Daily Reportfiles123.up.seesaa.net/image/0311201120-20LSX20DR20-20Week20… · Laos The Capital Market Issue Name Current Price Change (Kip) Change (%) 52-week High Low BCEL 9,250

1 | D a i l y U p d a t e L a n e x a n g S e c u r i t i e s P u b l i c C o m p a n y

Daily Report

LaosThe Capital Market

Daily updates of the Lao Securities Exchange Mar 11th 2011

Executive Summary The Lao Securities Exchange: EDL-Gen replicated the yesterday sessions with

only one exception: the 77% increase in trades. EDL-Gen paved its way to the

6,750 Kip per share then slid back to where it started: 6,700 Kip per share.

Without a guiding light, BCEL just drifted further to 9,250 Kip per share,

leaving only 40% of the yesterday turnover: 117 million Kip.

A total of 1.11 million shares were traded during the 9th

week of the LSX, of

which 93% of the transactions belonged to EDL-Gen. Total market turnover

over the week reached 7.73 billion Kip (~0.96 mil. US$), equivalent to a 39%

downswing compared to last week.

Laos exceeds five-year ODA target: The Lao government has been the

recipient of official development assistance (ODA) worth US$2.442 billion

over the past five years (2006-2010), exceeding the five-year target set at

US$1.75 billion. The ODA was provided by some 52 different donors. The

achievement in mobilizing aid was attributed to several reasons including the

fact that the government has attached great importance to aid mobilization

and effectiveness while continuing to improve coordination mechanisms

among stakeholders.

Government considers fuel subsidy: The Lao government may provide fuel

subsidies if the price of oil in world markets continues to rise. The ministry

had already issued a proposal to the cabinet considering fuel subsidies as one

way to stabilize the price of fuel. Rising fuel prices have the government

considering a subsidy. The government would expect to lose more than 70

billion kip a month through fuel subsidies.

Exchange Rates: 11/03/2011

Bid Change Ask Change USD 8,031.00 1.00 8,071.00 1.00 CAD 8,115.00 -47.00 8,279.00 -48.00 THB 264.95 -0.75 266.27 -0.75 EUR 11,084.00 -84.00 11,140.00 -85.00 GBP 12,706.00 -108.00 12,963.00 -112.00 CNY 1,169.00 0.00 1,192.00 0.00 JPY 95.44 -0.07 97.37 -0.07 VND 0.33 0.00 0.34 0.00

Exchange rates, quoted for the Lao Kip, by the Lao Development Bank

In this issue Page 1 – Executive Summary Page 2 – The Lao Securities Exchanges Page 3 – Lao Economy Page 5 – Stock Board Page 6 – Appendix Lanexang Securities Public Company

5th Floor, LSX Building, Ban Phonthan Neua, Saysettha District, Vientiane Capital, The Lao P.D.R. Tel: (+856)-21 265 468 Fax: (+856)-21 265 466 (Front Office) (+856)-21 265 465 (Back Office) Web: www.lxs.com.la Email: [email protected] [email protected]

Contact: Vo Ngoc Huy Deputy General Director Email: [email protected] [email protected] Le Trung Hieu Acting Manager – Research Department Email: [email protected]


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Issue Name Current Price Change (Kip) Change (%) 52-week

High Low BCEL 9,250 450 3.77 15,500 8,000 EDL-Gen 6,700 - - 8,850 4,550

The Lao Securities Exchange

The Lao stock market

BCEL was just drowning in the anxiety of investors. This stock has lost 13% of its market value since the beginning

of the week. There were simply so demands to power up the BCEL ‘submarine.’ Traders just want to get out

before the ship sinks too deep. However, BCEL is getting back to the level of the first trading day, presenting a

golden opportunity for those who did not participate in the IPO auction. Apparently, investors prefer to invest in

EDL-Gen for its better liquidity, signaling a good chance that this stock should be able to sustain its current

market price. EDL-Gen enjoyed 93% increase in demands despite of the unchanged price. However, large supplies

are still waiting EDL-Gen at the 6,750 and 6,800 Kip per share.

The LSX Index 1,368.68 11.88 [0.86%]

The tottery Lao Composite Index inclined toward the BCEL side as this leg can no longer support even its own

weight. The current benchmark is now hinging around the 1,368 index points, equivalent to a loss of 86 basis

points compared to yesterday. The market was 53% more liquid as total trades reached 260 thousand shares,

pulling the market turnover up by 45% to 1.7 billion Kip.

