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13/06: Daily updates of the Lao Securities Exchange
1. Executive Summary
The Lao Securities Exchange
At the dawn of the 23rd week, defensive trading already immersed the Lao securities market. EDL-Gen successfully fended off a non-trading day with 100 shares. The poor liquidity was still capable of protecting the generation company from a price fall; however its turnover was thrown into chaos and shattered, down from LAK 387.5 million to a critical LAK 0.5 million. BCEL was able to assemble more demand to fight for its cause. Trading volume rose 60 times to 32K shares, rallying turnover to roughly LAK 262 million.
SMEs get boost with easier registration process
Business license registration for small and medium size enterprises (SMEs) has become easier as the result of good cooperation between state and private. The registration time for a business licence was 60 to 90 days, which has now fallen to just three days. The fee for business registration has also been cut. Time taken to obtain permission to export or import goods has also reduced from 2 weeks but to less than 5 days. The SME sector is the basis of the national economy and a backbone of economic growth, involving 99.8 percent of all businesses.
Xayaboury sweetcorn growers switch to cassava
A Chinese company is building a cassava powder factory in Paklai district, meaning some sweetcorn farmers in Paklai district, particularly in Kaenthao, Botaen, Thongmixay and Phieng villages, are now switching to cassava to supply the factory. Over 3,000 hectares of cassava are already being planted. Last year, provincial farmers grew more than 61,000 hectares of sweet-corn and yielded 300,000 tons; this year the agriculture section is planning for only 60,000 hectares. Farmers are presently growing about 44,000 hectares of sweet-corn, or 75% of the planned area.
2. The Lao Securities Exchange
The Lao stock market
The giant liquidity issue has migrated from the public bank to the other side of the stock board; EDL-Gen is now the generous host of this great resettlement. The electricity company felt a widespread confusion on both of its demand and supply, which are now hanging at 28K shares (-62%) and 30K shares (-66%) respectively. The company already detected signs of exhaustion on Thursday and especially Friday; today’s crash was not an overnight phenomenon. At the current stage, the most stable figures are the cheap demand of BCEL; usually there would be around 20K to 30K shares waiting for the public bank at either 8,000 Kip or 8,050 Kip. The supply side has been rigid, which was also the root of recent flat trading. Two months ago, the general public was still participating in active speculations, and now their trading frequency has reduced quickly to a tangent line; perhaps their major gains were only headaches and shallow pockets. Long term investments are essential, but active speculations are the nutrition of a healthy liquidity.
The LSX Index 1,113.06 +1.32 [+0.12%]
The slight support from BCEL has brought 12 bps to the Lao index, which is now rooting in the 1,113 points. Total trades grew more slender, from 73K shares to 32K shares (-56%), as EDL-Gen failed to generate a sufficient volume. The impact on market’s turnover was a 33% contraction, from LAK 392 million to LAK 263 million.
lanexang securities
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