Funds raised in capital market driving Lao economy

The Lao Securities Exchange (LSX) is recognised as one of the alternative platforms for investments among enterprises that aim to raise funds in the capital market.

Chairs of the meeting pose for a group photo with Lao and foreign experts at the securities panel discussion in Vientiane to mark the 12th anniversary of LSX’s foundation.

As part of activities marking the 12th anniversary of LSX’s foundation, the Lao Securities Commission Office (LSCO) and LSX, along with the government of Luxembourg, held a securities panel discussion on Tuesday.
In a period of just 12 years, LSX has had a pivotal role in driving the Lao economy, the CEO of LSX, Mr Souphak Thinxayphone, told the meeting. LSX was officially opened on October 10, 2010 and it commenced trading on January 11, 2011.
Between 2010 and 2022, LSX has had numerous achievements, especially an increase in the number of listed companies from two in 2011 to 11 at present. The total fund mobilisation is valued 6,818 billion kip, resulting in the rise of LSX market capitalisation to 10,689 billion kip (according to figures updated on October 7), he said.
In terms of securities accounts, the number has grown from 4,122 to 17,046, and the current trading value is around 1,867 billion kip for 357 million shares, said Mr Souphak.
The LSX’s trading system has been improved and developed, and the exchange now uses new systems such as Home Trading System (HTS) and Multiple Bank-Linked, and it is seeking to develop a Mobile Trading System, he said.
At the end of the first quarter of 2022, the global economic crisis caused by the Covid-19 pandemic and the asset volatility due to the conflict between Russia and Ukraine has led to an increase in the prices of some industrial products.
The crisis is expected to further intensify the macroeconomic vulnerabilities of Laos countries in 2022, with limited fiscal and foreign currency buffers constraining the government’s ability to mitigate the economic impacts of the pandemic, according to the annual report of the LSX. 
These impacts are expected to affect the industrial field, tourism, imports and exports, and domestic investments, which mainly boost the country’s income. This results in several macro issues. Fir example, the exchange rate has weakened to reach 11,756 kip for one US dollar, accounting for 4.68 percent when compared to the previous quarter, and the inflation rate has risen significantly to 8.54 percent.
The securities panel discussion focused on two topics, the benefits of corporate bonds and the growth of funds in the capital market.
During the discussion, participants shared and exchanged their knowledge and experiences with Lao and foreign experts, who use offline and online systems, especially from LSX, Luxembourg, China, Thailand and Vietnam, in order to promote and develop the capital market in Laos.
To mark the 12th anniversary of LSX’s foundation, LSCO and LSX will organise different activities, said the Director General of LSCO, Mrs Fongchinda Sengsourivong.
These activities include the creation of the investor corner at the LSX building to display the history and growth of the exchange. LSCO has handed over computer equipment from the Luxembourg assistance project to LSX for use in mock trading in order to attract those who are interesting in share trading and want to learn using the system.  
“Importantly, on Saturday, October 22, we will organise the walking for health activity at That Luang Park, which will be led by the Deputy Prime Minister, Dr Sonexay Siphandone,” she said.

By Times Reporters
(Latest Update October 20, 2022)