Laos stock market has good future prospect

The Lao government didn't just have an eye on business profit, it also wanted to create a new tool to mobilise investment capital by opening the securities exchange, said a top stock market official.

Lao Securities Exchange Chairman and CEO Dethphouvang Moularat made the comment on Monday in response to public concerns about whether setting up the stock market had been a worthwhile investment. Only two companies have listed on the market and the trading value is very low.

The stock market's main income comes from the provision of transaction services for stock traders and the lease of offices. The low trading value has caused the public to wonder whether the several million dollars that went into the venture have been well spent.

Dethphouvang admitted that the Lao-Korean joint venture did not make a profit in its first year of business. But he said this was of no concern because the main purpose of the stock market was to make a profit in the long term, not in the short term.

The stock market expected to make a profit within the next 10 years or sooner if business boomed, he said, adding that ETL, Lao-Indochina Group and Lao World Group are expected to list this year.

A number of companies have expressed interest in listing on the stock market to mobilise investment capital but Dethphouvang was unable to give their names because they have not yet submitted an official request.

The participation of more companies in the stock market would encourage more people to buy shares, which would enable the market to make a profit sooner rather than later, he said.

The main purpose of the stock market was to give businesses another source of capital for growth, which in turn would help the government to create more jobs for Lao people.

As nearly every other country has a stock market, it was impossible for Laos to avoid doing likewise as it seeks to become internationally integrated.

Dethphouvang said the stock market had benefited Laos because in the past businesses could only obtain investment capital from banks, which could offer only short term assistance.

The stock market had an important role to play in helping the government to source investment capital for continued high GDP growth.

Laos needs US$15 billion over the next five years to secure annual GDP growth of at least eight per cent, of which 50 to 60 per cent will come from private investment.

Dethphouvang said the government had a number of measures in place to buffer the country against international stock market turbulence. These included limiting the rights of foreigners to own shares on the Lao stock market, which would prevent the rapid inflow and outflow of foreign reserves.

There are also measures to prevent investors from taking ownership of companies through the stock market. Many other countries allow investors to buy shares that give them ownership of a company.

Laos turn capitalist.

On Tuesday January 11,2011 Landlocked communist Laos launced its stock exchange and has taken a step forward to join the capitalist world.This will further spur development in its economy which otherwise being agrobased.This is also a boost to local firms to have access to vital capital for expansion.

Only two stocks are initially listed: EDL-Generation Public Company -- which was spun off in December from state-owned Electricite du Laos to handle power generation -- and state-run Banque Pour Le Commerce Exterieur Lao.

Laos, with about six million people, is one of Asia's poorest nations but has been growing at about seven percent annually in recent years, the government says.

Donors and non-governmental organisations have cautioned Laos over its growth strategy, which features large-scale foreign investment in resource sectors that potentially could have negative effects on socio-economic development.Laos is working towards membership of the World Trade Organisation.
The Dow Friday,14/01/11 is 5 market days to index/options expiry.
9:30am:--A bearish 20.0 point gap down.
Awaiting Intel and JP Morgan quarterly report.Consumer price index and retail sales rising in December.

10:30am:--Opening gap being filled.Bullish engulfing near session high.

11:30am:--Bullish session high again.Stronger than expected earnings from J.P. Morgan Chase & Co. helping the ascend.

12:30noon:--Consolidation time.Inverted bulls at session new high.

1:30pm:--Bulls are having a field day.The expectations for strong corporate earnings have lifted equities in recent weeks and spilled over today.

2:30pm:--Shooting star.JPMorgan report has offset the weaker Intel.Bank stocks are meanwhile bullish.

3:30pm:--Bearish engulfing.Profit-taking.

4:00pm:--A bullish hammer.

A bullish week with a 30 months high for the Dow.Thursday and Friday's candlestick have a lower shadow showing attempt to clean up the bulls on Wednesday.Both pair have now been seen as bullish hammer.

So the earnings season will definitely be good and expected.Somehow or rather,the investors will find a reason to sell down and lock in profit.Since the index range todate is a mere 218.35 points,the bearish stake is also very high.

There is also a smattering of data, including home sales for December and weekly jobless claims.

Meanwhile,the latest round of China's central increase in reserve requirements might give market a jolt.

Laotian state bank.

