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20 companies eye Lao market listing
Publication Date : 05-09-2013
Twenty companies intend to join the Lao Securities Exchange in the near future after they streamline their corporate governance and undertake the retro-auditing required to list on the market.
Corporate governance and auditing procedures are the common issues that need to be addressed by these 20 companies aiming to join the market, based on a survey conducted by the Lao Securities Exchange recently.
Lao Securities Exchange Chairman and CEO, Dethphouvang Moularat, told Vientiane Times on Wednesday the LSX had conducted an initial survey of 1,087 companies and found that 38 had the potential to meet the exchange's requirements.
The LSX then conducted a more detailed survey of these 38 companies and found that only 20 were interested in listing on the market.
But these companies are challenged in terms of corporate governance and retro-auditing, so the LSX will continue to help them fulfil the requirements for listing.
Dethphouvang said two or three companies expect to list on the Lao Securities Exchange at some point next year. Lao World Company expects to join later this year while PetroTrade have proposed coming on board next year.
At present only two companies are listed on the Lao stock market, so the inclusion of more firms would perk up trading, enabling the LSX to raise more revenue and realise the benefits of its operations.
The existing listed companies are Banque pour le Commerce Exterieur du Lao Public and power provider EDL-Generation Public Company, with a combined market capitalisation of US$1.6 billion.
According to a recent Bangkok Post report, the Lao Securities Exchange plans to begin government bond trading for the first time early next year.
The country of 6.5 million people has about US$640 million of outstanding local-currency government bonds and raised 1.5 billion baht (US$46.7 million) in May selling its first baht- denominated bonds to Thai investors.
Although Laos is one of Southeast Asia's smallest economies, it has continued to grow at a stable pace in recent years, achieving growth of at least 8 per cent, driven mainly by the investment sector.
The Lao Securities Exchange opened for trading on January 11, 2011. The LSX was established with the aim of attracting the necessary capital to develop the nation, sourcing capital for companies in the long term, and promoting the integrity of the Lao financial market.
The government deemed it necessary to establish the stock market to raise the capital needed to sustainably develop the manufacturing and services industries.
Laos needs greater access to capital to boost economic growth and create jobs, in order to graduate from least developed country status by 2020.
From 2011 to 2015, the government plans to source investment funding of about US$15 billion with the aim of securing economic growth of at least 8 per cent per year.