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Govt expects to complete stock market law this year
The government is drafting a law on securities and the securities market so it has strong legal support to manage this new investment source, according to a policy maker.
Lao Securities and Securities Market Commission Office's Acting Secretary General, Ms Vatthana Daraloy, said last week the law drafting committee expected to have the law written by the middle of this year before submitting it to the cabinet and National Assembly for approval.
“We hope that we will be ready to present the law for the assembly to consider and approve at the end of this year,” she told a group of print journalists on Thursday after giving a live interview to Lao National Television on stock trading in Laos.
Ms Vatthana said that, at present, the commission has at its disposal a prime ministerial decree on securities and the securities exchange as one of the main tools to manage fund mobilisation and stock trades. But the decree does not have sufficient power to ensu re problem-free stock trading while parts of the decree's content do not comply with existing laws.
“We need a law on securities and securities exchange if we want to prioritise development in the sector,” she said, adding that the law needed some new articles.
According to Ms Vatthana's statement to Lao National Television, the commission will also develop a regulation on information disclosure by companies listed in the stock market, as investors need accurate information before buying or selling their stock.
Accurate information plays an important role in stock prices, which rise and fall with the announcement of expected company profits and losses.
Macro economic infor-mation such as inflation, interest rates and the government's announcements on economic development also has an impact on the price of stocks.
The commission will also develop a regulation on foreign investors as the government wants to prevent any negative impacts from foreign investment in the stock market. Rapid inflows and outflows of foreign currency make it difficult for the Bank of the Lao PDR to keep the value of the Lao kip stable. Another important regulation the commission will develop concerns the payment system for stock trading.
The commission will continue to improve the capacity of its officials and working infrastructure, in particular the IT system. It will also continue to inform the public about stocks and the stock market so they will know how to invest – one of the main factors in helping companies mobilise capital.
The commission expects to approve proposals by a further two or three companies to sell their shares to the public and list on the securities exchange this year. It also expects to approve proposals for the establishment of more securities companies in the same period.
Ms Vatthana said the commission was able to manage stock trading operations over the past month, adding that the inflow and outflow of foreign currency was normal.
Vientiane Times
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