January 11, 2011 / 11:57 AM / 9 years ago

UPDATE 1-Laos dips toe in global marketplace with new bourse

* Only two companies listed, more expected this year

* Opportunites seen in mining, energy, telecoms, hydropower (Adds asset manager quote)

BANGKOK, Jan 11 (Reuters) - Communist Laos launched a stock market on Tuesday, a further step by the Southeast Asian country to harness local and foreign investment to develop the economy and reduce poverty.

Trading was inevitably thin on day one of the Lao Securities Exchange (LSX) in the capital, Vientiane, with just two stocks listed — Banque Pour Le Commerce Exterieur Lao (BCEL), the country’s largest bank, and Electricite du Laos Generation Company (EDL-Gen).

Volume was just 2.14 billion kip ($265,000) according to the market’s website, which showed both share prices unchanged on the day. (www.lsx.com.la)

The market is a $20 million joint venture with Korea Exchange, operator of Asia’s fourth-largest bourse. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ For a feature on the Lao bourse click on [ID:nSGE65107Z] ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

“We are glad to start the stock exchange service with the aim of providing information to investors accurately and transparently,” the head of the LSX, Dethphouvang Moularat, said in a recorded message to investors.

“I hope investors will support the endeavours of our stock exchange,” he added.

The modest step into the capitalist marketplace shows Laos seeking to emulate neighbours China and Vietnam by embracing limited economic liberalisation while retaining tight political control.

Foreign participation on the bourse is expected to be limited at first, although the mining and hydropower sectors are attracting foreign investment and the country of 6 million people locked between China, Vietnam, Myanmar, Cambodia and Thailand has also opened up to tourism.

IPOs for the two listed companies were oversubscribed.

Thailand’s Ratchaburi Electricity Generating Holding Pcl RATC.BK said on Jan. 7 it had bought $43.4 million of stock in EDL-Gen at its IPO. [ID:nSGE706019]

Laos has a fast-growing hydropower sector, which is supplying electricity for export to energy-hungry neighbours.

Douglas Clayton, CEO of Leopard capital, an asset management firm specialising in frontier markets, was positive about the prospects for the new bourse but expected only moderate liquidity at first.

“Laos offers interesting investment opportunities in both domestic industries such as financial services and telecoms, and in export-oriented sectors like hydropower, mining, agriculture and tourism,” said Clayton, whose firm has bought a stake in EDL.

“The Lao stock market will initially be small and illiquid, but in five years should reach one or two billion dollars in market capitalisation.” ($ = 8,070 kip) (Reporting by Ambika Ahuja; Writing by Martin Petty; Editing by Jason Szep)

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