900

1,100

1,300

1,500

1,700

1,900

2,100

-

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1,000,000

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The Lao Economy

Macro-Economy

Laos exceeds five-year ODA target

The Lao government has been the recipient of official development assistance (ODA) worth US$2.442 billion

over the past five years (2006-2010), exceeding the five-year target set at US$1.75 billion. The ODA was

provided by some 52 different donors, an official from the Ministry of Planning and Investment's International

Cooperation Department, said Mr Sysomphorn Phetdaoheuang. The achievement in mobilizing aid was

attributed to several reasons including the fact that the government has attached great importance to aid

mobilization and effectiveness while continuing to improve coordination mechanisms among stakeholders. The

total of US$2.442 billion means Laos has received more than US$488 million per year on average over the past

five years.

However, the government needs to work harder to reach ODA targets of US$700 to US$800 million per year on

average over the next five years (2011-2015) to ensure economic growth of at least eight percent annually. To

achieve this ambition, the government needs to ensure transparency and guarantee effective use of aid so

donors are more consistent and active in aid provision. In this regard, the relevant government agencies met with

development partners in Vientiane in January to formally announce and launch a 2011 survey to assess aid

effectiveness. This year's survey, the third of its kind, comes under the Paris Declaration (PD) on Aid

Effectiveness.

The first survey was conducted in 2006 and the second in 2008. Officials will finalize the PD country report this

month based on the findings of the survey, which will be later submitted to the secretariat of the Organization

for Economic Cooperation and Development/ Development Assistance Committee (OECD/DAC). The OECD/DAC

is responsible for two major collections of data covering the volume, origin and types of aid and resources

flowing to over 150 developing countries and territories. The survey findings will play an important role in the

assessment of aid effectiveness in Laos. The findings will also be an important input for the upcoming 4th High-

Level Forum on aid effectiveness, which will be held in November this year in Busan, South Korea. Mr

Sysomphorn noted that the survey findings will be vital in mobilizing greater assistance to realize the

government's 7th five-year National Socio-economic Development Plan (2011-2015) and Millennium

Development Goals by 20 15. “If the survey proves that ODA is effectively used, donors will be confident in

providing assistance,” he said.

The Vientiane Times

Stable kip, low inflation are bank's highlights

The governor of the Bank of the Lao PDR believes the bank has successfully played its role over the past five

years, highlighting the stability of the kip and single digit inflation as noteworthy achievements. Mr Phouphet

Kham-phounvong spoke to media yesterday at the Bank of the Lao PDR to review the bank's activities for the

2006-2010 periods. “From 2006 to now, we have maintained the stability of the kip and the inflation rate is low,

with the one digit inflation rate lower than the GDP growth rate. These were among the government's plans set


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for the last five years and we believe we've achieved them.” Mr Phouphet said the kip was worth about 9,000 kip

to the US dollar in 2006 and is now fetching 8,000 kip to the dollar. Inflation has averaged around 6 percent a

year over the five years, while GDP has grown by around 7 percent. “It's a good sign that we've kept the inflation

rate lower than GDP growth and we will strive to maintain this.”

