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LSX IPO requirements unveiled
Any company seeking to issue securities and list on the Lao Securities Exchange (LSX) must have a minimum registered capital of 2 billion kip (US$250,000), according to an international business consultancy firm.
DFDL Mekong, a legal and tax advisory company, held a seminar on Monday to provide local and foreign investors with more knowledge of legal documents relating to securities and investment opportunities in the latest share market in Southeast Asia.
According to DFDL Mekong, companies which want to issue securities must have a good financial status without accumulated losses, be making a profit prior to any Initial Public Offering (IPO) and have financial statements certified by an external auditor.
Any company can purchase an application package for share issuance at the Securities Exchange Commission Office (SECO) for 15 million kip (US$1,875). A company must also pay a share issuance fee equivalent to 0.03 percent of the value of the shares to be issued.
The SECO will review an application package and respond in writing within 45 working days. If approved, SECO will issue a license to the applying company.
The LSX charges an initial listing fee of 0.04 percent of a company's market capitalisation (minimum two million kip and maximum 50 million kip). The review fee is 5 million kip and the annual listing fee is 0.005 percent of market capitalisation, up to a maximum of 5 million kip.
According to DFDL Mekong, foreign corporate investors may purchase no more than 10 percent of the shares of a single listed company and an individual foreign national investor may purchase no more than 1 percent of the shares of a single listed company.
Foreign investors can buy more than the stipulated number of shares of a listed company, but will not be eligible to exercise rights associated with the shares, according to SECO.
According to DFDL Mekong, the Lao government promotes investment in all sectors, business operations and areas throughout the country, except those considered detrimental to national security, the environment, public health and national culture.
The LSX opened on October 10, 2010 and began trading services in January. The market has two listed companies - BCEL and EDL Generation. Enterprise Telecommunications Laos is expected to list on the exchange at the end of this year and five more companies are slated to list in 2012.
The Lao government decided to establish the stock market in order to increase opportunities for private and state enterprises to mobilise long-term investment funds to expand business operations.
Listed companies must run transparent business operations and provide accurate tax and financial statements to authorities in accordance with the law.
vientiane times
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