The Lao Securities Exchange (LSX) and Enterprise of Telecommunications Lao (ETL) Public Company have signed an agreement to introduce a Home Trade System, which will allow investors to trade stocks electronically.
The LSX signed a Memorandum of Understanding with ETL yesterday, agreeing to develop the infrastructure necessary to operate the Home Trade System via the Internet.
Once in place, the computerised stock trading system will allow investors to post orders to buy or sell stocks at any time or place. The system is expected to be operational by the middle of this year at the latest.
The agreement was signed by LSX Chairman and CEO Dethphouvang Moularat and ETL CEO Khammouane Xomsithapanya in Vientiane yesterday, with the ceremony attended by many high ranking officials.
Dethphouvang said the introduction of the online stock trading system will encourage both local and foreign investors to invest more heavily in the Lao market. “It is faster, easier and more convenient, so I think that it will boost trading in the market.”
He said that in order to operate the online trading system, it will be necessary to put some controls and regulations in place. The LSX is working on this issue and the regulations are expected to be completed soon.
"We expect that clients will be able to use the new system by the middle of this year at the latest,” he said. “However, if we finish the regulations soon, the system will come into operation earlier, probably in April.”
Currently, investors who want to trade stocks have to write down buy and sell orders or use a fax or telephone to communicate with brokers, which is inconvenient, and not in keeping with the methods of other stock markets.
Dethphouvang said once the system becomes operational, the stock market is also investigating the possibility of launching continuous trading, which will make it possible for investors to buy and sell stocks in real time.
He said that to be able to operate the system, it was important to have a sound internet provider on board. “We believe our partnership will ensure our system is reliable,” he assured potential investors.
Khammouane said ETL has invested money to continuously develop the system and ensure quality operations. “We have tested our system and we believe that we can ensure the system operates smoothly.”
He said the company also has a backup system to account for conflict time, which will avoid problems caused by poor internet connections.
"As ETL is preparing to list on the stock exchange, we promise to do our best and believe we can ensure a fast and reliable service that operates well.”
Khammouane said ETL also has a special discount and promotional offer for clients who take up the internet based system to access the trading market. ETL is now a public company and will announce a public share offering soon.
ETL was established in 2000. It is a state-owned enterprise which means all of its operations are supervised by the National Authority of Posts and Telecommunications. ETL has full rights to provide both domestic and international telecommunication services under the laws of Laos.
The LSX is a cooperative venture between the Lao government and a Korean company. The Lao government has a 51 per cent share and the Korean company owns the remaining 49 per cent. Its primary market opened on Oct 10, 2010, and the secondary market opened for trading on Jan 11, 2011.
At present two former state enterprises, EDL Generation (EDL-Gen) and BCEL are listed on the stock exchange. Their shares are sold through two brokers - Lane Xang Securities Public Company and BCEL- KT Securities Limited.