BANQUE POUR LE COMMERCE EXTERIEUR LAO is a wholly owned State Bank, established in 1975 at the same time when the Lao People's Democratic Republic was declared.
Like in most transition economies BCEL is moving forward to meet the Financial Sector Development challenges facing the Lao PDR economy supporting the growth of the tourism industry.
BCEL is Lao PDR's main International Services Bank with Correspondent Banking Arrangements with major money centre banks and 100 other banks throughout the World.
From 1976 to 1989, the BCEL operated as a specialized branch of the formerly State Bank ( Central Bank ) of the Lao PDR and was assigned the monopoly of and limited solely to international banking activities. It was also assigned the management of assistance grants and loans provided by foreign countries and international organizations to the Government of Lao PDR.
Banque pour le Commerce Exterieur Lao (BCEL): is the most prestigious state owned commercial bank in Laos with a 40% market share. BCEL ’s network covers most of Laos and almost every major companies in Laos are clients of BCEL
The Dow on Thursday is 11 market days to index/options futures expiry.
The Nikkei is 6 market days to expiry.
9:30am:--A 120.0 points bullish spike up aided by China reaffirming its loose monetary policy.
10:30am:--Early session high and the pullback to near opening.A hangman.
11:30am:--A bullish hammer of the downtrend.
12:30noon:--Holding at the bull pivot with bearish sign.
1:30pm:--A bearish doji spin.
2:30pm:--Bears hammer at the MAV support.
3:30pm:--Retracement,bullish engulfing.
4:00pm:--Bullish close.
The ISM Manufacturing Index for March came in at 59.6,exceeds the reading of 57.0
Given that the stock market will be closed tomorrow and the jobs report possesses a degree of uncertainty, many market participants were compelled to square their bets. That gave way to some selling and, in turn, an afternoon slide, which was likely exacerbated by the light trading volume ahead of the holiday weekend.

Laos open new stock market.

The ancient Lao kingdom of Lan Xang, established in the 14th Century under King FA NGUM. Laos came under the domination of Siam (Thailand) from the late 18th century until the late 19th century when it became part of French Indochina. Laos became a member of ASEAN in 1997.After a period as a French protectorate, it gained independence in 1949.

Lao People's Democratic Republic(a communist country) capital city is Vientianne.

The Scout Motto is (Triam Phrom-Prepared in Lao), and (Sois Pret, Be Prepared in French).
The highest award badge, the Erawan Scout, was red with a triple-headed white elephant on a pedestal beneath a parasol, expressing the ancient name of the country, "Land of a Million Elephants."
GEARING UP FOR THE FIRST STOCK MARKET in 2010.

Communist Laos plans to open its first stock market in 2010 with a $10 million investment from South Korea(51 percent stake) and technical help from Thailand. Shares in three state firms -- a power utility, a telecoms company and a bank -- would be allowed to trade in over-the-counter transactions in a trial run later this year.
One of the poorest countries in Asia, Laos has gradually opened its tiny economy to foreign investment since the Pathet Lao Communists adopted market reforms in the mid-1980s.
In its 2008 outlook, the Asian Development Bank forecast nearly 8 percent economic growth, led by mining and hydropower, for the country of nearly 6 million people.
The Lao trading platform would be based on Korean technology. Thai brokerages companies will also help Lao firms list in both countries.
Of the 30 companies, there are 15 state-owned companies and the rest are joint ventures between the State and private units. Many domestic private companies also expect to be listed on the stock market.

To be registered on the stock market, a company must be profitable for at least one year. It must demonstrate transparency and good management, and have a sound business plan.

The Lao Stock market will be situated on 450 Year Road in Xaythany district and will cost about 50 billion kip (5.9 million U.S. dollars) excluding the cost of information technology (IT) systems installation.
Laos has fewer than 6 million people, about 80 percent of whom work in agriculture. International development aid, mining, logging and tourism have made up the bulk of the $2.5-billion a year economy.

Korea's sixth largest Consulting representative Jisung Horizon, Mr Yang Yong Tae, and Lao Law and Consultancy Group President, Mr Khamsaeng Sayavong jointly will be providing information for foreign companies wanting to invest in Laos.
Tracking the Dow,Monday 28/12/09.(Index & Options Expiry:12 market days)
Asian Index Futures Expiry:31/12/09
9:30am:--A mild post holiday open.Bearish spin within the white candlestick.

10:30am:--Opening gap completely filled.

11:30am:--Retracement to session MAV resistance,shooting stars with hammer.U.S. retail sales increased an estimated 3.6% this holiday season.

12:30noon:--Pullback to session bear pivot,bearish engulfing.

1:30pm:--Double gap cover,bearish engulfing.

2:30pm:--Day's low with gragonfly doji.The Federal Reserve proposed amendments that would enable a term deposit facility that would offer interest-bearing term deposits to eligible institutions.Term deposits would drain reserves to support the effective implementation of monetary policy.

3:30pm:--Retracement to bear pivot,bullish harami.

4:00pm:--Bullish close above candlestick at the bull pivot.

Another 6th days of winning streak.

Trading volume is still very light as players are still on holiday.The ascending bulls is currently holding above the bull pivot and seems difficult to be toppled.It's going higher and higher with intermittent pause.