Laos has a Stock Exchange - Who knew that

Laos has a Stock Exchange – Who knew that?

In January 2011, the Lao government officially opened the Lao Securities Exchange (LSX). With financial and technical support from South Korea (the Korean Exchange has a 49% stake in the LSX), a $10m glass building was constructed to house the operations.

The LSX opened with 2 listed companies being EDL Generation (a subsidiary of the State owned energy company) and Banque Pour Le Commerce Exterieur Lao (BCEL), being the largest bank in Laos. Expectations were high that a further 3-5 would join by 2013. It was only in 2014, two further companies have been added to the Exchange being Petroleum Trading Lao (PTL) and Lao World (Lao World Exhibition and Trade Centre). I am not sure but am guessing that these are also majority government owned.

The idea is obviously to create a capital market to attract stronger foreign investment and opportunities. However, today volumes remain “limp” at the very best.

Average daily volumes are under 300,000 shares between the two securities representing approx. 1.67% of the total securities on offer. And based on these figures, the average daily value of trade is US$250,000. There are only two brokerage firms registered and available to trade securities.

The market opens in the mornings at 8:30am and trades only for 3 hours.

So who is trading these shares – absolutely no idea?

If you go to the LSX website at www.lsx.com.la you will find a nice message from the CEO indicating “cutting-edge” technologies and proclaiming an assurance that the LSX will become “a hub of the region” – no definition of ‘region’ is actually provided.

Its Vision Statement advises that it wants to “move towards being an international standard stock exchange” – okay, you have taken the first step in at least starting. It’s Mission Statement; well take a look at it as it just doesn’t make sense to me.

One positive thing I will say is that the LSX website does have good up-to-date financial information on the securities being traded – the equal of most other exchanges’ websites. However, there are only four securities that need to be monitored so I would suggest not a lot of time needs to be devoted.

I am not a licensed securities advisor but my suggestion is to steer clear of this one and perhaps take a look at other Emerging Markets. But maybe keep it in view as an opportunity down the track – what track and how rough, I just don’t know.