Laos Bourse to Open Bond Trading, Triple New Stocks after posting a loss every year since it opened in 2011

Laos Bourse to Open Bond Trading, Triple New Stocks to Halt Loss

Lao Securities Exchange will start trading bonds and triple the number of listed companies next year to raise revenue after posting a loss every year since it opened in 2011.

The exchange, the second-smallest by market capitalization among 84 global bourses tracked by Bloomberg, after Swaziland, plans to begin government bond trading for the first time early next year, according to Chief Executive Officer Dethphouvang Moularat. It will also expand the number of listed stocks to six, from two, he said. Laos World Co. Ltd., a trade exhibition operator, and a state-controlled cement maker are among companies to join the Laos Composite Index. (LSXC)“The exchange will be more aggressive in adding new products to halt a widening loss,” Dethphouvang said in an interview in Bangkok yesterday, declining to provide specific figures. “The bourse’s goal has changed from helping the country’s economic development at the start to financial independence now.”

The country of 6.5 million people has about $640 million of outstanding local-currency government bonds and raised 1.5 billion baht ($46.7 million) in May selling its first baht-denominated bonds to Thai investors. The bourse and regulator have streamlined the listing approval process and been more aggressive in persuading domestic companies to list, according to Dethphouvang. Companies can now apply for the listing to either the stock exchange or Securities & Exchange Commission, he said.

Two Stocks

The exchange has two listed companies, state-controlled lender Banque Pour Le Commerce Exterieur du Lao Pcl and power producer EDL-Generation Pcl, with a combined market capitalization of $1.14 billion. That compares with the $41.8 billion market in neighboring Vietnam, where 688 stocks are listed on the Ho Chi Minh Stock Exchange (VNINDEX) and Hanoi Stock Exchange.

The Laos Composite Index has gained 8.9 percent this year, compared with an 11 percent slide in the MSCI Southeast Asia Index, according to a data compiled by Bloomberg.

Laos, Southeast Asia’s smallest economy, needs structural transformation and economic diversification to create jobs for a young population and sustain growth, according to the Manila-based Asian Development Bank. Gross domestic product will expand 7.7 percent this year and next, supported by investments in hydropower, mining and construction of hotels, offices and houses, according to the regional lender.

To contact the reporter on this story: Anuchit Nguyen in Bangkok at anguyen@bloomberg.net

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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