Lao Securities Exchange will start trading bonds and triple the number of listed companies next year to raise revenue after posting a loss every year since it opened in 2011.
The exchange, the second-smallest by market capitalization among 84 global bourses tracked by Bloomberg, after Swaziland, plans to begin government bond trading for the first time early next year, according to Chief Executive Officer Dethphouvang Moularat. It will also expand the number of listed stocks to six, from two, he said. Laos World Co. Ltd., a trade exhibition operator, and a state-controlled cement maker are among companies to join the Laos Composite Index.
“The exchange will be more aggressive in adding new products to halt a widening loss,” Dethphouvang said in an interview in Bangkok yesterday, declining to provide specific figures. “The bourse’s goal has changed from helping the country’s economic development at the start to financial independence now.”
The country of 6.5 million people has about $640 million of outstanding local-currency government bonds and raised 1.5 billion baht ($46.7 million) in May selling its first baht-denominated bonds to Thai investors. The bourse and regulator have streamlined the listing approval process and been more aggressive in persuading domestic companies to list, according to Dethphouvang. Companies can now apply for the listing to either the stock exchange or Securities & Exchange Commission, he said.
The exchange has two listed companies, state-controlled lender Banque Pour Le Commerce Exterieur du Lao Pcl and power producer EDL-Generation Pcl, with a combined market capitalization of $1.14 billion. That compares with the $41.8 billion market in neighboring Vietnam, where 688 stocks are listed on the Ho Chi Minh Stock Exchange and Hanoi Stock Exchange.
The Laos Composite Index has gained 8.9 percent this year, compared with an 11 percent slide in the MSCI Southeast Asia Index, according to a data compiled by Bloomberg.
Laos, Southeast Asia’s smallest economy, needs structural transformation and economic diversification to create jobs for a young population and sustain growth, according to the Manila-based Asian Development Bank. Gross domestic product will expand 7.7 percent this year and next, supported by investments in hydropower, mining and construction of hotels, offices and houses, according to the regional lender.