|
BCEL share price continues to plummet
The BCEL share price continued to plunge towards its lowest level ever yesterday as investor preference for EDL.Gen stocks continued.
According to a report from the Lao Securities Exchange, 3,000 BCEL shares were traded at 7,800 kip per share yesterday, the lowest price since early February.
Following the bank's initial public offering, the initial listing price on January 11 was 5,000 kip per share. Soon after, the share price reached a historical high of 15,400 kip on February 1, before steadily declining to reach 7,900 kip in early May.
Stock brokers and analysts remain silent over what the main causes of the drop in the banking stock price are. However, the falling price gives technical indicators that investors lack confidence in the bank's shares despite data indicating the bank is performing well.
The bank's announcements of an 88 billion kip profit in the first quarter of this year and an agreement by COFIBRED, a large French bank, to buy 10 percent of BCEL share s from the government at a price of 11,000 kip per share have failed to impress investors and lift the share price.
Investors continue to prefer EDL.Gen shares over the banking stock. The EDL.Gen share price is hovering around 5,100 kip per share and about 11,800 of the company's shares were traded yesterday for a value of about 60 million kip.
Stock brokers said that the low EDL.Gen share price is attracting investors seeking to make future profits once the stock price starts to rise.
The decision by investors to buy shares in the energy company may be due to reports that recent rainfalls have boosted hydropower production levels. EDL exports large amounts of power to Thailand, which is currently facing higher costs for power production due to a disruption to gas supplies.
Another factor weighing on investors' minds is the news that inflation in Laos reached 9.52 percent in June. The continued run of high inflation is also influencing people's investment decisions.
The central bank's announcement that it will control money supply at more appropriate levels and stop providing loans for public infrastructure development projects as measures to curb down the inflation rate may also be considerations for potential investors in the Lao stock market.
According to a report from the World Bank, the growth in credit provided by private banks in Laos slowed to 43 percent in December 2010, falling from 88 percent at the end of 2009.
The bank forecasts that credit growth will stabilise at 25 to 30 percent in 2011. A major source of income for commercial banks is interest earned on loans.
vientiane times
|
