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11/02: Daily updates of the Lao Securities Exchange
EDL-Gen dominated the Friday sessions with almost 92% of total market trades. Although, EDL-Gen does not generate stable trading frequencies like BCEL, it surely can recover at a faster rate. This stock has plunged for almost 25% from the top since the last time it experienced an abnormal trading volume like that of yesterday. Perhaps after the recovery, EDL-Gen can gather enough momentum to strive through its high record. Investors started to feel the pressures again when BCEL suddenly throttled its liquidity to only 65 thousand shares, resulting in a demanding surplus of 260 thousand units, which is 150 times higher than the yesterday figures. The BCEL’s resurgence has brought much confidence to the general public, which believes that this stock will get back to where it left off the last time.
1. Executive Summary
- The Lao Securities Exchange: The Friday sessions could be signified as the twilight of the Lao Securities Market when both stocks soared to their uppermost limits. EDL-Gen glided upward an effortless 5% and closed at 7,350 Kip per share. At the same time, BCEL, not far behind, skewed up 4.92 percent and closed at 12,800 Kip per share. The overall market liquidity has been improving over the last two days, indicating a possible transformation of the Lao stock market. The LSX index slips 7.22% compared to last Friday; while EDL-Gen and BCEL fell 8.13% and 3.76% respectively in the same period. Total trading value amounts to 26.7 billion Kip over the week, suggesting an average turnover of 5.35 billion Kip per day.
- Nayoby Bank keeps interest rates level: The central bank has raised the policy interest rate from 10% to 12.5% in September last year, and as a result commercial banks in Laos have increased savings interest rates to mobilize investment funding. However, Nayoby Bank still maintained the loan interest rates unchanged at 7% for one year loans, 8% for one to three years loans and 10% for loans over three years. Nayoby Bank was established as a policy bank which does not accept deposits from the public.This bank has received low interest loans worth 1,181 billion kip from the central bank since it was established in 2007, and it has released about 885 billion kip in loans to business people and farmers, particularly those located in 47 poor districts around the country – The Vientiane Times.
- Garment maker boosts output for Japanese market: A major garment exporter, Santei-Lao Co Ltd, is preparing to build a third garment factory, which will be much larger than the first two, in Vientiane once it has accumulated a workforce of at least 600 people later this year. The company plans to produce women's clothing and then men's clothing for export to Japan. According to a Lao Garment Industry Association, Laos currently has 104 garment factories of which 53 are producing for exports. Last year's exports were about 1.6 trillion kip (US$195.4 million). The number of Lao garment manufacturers has also increased due partly to the rising labor costs in China.More foreign garment investors hope to invest in Laos due to its low labour costs. However one of the main challenges facing the Lao garment industry is a shortage of labour, as many workers prefer to seek employment outside the country where higher wages are on offer – The Vientiane Times.
2. Exchange Rates: 11/02/2011
Exchange rates, quoted for the Lao Kip, by the Lao Development Bank
3. The Lao Securities Exchange
The Lao stock market
EDL-Gen dominated the Friday sessions with almost 92% of total market trades. Although, EDL-Gen does not generate stable trading frequencies like BCEL, it surely can recover at a faster rate. This stock has plunged for almost 25% from the top since the last time it experienced an abnormal trading volume like that of yesterday. Perhaps after the recovery, EDL-Gen can gather enough momentum to strive through its high record. Investors started to feel the pressures again when BCEL suddenly throttled its liquidity to only 65 thousand shares, resulting in a demanding surplus of 260 thousand units, which is 150 times higher than the yesterday figures. The BCEL’s resurgence has brought much confidence to the general public, which believes that this stock will get back to where it left off the last time.
The LSX Index 1,571.47 74.58 (4.98%)
The index arched upward by 4.98 percent as a result of appreciating stock prices, closing strongly at 1,571.47 points. Total market volume reached 793 thousand shares and exchanged for almost 6.18 billion Kip, which is approximately 30% more than the average market turnover.
Appendix
* Market Data
LSX Index
EDL-Gen
BCEL
Lanexang Securities
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