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LSX president rejects claims of market manipulation
The Lao Securities Exchange (LSX) has rejected public speculation that recent stock price volatility, despite a lack of new corporation data, is the result of market manipulators.
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| Stock market day traders at the Lao Securities Exchange |
“There are no stock market manipulators at work,” Lao Securities Exchange President and CEO Mr Dethphouvang Mounlarat said on Thursday. “The stock price volatility for us shows the market is alive.”
He said the rise and fall of stock prices was normal and this occurred in many countries, adding that it would make no sense if prices remained unchanged.
Mr Dethphouvang stressed the LSX had solid mechanisms to detect market manipulators and would freeze stock trading immediately on detecting manipulators or inside traders.
The CEO agreed in an interview with Vientiane Times that the price of BCEL and EDL-Generation stocks remained volatile despite the absence of new economic or corporate data.
BCEL and EDL-Generation stocks saw minor increases from 12,000 kip to 12,400 and 7,000 to 7,250 respectively on Friday after continual declines from 13,400 and 7,700 over the previous four days.
The share prices reached their zenith of 15,400 kip for BCEL and 8,800 kip for EDL-Generation in mid February and have fluctuated ever since, according to a report from the Lao Securities Exchange Commission last week.
Mr Dethphouvang said the main indicator that this is not the result of market manipulation is that trading volumes of both stocks were very small, adding that inside trading would show a major increase in volumes.
He said the current stock price volatility was due to stock traders buying and selling stocks for profit, which is normal market function and the aim of investing in it.
A stock trader who has been regularly visiting the LSX since the market opened on January 11, said he made consistent profits on his transactions.
“I did not study economic data before making decisions to buy and sell the stocks,” he said, adding that he believes that changes in macro economic data would not greatly influence LSX stock prices, as was the case in many countries.
He said he studied the prospectuses of BCEL and EDL-Generation before buying shares, adding that the current price of the stock is too high for him to expect return on equity. He was not seeking dividends, just to buy and sell stocks as a short term investment.
A Japanese stock market journalist, Mr Masakata Maeda, said recently that day traders can cause stock prices to fluctuate, which is bad for other shareholders, but admitted that stock markets could not operate without them.
He observed that day traders were one group of people who would buy stocks when others sell to raise cash.
Vientiane Times
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