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31/03: Daily updates of the Lao Securities Exchange
1. Executive Summary
The Lao Securities Exchange: The unexpected cold and gloomy weather has eased off, but not even the faintest sunlight was spotted on the Lao securities market. EDL-Gen has been circling around the same area, looking for the past glory; but BCEL chose to go back to where it started. The today market traded EDL-Gen for 6,550 Kip per share and BCEL for 8,400 Kip per share. The market detected some enthusiastic subtleties as the amount of trades started to develop.
Rising transport costs a further blow to struggling families: Lao economists are very concerned about rising inflation as high oil prices have forced the transportation sector to increase their prices for goods delivery both within Laos and to and from other countries. The increase in transport costs will absolutely affect the price of goods in Laos, as well as the livelihoods of Lao people, particularly the low-income earners. The cost of transporting goods within Laos and to and from other countries has increased by between 10 and 15 percent this month compared to the beginning of the year.
Pork and fish prices soar due to disease outbreak: The cost of pork and fish in the southern provinces is on the rise after the temporary ban on the sale of beef. Southern people are consuming more fish after the outbreak of foot and mouth disease. The cost of pork has risen from 20,000 kip per kg to 30,000 kip while fish soared from 25,000 kip to 32,000 kip per kg. The ban on beef was implemented as a result of the foot and mouth disease outbreak in Saravan and Champassak provinces which began in December last year and has killed thousands of calves while many more are still undergoing treatment.
2. The Lao Securities Exchange
The Lao stock market BCEL almost plunged down to its 3 months low. The modest volume has not yet picked up the paces despite the cheapening price. We suspect that IPO investors without long term commitments have long gone since BCEL jumped on its bearish train in February. The recent sell-offs reactions were probably from speculators of the last couple days, trying to narrow their loss margin; because the likelihood of another price plunge is rather high. The total demands for BCEL registered an increase of 83 percent. However they sent a different message as most of these demands required BCEL’s price to be 1%-3% cheaper. The firm belief of the supplies side is being tested without mercy. Not much has changed for EDL-Gen; its liquidity remained stable, but the price fluctuation is fairly narrow, under 3% over one month. This stock will most likely continue its flat trend.
The LSX Index 1,321.07 -11.03 [-0.83%]
The Lao Composite benchmark slumped 83 bps, down to only 1,321 points. The index has declined 7.7% after 4 trading weeks. The volume was unsustainably inflated to almost 400,000 shares, resulting in a 15% increase in turnover compared to yesterday.
Lanexang securities
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