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07/03: Daily updates of the Lao Securities Exchange
1. Executive Summary
The Lao Securities Exchange: The Monday sessions have not shown a definite prospect for the rest of the trading week. EDL-Gen saw no changes compared to last Friday except for its trading volume; its turnover plunged 93% as a result. BCEL exchanged 1.85% of its market value for a 71% gain in trading volume. BCEL’s turnover appreciated by 68% to 186 million Kip.
- Telecom regulator: frequency fees are fair: Local telecom companies claim fees charged for the use of frequency spectrums are too high, but the state regulating body argues that the charges are much lower than those in neighboring countries. Currently the charges for frequency spectrum use average about 8 billion kip per company per year.
- "Kathing" faces coal shortage for cement production: The Lao Cement Company, owner of the most popular cement brand Kathing (bull), is now facing coal shortage for its cement production while market demand is increasing. Presently, the market needs at least two million tonnes of cement. This excludes the demand for building hydropower plants as 20 of them are under construction and for the development of high speed railway from China to Laos.
- Pig farmers pleased with high demand: Pig breeders in Nongbok district, Khammuan province, are overjoyed to find the sale price of pigs has risen to 8,000 kip per kg this year. Last year, half of the pig farmers in the local group had to close their farms due to lost profits, a pig farmer in Thabok district.
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2. The Lao Securities Exchange
The Lao stock market
BCEL blamed its depleted liquidity for the 1.85% loss in market value. Total demands and supplies declined by 37% and 14% respectively. Even though the market has swallowed 31% of BCEL’s market value over the last 5 weeks, IPO investors can still make a hefty 80% gains on their BCEL shares as of today. The unstable demands on EDL-Gen have unavoidably disappeared. More than 1.1 million shares were traded last Friday; however that figures have thinned out to only 77 thousand shares as this company maintained its market price of 6,600 Kip for the third time in a row. The level of demands and supplies are being gradually stretched out to the exhaustive points, and EDL-Gen might suffer the same fate as BCEL in a short run. However fundamental investors still perceived the current prices as strong buying signals for their long term investments.
The LSX Index 1,392.80 5.28 [0.38%]
The Lao Composite Index showed a static change of -0.38% as BCEL fell below its 6-week low. Total market trades sank to 94 thousand shares, passing even the lowest volume of last week. Investors grew exasperated as market turnover contracted to only 696 million Kip, the second lowest figure since the beginning of Lao securities market.
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