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19/04: Daily updates of the Lao Securities Exchange
1. Executive Summary
The Lao Securities Exchange: The Lao New Year was already over, but its jetlag effect is still disrupting the Lao Securities Exchange. EDL-Gen started to bruise the 6,600 Kip; and the consequence of its inability to let go is the deteriorating volume, down 24 percent to roughly 196,500 shares. Hang-over sign is written all over BCEL; its price staggered from the 8,500 Kip in the first session to only 8,350 Kip in the second. However, the glass is being refilled again: trading volume surged from less than 9000 shares to 53,000 shares.
- No timeframe for WTO membership: Laos has to improve a number of laws and trade procedures to meet international standards to facilitate investment, business operations, and imports and exports, as these are among the main requirements for WTO membership. Although the government has made good progress with its plan for membership in the WTO, it has been unable to set a timeframe for completion of the process. The Ministry of Industry and Commerce needed cooperation from a number of other sectors in its preparations for membership.
- Minimum wage increase unlikely to affect inflation: The Lao Federation of Trade Unions has stated the proposed wage rise is aimed at improving the livelihoods of workers in response to rising inflation. Some businesses and economists have voiced concern that raising the minimum wage could lead to higher inflation as it would increase production costs and businesses would have to sell their products at higher prices. However ADB Laos believes that a rise in the minimum wage would not have much impact on inflation rates.
2. The Lao Securities Exchange
The Lao stock market
Last week was not the highlight of BCEL. The combined volume was barely 22,000 shares, not even half of the today’s trades; but investors were packing for their holiday, so not much could be done. BCEL is pulling its daily trades above the 3-week average, and this could be short term significance. Furthermore, the level of both demands and supplies are rising in tandem, providing a sustainable pulley system for this stock to get back up. EDL-Gen is not exactly exploring new places; its price kept circling around a few familiar points. The supportive factor is that a certain amount of trades always keeps this stock afloat. However, the amounts of demands and supplies are decreasing over time, but not yet to the alarming level.
The LSX Index 1,328.14 -6.60 [-0.49%]
Total market volume barely reached 250,000 shares, which is lower than the average daily trading (two months trail), but not as bad as it seemed. A small 49 bps shard broke out of the Lao Composite Index, but that was just a slight commotion, not a sign of slowing down. Total market turnover reach 1,741 million Kip, 2 percent less than the previous figure.
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