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09/02: Daily updates of the Lao Securities Exchange
Executive Summary
The Lao Securities Exchange: Unexpected fluctuation of BCEL’s price caught the attention of all investors. BCEL toppled in the first session to 11,500 Kip per share. However, in the second session, a fairly strong wave of buying orders was able to pull it back up to the base price of 12,100 Kip per share. On the contrary, EDL-Gen lacked sufficient supports and fell by 4.83 percent, hanging at 6,900 Kip per share. Total trading volume surged 127 percent to over 376 thousand units, representing a market turnover of 3.79 billion Kip.
Minister sets the target for rice production: The Minister of Agriculture and Forestry, Sitaheng Rasphone, has announced a target of more than 600,000 tonnes of rice this dry season, an increase of almost 100,000 tonnes over last year. To achieve this goal, the ministry wants farmers to grow rice on 125,000 hectares of land this dry season, an increase of 15,000 hectares compared to last year. The ministry also announced it would continue to impose a low rate-tariff of one percent on fertilizer imported for farming purposes in target planting zones. The ministry has instructed provincial Agriculture and Forestry Departments to work with banks, especially the Agriculture Promotion Bank, to ensure loans can be made available for planting purposes in focal areas of cultivation.
Hardier rice varieties seen as answer to weather extremes: Droughts and flooding have destroyed about 40,000 tonnes of paddy rice in each of the last five years. The Ministry of Agriculture and Forestry plans to supply special rice seeds to target farmers in 7 large and 14 small areas in a bid to reduce the impact of weather extremes on rice production. The ministry will also promote a system of rice intensification on some plots by using a single type of seedling to improve yields. Currently, Laos has about 680,000 hectares of rice fields, half of which are in seven large and 14 small areas; most of them are suitable for the system of rice intensification.
The Lao Securities Exchange
The Lao stock market
The LSX is transmitting a BCEL buy signal to traders as this stock received a fairly large exchanging volume on a downward trend like this. The 12,100 and 6,900 Kip per share represent the 105% and 60.47% capital gains respectively for the investments on BCEL and EDL-Gen at the IPO prices, therefore a large portion of selling orders over the last four days was just profit-taking reaction. Investors who did not win the IPO might want to review their homework as the stock prices are coming down to a more affordable level; and they need to pay close attention to the market for the Thursday and Friday trading sessions.
The LSX Index 1,477.46 -58.75 [-3.82%]
The Lao Composite index fell almost 75 points in the first session, however it climbed back up as BCEL retraced its steps, closing at 1,477.46 points by the end of the day. There are signs that the index is decelerating its bearish run, however, the current trend might persist until early next week.
Appendix
1. EDL-Gen
2. BCEL
Lanexang Securities
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