the central province of Khammuan is hiring a consulting firm to restructure its business to meet the requirements of the Lao stock market before it opts to launch an initial public offering.
A number of Lao firms including Lao Airlines, telecom companies and coffee processing companies have potential to list on the Lao stock market however these companies must first improve their business structures in order to be listed.
The Lao government opened the stock market at the end of 2010. The Lao-Korean joint venture began transaction services in early 2011. The government believed that opening the stock market would enable companies in Laos to seek long term investment funds, which were previously limited as commercial banks in Laos only provide short term investment funds.
The continued expansion of the companies will help create jobs and income for Lao citizens, which will see more people rise above the government's poverty line benchmark.
vientiane times