The Vientiane Times


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The Lao Economy

Business Sectors

Government considers fuel subsidy The government may subsidies fuel in Laos if the price of oil in world markets continues to rise, according to senior officials from the Ministry of Industry and Commerce. The officials, who manage fuel prices in Laos, said yesterday the ministry had already issued a proposal to the cabinet considering fuel subsidies as one way to stabilize the price of fuel. Rising fuel prices have the government considering a subsidy. “The government would expect to lose more than 70 billion kip a month through fuel subsidies,” said one of the senior officials who asked not to be named. The ministry proposed the subsidy as costs at the petrol pump continue to rise due to increasing oil prices in global markets. In Vientiane, the current price for premium petrol is 11,040 kip per liter, with regular petrol costing 9,940 kip per liter, and diesel 8,780 kip per liter. In the provinces of Khammuan, Savannakhet, Champassak, Bokeo and Xieng Khuang, premium petrol costs between 11,060 and 11,170 kip per liter, regular petrol 9,990 to 10,220 kip per liter, and diesel 8,820 to 9,090 kip per liter. Fuel prices are likely to keep rising amid fears that unrest in the Middle East will disrupt global oil supplies. Some analysts are predicting oil could climb as high as US$200 per barrel this year. The Lao government subsidized fuel at the end of 2008 when the global oil price reached a historical high of US$140 per barrel, with the subsidy keeping the price in the domestic market below 13,000 kip per liter. The government maintained its high reference price for imported fuel into early 2009 when the price of oil dropped to as low as US$50 per barrel, not wanting to lose the revenue earned from taxes. According to the Lao Petroleum and Gas Association, fuel consumption in Laos is expected to rise to more than 750 million liters this year. Consumption increases by an average of 7 to 10 percent each year. About 45 to 50 percent of all fuel imported is used in Vientiane and Vientiane province. Food prices in particular have already increased as fuel costs rise and there is concern that increasing fuel prices could lead to even greater rises in food prices, causing inflation to soar and squeezing already tight household budgets. The World Bank has expressed concerns that increasing prices of fuel in the world market could lead to higher food prices around the world since oil is essential for food production and transportation. ASEAN member countries have already put measures in place to prevent rapid increases in food prices, particularly rice, which is the staple grain in South East Asia. A number of countries, including Thailand, have already introduced fuel subsidies to curb inflation.

The Vientiane Times Russian firm becomes majority owner of Tigo

A major Russian mobile operator has become a new majority shareholder in Millicom Lao after purchasing company ownership from Millicom International. VimpelCom Ltd, one of the largest Russian telecom companies, and Millicom International Cellular SA announced on Wednesday they had completed the deal to purchase Millicom Lao after a delay of more than 16 months. According to a press release from VimpelCom Ltd, the company has already paid US$65 million for equity and US$23 million for the repayment of debt, repayment of shareholder loans and intra-group indebtedness to acquire a 78 percent share in Millicom Lao. The Lao government still holds the remaining 22 percent in the joint venture despite the purchasing deal between the two telecommunication companies. The agreement for VimpelCom Ltd to acquire Millicom Lao, which provides mobile phone services under the Tigo brand name in Laos, was signed on September 16, 2009, but completion of


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the transaction was delayed until it was endorsed by the Lao government, according to the press release. Laos is the third country in Southeast Asia where Vimpelcom now has a presence. In 2009, the mobile operator acquired a 90 percent stake in the Cambodian company Sotelcom and in July it began operating in Vietnam. According to VimpelCom Ltd, the company consists of telecommunications operators providing voice and data services through a range of wireless, fixed and broadband technologies. The VimpelCom Ltd group is headquartered in Amsterdam and has operations in Russia, Ukraine, Kazakhstan, Uzbekistan, Tajikstan, Georgia, Armenia, Kyrgyzstan, Vietnam and Cambodia, covering territory with a total population of about 345 million. VimpelCom Ltd. operating companies provide services under the “Beeline” and “Kyivstar” brands. VimpelCom Ltd.'s ADSs are listed on the New York Stock Exchange under the symbol “VIP”. Millicom Lao was established as a joint venture between Millicom International Cellular SA and the government of Laos. Millicom Lao commenced commercial operations of its GSM 900/1800 mobile network in April 2003. Within two years Millicom Lao completed its national network rollout covering all major cities. Currently Millicom Lao is one of the leading mobile operators in the country with over 500,000 subscribers as of the end of February 2011 and market share of approximately 25 percent. Millicom Lao holds a nationwide GSM 900/1800 license.

