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15/03:Daily updates of the Lao Securities Exchange
1. Executive Summary
The Lao Securities Exchange: The Lao securities market witnessed a significant reaction from BCEL as it unexpectedly turned green (up by 2.27%) despite the odds placing against this stock. The volume surge has stretched the turnover of BCEL by 125%, to roughly 680 million Kip. There were some positive signals from the electricity generation company: demands surged 37% and supplies dropped 19%. EDL-Gen also managed to maintain the same level of market capitalization despite the price drop in the first session. The overall turnover of EDL-Gen has diminished by 35%, down to only 792 million Kip.
Hydropower developer oversees resettlement compensation: Theun-Hinboun Power Company Limited is preparing over 5.3 billion kip (~US$663,000) for displacement compensations of 177 families due to the new dam project in Khamkeuth district, Borikhamxay province. The families that relocated themselves independently will receive higher compensations because they are not provided with land or homes.
Foreign reserves drop as imports rise: Amid the shrinking supplies of major foreign currencies such as the US dollar and Thai baht, the Governor of the Bank of the Lao PDR, Phouphet Khamphouvong, claimed that the current level of foreign reserves is sufficient to support imports for four months. A number of commercial banks in Laos have tightened up foreign currency exchange. Some are advising customers wanting to buy foreign currency to exchange money at their main branches or headquarters.
2. The Lao Securities Exchange
The Lao stock market
It’s uncommon for the price of BCEL to appreciate while the price EDL-Gen decreases or stays unchanged; that situation has only occurred twice: today and on the 12th January (the second trading day). The size of trades on BCEL suddenly enlarged 120% to roughly 76 thousand units, suggesting a possible ‘catching bottom’ reaction from traders. Another supportive sign is the shrinkage of BCEL supplies, by 40%, down to only 130 thousand shares. The market has a reason to put an optimistic coat on BCEL; however, significant demands need to build up over a period of time to support a sustainable recovery. Historical records showed that the total trading volume of BCEL since the beginning has reached almost 5 million shares, equivalent to only 18% of its outstanding shares. The corresponding figures for EDL-Gen are 14.5 million shares and 6%. It’s safe to conclude that up till now, large institutions and shareholders have not actively participated in the Lao securities market, boosting the confidence in the long-term investment.
The LSX Index 1,336.90 +5.28 [+0.40%]
The Lao benchmark enjoyed a static gain of 0.4 per cent as both stocks fortified their market value; however the index still remained in the lowest zone over the course of 7 weeks. Roughly 197 thousand shares, down by 10%, were exchanged on the market, generating a turnover of 1.4 billion Kip, down by 3%.
lanexang securities
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