How to Invest in Laos’ Stock Market

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Laos beat its larger neighbour Cambodia to the market by launching its stock exchange with two companies at the beginning of 2011, over a year before Cambodia. The Laos Securities Exchange (LSX) has also been able to maintain its lead by launching new IPOs at the end of 2013 and 2014, resulting in a total of four listed companies currently.

Despite this activity, the LSX has been very dull with range-bound trading since 2013. As of 5 June 2015, the LSX Index sits at 1373.55, up just over 37% in four and a half years but down 1.7% in 2015:

LSXIndex(Click to enlarge)

Market Statistics

Ticker Price Shares Market Cap (LAK, mio) Market Cap (USD, mio) Avg Volume (Daily, 1 mth) Avg Turnover (USD, Dly, 1 mth)
BCEL 6300        136,577,600      860,439 $           106              24,660 $               18,925
EDL-Gen 7000    1,226,216,765    8,583,517 $       1,054              41,539 $               19,744
LWPC 8000          39,560,909      316,487 $             39                  239 $               20,684
PTL 3800        235,000,000      893,000 $           110                5,180 $               21,677
Total    9,793,005 $       1,202              71,619 $               81,030

The Laos Securities Exchange has a market cap of just over $1.2 billion USD spread across four different companies. Trading is dominated in the original two companies, BCEL and EDL-Gen, and average daily turnover over the past month amounted to just over $80,000 USD a day. The market is in a slow period, and you can see that volumes have spiked well beyond those levels before in the chart above. Overall, the market is small but quite impressive for one of the smaller and less developed countries in Southeast Asia.

Companies

Ticker Company Name Industry IPO Year IPO Price (LAK) Gain Since IPO
BCEL Banque Pour Le Commerce Exterieur Lao Banking 2011 5500 15%
EDL-Gen EDL Generation Utilities 2011 4300 63%
LWPC Lao World Property, Conglomerate 2013 10200 -22%
PTL Petroleum Trading Lao Petroleum 2014 4000 -5%

The four companies listed on the LSX are spread across different industries, but the last two to IPO have performed poorly and are below their opening IPO offer price. The LSX Index is a market weighted index, so its returns have also been distorted by the outsized weight to EDL-Gen, which is worth almost 88% of the total market by itself.

Market Regulations

  • Trading Hours: 08:30 – 11:30, Mon-Fri
  • Minimum Trading Units: 1 share
  • No short-selling

How to Invest in the Laos Stock Market

Foreigners are permitted to invest on the Laos Securities Exchange but are limited to owning a capped percentage of total shares for both BCEL and EDL-Gen. The full steps to opening an account can be found on the exchange’s website here, but we have listed out the current steps here:

1. Select a Brokerage Firm

First pick between one of the three brokerage firms in Laos to use: BCEL-KT Securities Company, Lao-China Securities Company, and Lanexang Securities Company. Currently, BCEL-KT’s website redirects to a tourism website and Lao-China seems to be lacking a website altogether, so the default pick will be Lanexang Securities Company.

Their website can be found here (and is confusingly one letter different than the official LSX website), and was the first brokerage firm to launch in Laos. Their website is updated consistently with daily and weekly reports, and seems all around friendly to foreign investors.

2. Open a bank and securities account

Investors to Laos must open a bank account alongside a securities account. Fortunately, the brokerage firm helps you with both and will open a bank account with their respective partners. In Lanexang Securities’ case, the bank account will be opened with Lao Development Bank, which owns a stake in Lanexang Securities. The securities account will of course be opened at the brokerage firm.

To accomplish this, these are the forms and IDs you need to submit:

  • Copy of ID card or Passport
  • Bank Account opening form
  • Bank account statement (taken from your newly opened bank account)
  • Broker appointment agreement
  • Power of attorney for fund transfer
  • Power of attorney for transactions
  • Foreign investment ID registration form
  • Representative Application

All these forms can be gotten from the brokerage firm.

3. Receive Investment ID and Certificate

After all the forms are submitted and processed, the LSX Market Operation Department will issue an Investment ID and Certificate to you. You can then begin trading through your brokerage firm.

 

 

 

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