Thailand
Investment in Lao stock market surges
The value of stocks traded on the Lao Securities Exchange saw rapid growth last year, according to a report from the Bank of the Lao PDR.
The central bank released its annual report recently, providing an overview of the economic development of Laos last year including trading on the Lao Securities Exchange, one of the newest capital markets in the country.
According to the report, which is posted on the website of the Bank of the Lao PDR, in 2017 the value of stocks traded was about 343 billion kip (about US$41 million). This was a huge increase of 202 percent compared to the previous year.
The report, which cites data from the Lao stock market, a Lao-Korean joint venture, also highlights that about 51 million stocks were traded in 2017, an increase of 126 percent compared to the previous year.
Some 49 percent of traders were foreign nationals, who saw investment opportunities in one of the newest securities exchanges in Asia, according to the annual economic report of the Bank of the Lao PDR.
The bank did not comment on what might have contributed to this growth, but analysis shows it was most likely due to the greater availability of stocks.
At present, seven public companies are listed on the Lao Securities Exchange. This provides more options for people who want to move their investment from the traditional capital market of commercial banks to the stock market.
Some of the stocks, including BCEL, offer interesting investment returns. In 2017, the bank paid a dividend of 712 kip per share to shareholders. This return was higher than the interest earned on deposits made in Lao banks.
Laos opened the stock market in 2011 as part of efforts to expand the capital market. Up until then, the main capital markets were commercial banks, which could only offer short-term loans.
The government believed that a stock market would create better conditions for companies in Laos to access long term investment funding which they could use for business expansion.
Observers say that despite rapid growth in Lao stock investment, most of the active stock traders are foreign nationals. They say the sector responsible should do more to encourage Lao people to invest in the stock market.
For this to happen, Lao people need to have a better understanding of market opportunities and challenges. Investors also need to access to financial data and companies’ performance so they can make informed decisions about investment.
Source: http://www.vientianetimes.org.la/FreeContent/FreeConten_Investment.php