Laos is set to open a stock market today, hoping it will attract capital to its largest enterprises and thus boost the economy of one of the world's poorest nations.

The Lao Securities Exchange, headquartered in the capital of Vientiane, will debut with shares offered by just two state-owned enterprises - Electricite du Laos Generation Company (EDL), the country's major energy enterprise, and the Banque Pour Le Commerce Exterieur Lao, official Lao media said overnight.

Foreign participation will be limited.

South Korea's Korea Exchange is investing $US9.8 million ($9.88 million), or 49 per cent of the venture, most of it for technology systems and training, according to the Seoul-based stock market operator.

The Bank of Laos, the country's central bank, is investing $US10.2 million ($10.28 million), or 51 per cent.

Neighbouring Thailand also offered assistance.

"There's a twofold reason. The exchange will allow an alternate source of capital other than banks and allow public participation in the growth of the economy," said Lorraine Tan, director of equities research at Standard & Poor's in Singapore.

"A broad capital market will certainly help economic development."

But she said that it would take some time for foreign equity to flow in. "You just can't do that by opening up a stock market," Ms Tan said.

The Vientiane Times, a state-run newspaper, quoted a securities executive as saying that foreign individuals will be able to buy a maximum of three per cent of shares issued by EDL while foreign companies and institutions will be able to purchase up to 10 per cent.
 
Hinphet Chanthalansy, deputy director of BCEL-KT Securities, said a number of foreign enterprises, especially  Thai power companies, have expressed interest in EDL.

He said shares in the company were oversubscribed by foreign investors during the recent initial public offering.

The newspaper said exchange officials say foreign ownership had to be limited to keep the inflow and outflow of foreign currency stable, one of the main drivers behind a steady and strong Lao kip.

Foreign investors trading on the Lao exchange must use Lao kip for all transactions.

The Lao Government has committed to keeping the value of the kip within a 5 per cent range this year.

The kip has increased in value against the US dollar in recent years but depreciated against the Thai baht.

The KRX said it is also working to establish the Cambodia Securities Exchange expected to open in July and helped set up the Ho Chi Minh Stock Exchange in Vietnam.

I don't see why they can't.

Admin Saovaluck wrote on 11^th Jan, 2011 at 3:44am:

Could point me to their website please....

I don't know if there is a Lao stock website.

The article says that "foreign participation will be limited."

Last time I read about 4,000 Kip = $.50 per share. Also depend on what stock, and company.

Lao stock is up  EDL-Generation is up 4,700 Kip per share from 4,700. BCEL close at 8,000 kip. Up from 5,000 Kip. If you have 1,000 share, up 3000 Kip per share. You can make 3 million kip in one day or you can lose it all. If company go bankrupt. Lao hydropower will not go out of business anytime soon.

BorLeumBanGerd, I'm sure that the public will buy some shares, they don't open a stock market just for the sake of it. They've mentioned that some companies are already keen in investing their money.

They only just got started, so give them time to establish themselves. When that happens, then maybe they will allow more foreign participation in the future.

It was looking for a website I could use to track movements on the Lao Stock Exchange that led me to this Lao Pride website.  There doesn't seem to be a LSX website or any other place posting current prices.  From what I've found out, it's only possible to buy shares by visiting one of the two agencies allowed to sell shares.  One is KT-BCEL in Vientiane.  It's not possible to trade Lao shares online yet.

Are the daily share prices quoted in the Vientiane Times or the Lao language newspapers?