The Vientiane Times Egg production down as temperatures soar

Egg production at farms throughout Vientiane has decreased 5-10 percent due to higher temperatures this month. In the cold season, Vientiane farmers can produce over 400,000 eggs per day for supply to the capital and provinces, but this figure has dropped in the past month, a Vientiane egg producer, Mr Phouvong Phongphasai, told Vientiane Times on Tuesday. He said higher temperatures are the main reason for the decline as chickens lose their appetite and eat less. “Chickens at my farm lay about 400 trays of eggs per day in cold weather, but have recently only produced between 340 and 350 trays per day,” Mr Phouvong said. In addition, he said 500 sacks of chicken feed would normally suffice for 10 days, but have this month lasted 12-13 days. With production down in Vientiane, markets in various provinces are running short of eggs, he said. However, traders continue to send eggs to the provinces at higher prices due to increased transport costs. Eggs are now selling for 24,000-25,000 kip per 32-egg tray at farms, but traders are selling for more. Traders mostly sell eggs in Khammuan, Savannakhet and Champassak provinces and sometimes in Xieng Khuang and Luang Prabang. The lack of supply in Thailand has also impacted some provinces as they are unable to import eggs. The producer explained that there are serious fears that the rising price of animal feed could put some farms out of business, after chicken feed jumped from 400 baht to 410 baht per kg. Mr Phouvong said the price of chicks from Thailand may also increase due to high demand. About 70 percent of Lao egg producers buy young chickens from Thailand to breed, while all buy their chicken feed from the neighboring country. However, egg producers can breathe easier now that the price of eggs has risen after months of struggling to make a living in the face of strong competition from cheaper illegal imports that flooded the market. In the middle of last year Vientiane egg producers almost went broke due to low market prices caused by illegally imported eggs, he explained. Many farmers in Vientiane lost money because their eggs spoiled or hatched before they could be sold. Vientiane has about 150 chicken farms with more than 600,000 hens. The people of Vientiane consume about 250,000 eggs per day.

The Vientiane Times Farmers expand cassava plantations

Cassava farmers in Pakngum district, Vientiane, are rushing to increase the size of their farms to boost supply to


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the local tapioca factory whose demand for the crop is seemingly unlimited. The number of cassava plantations

in the district increased from 500 hectares in 2008 to 800 the following year, according to a report from the

district Agriculture and Forestry Office. “The plantations will cover an estimated 2,000 hectares this year, an

increase from 1,500 hectares last year,” office chief Mr Boungnang Souphan-amath told media yesterday.

The expansion aims to increase the amount of cassava powder produced by the district Lao Indochina Group Co

Ltd (LIG) tapioca factory, which sources its raw materials from local farmers. The plantations do not use chemical

fertilizers. The yield will supply powder to the local and export markets. Currently about 80 percent of farmers in

the district are LIG members. “We expect almost 100 percent of local farmers to be members soon,” Mr

Boungnang said. LIG's tapioca factory pays farmers 500,000 kip per ton of cassava and offers a steady and reliable

purchase arrangement. The prices vary depending on fluctuations in the global market. The factory produces

powder mainly for export to China and the local market.

The Vientiane Times


Daily Report


Stock Boards Second session: 10:00 – 11:30, Closing

BCEL

EDL-GEN


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Appendix

Securities Charts

EDL-Gen

BCEL

4,000

5,000

6,000

7,000

8,000

9,000

10,000

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Appendix

Daily Market Data

LSX Index Date Current Index

Change (Points)

Change (%)

Trading Vol. (Share)

Trading Value (Kip)

High

Low

2011/03/11 1,368.68 11.88 0.86 259,468 1,775,821,350 1,378.39 1,368.68

2011/03/10 1,380.55 13.20 0.95 169,187 1,224,096,100 1,396.86 1,380.55

2011/03/09 1,393.75 06.23 0.45 593,991 4,031,934,200 1,399.03 1,393.75

2011/03/07 1,387.52 05.28 0.38 94,814 696,883,400 1,395.91 1,387.52

2011/03/04 1,392.80 - 0.00 1,172,035 7,778,682,600 1,392.80 1,392.80

EDL-Gen Date Closing Price

Change (Kip)


Trading Value (Kip)

Market Cap. (mil. Kip)

High Low

2011/03/11 6,700 - 246,815 1,658,401,250 5,819,600 6,750 6,700

2011/03/10 6,700 - 139,939 939,012,000 5,819,600 6,750 6,700

2011/03/09 6,700 100 579,188 3,880,559,600 5,819,600 6,700 6,700

2011/03/07 6,600 - 77,230 510,493,000 5,732,741 6,650 6,600

2011/03/04 6,600 - 1,161,737 7,667,464,200 5,732,741 6,600 6,600

BCEL Date Closing Price

Change (Kip)


Trading Value (Kip)

Market Cap. (mil. Kip)

High Low

2011/03/11 9,250 450 12,653 117,420,100 1,263,343 9,300 9,250

2011/03/10 9,700 500 29,248 285,084,100 1,324,803 10,000 9,700

2011/03/09 10,200 400 14,803 151,374,600 1,393,092 10,400 10,200

2011/03/07 10,600 200 17,584 186,390,400 1,447,723 10,600 10,600

2011/03/04 10,800 - 10,298 111,218,400 1,475,038 10,800 10,800


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Appendix

Weekly Market Data

LSX Index Week Start Date

Closing Index

Index Change

(%)

