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EDL-Gen staff shares unlocked
Stock trade at the Lao Securities Exchange could get brisker now that EDL-Generation employees can sell their shares.
Company staff were given the exclusive right to purchase 5 percent of EDL-Gen's IPO shares at the end of 2010 but were required not to sell them for a period of one year, which limited their market circulation.
However, the Securities and Exchange Commission Office (SECO) eased the sale restriction on January 11, and EDL-Gen employees can now sell 50 percent of any shares they own. After January 11, 2013, the restriction will be removed altogether and staff will be able to sell all of their shares if they wish.
The SECO expects to similarly give the green light to BCEL employees - who hold 5 percent of shares in the bank - to sell their shares after January 11 this year. However, the office has not issued a notice to bank staff on the matter.
The government offered the five percent shareholding in each of the two state enterprises to employees in a bid to motivate them to take part in company development. Employees obviously stand to benefit if they help the company to make a profit.
Stock market traders say that freeing up the sale of EDL-Gen and BCEL shares will mean more stock is available for sale, which could prompt a rise in trade value on the Lao stock market.
Trade on the Lao Securities Exchange has been sluggish after an initial run of interest in the first few months after the market opened for trade on January 11, 2011. Stock market officials attribute the low trade volume to local unfamiliarity with the market as a form of investment.
In Laos, people are more likely to buy land, on which they stand to make a 100 percent return on their investment amid surging real estate development.
The economic downturn in Europe and the US has also negatively affected the Lao stock market as investors look to gold rather than share purchases in times of economic uncertainty.
The Securities and Exchange Commission allows foreigners to own 20 percent of all EDL-Gen shares, and hopes more foreigners will invest in the Lao stock market. However, the commission still prohibits foreign ownership of BCEL shares.
The top investors in the Lao securities market are Chinese, Thai, Vietnamese and Japanese, with increasing numbers of people from Western countries also buying shares.
Market officials are hoping for an upswing in share purchases with the launch of the Home Trading Service, which will enable local and foreign shareholders to buy and sell shares from home.
Officials also plan to teach Lao people about the workings of the stock market so that they feel more confident about this form of investment.
vientiane times
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