Total Trading Volume (Shares)

Total Turnover (Bil. Kip)

Total Turnover

(Mil. $US)

Weekly High

Weekly Low

9 2011/03/07 1,368.68 1.73 1,117,460 7.73 0.96 1,399.03 1,368.68

8 2011/02/28 1,392.80 3.04 1,752,646 12.60 1.57 1,472.18 1,392.80

7 2011/02/21 1,436.45 6.97 1,110,653 8.87 1.11 1,530.93 1,436.45

6 2011/02/14 1,544.13 1.74 2,576,419 22.10 2.75 1,646.05 1,544.13

5 2011/02/07 1,571.47 7.22 3,252,951 26.73 3.33 1,610.79 1,571.47

EDL-Gen Week Start Date

Closing Price

Price Change

(%)



Total Turnover

(Mil. $US)

Weekly High

Weekly Low

9 2011/03/07 6,700 1.52 1,043,172 6.99 0.87 6,750 6,600

8 2011/02/28 6,600 2.22 1,542,198 10.25 1.28 6,900 6,600

7 2011/02/21 6,750 6.90 823,425 5.56 0.69 7,250 6,550

6 2011/02/14 7,250 1.36 1,985,112 14.57 1.81 7,700 7,000

5 2011/02/07 7,350 8.13 2,484,185 17.41 2.17 7,600 6,600

BCEL Week Start Date

Closing Price

Price Change

(%)



Total Turnover

(Mil. $US)

Weekly High

Weekly Low

9 2011/03/07 9,250 14.35 74,288 0.74 0.09 10,600 9,250

8 2011/02/28 10,800 06.09 210,448 2.35 0.29 11,900 10,800

7 2011/02/21 11,500 07.26 287,228 3.31 0.41 11,900 10,900

6 2011/02/14 12,400 03.13 591,307 7.52 0.94 13,700 12,000

5 2011/02/07 12,800 03.76 768,766 9.33 1.16 12,800 11,500


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Lanexang Securities Public Company Head office 5th Floor, LSX Building, Ban Phonthan Neua,

Saysettha District, Vientiane Capital,

The Lao P.D.R

Tel:(+856)-21 265 468

Fax:(+856)-21 265 466

www.lxs.com.la

A joint venture between:

Sacombank Securities Company Head office 278 Nam Ky Khoi Nghia street, District 3

Ho Chi Minh City

Vietnam

Tel: +84 (8) 6268 6868

Fax: +84 (8) 6255 5957

www.sbsc.com.vn

Lao Development Bank Head office 013 Souphanouvong Rd, Sihom Village

Chanthabuly Dist, Vientiane Capital,

The Lao P.D.R

Tel: (+856)-21 213 300

Fax: (+856)-21 241 275

www.ldb.org.la

Disclaimers

This document was prepared by LXS. Its subsidiaries, branches, and affiliates are also referred to as LXS. The information and statements

contained herein, including any expression of opinion, are based upon sources believed to be reliable, however no representation or warranty,

either expressed or implied, is provided in relation to their accuracy, completeness or reliability. Expressions of opinion herein were arrived

from careful considerations, which were based upon the best information known to us; and our opinion are believed to be fair and reasonable

in the circumstances prevailing at the time. Any opinion expressed herein is subject to change without notice and may be different or contrary

to opinions expressed by other business sectors as a result of using different assumptions and criteria. This document is distributed solely for

information purpose and should not be construed as an offer or solicitation to buy or sell any securities or related financial instruments. Any

analysis in this document is based on numerous assumptions, and past performance is not necessarily indicative of future results. LXS hereby

does not promise that investors will obtain profits, nor will it share with investors any profits or liabilities for any investment activity taken by

investors with regards to the contents presented herein. The use of any information, statements forecasts and projections contained herein

will be at the sole discretion and risk of the users. The responsible analyst(s) of this report may interact with trading desk personnel, and sales

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Daily Reportfiles123.up.seesaa.net/image/0311201120-20LSX20DR20-20Week20… · Laos The Capital Market Issue Name Current Price Change (Kip) Change (%) 52-week High Low BCEL 9,250