September 24, 2007
Govt plans securities exchange
It seems that every successful communist economy in Asia wants a stock market nowadays.
China opened the Shanghai Stock Exchange in 1990, and the Stock Trading Center of Vietnam has been operating in Ho Chi Minh City since July, 2000. Both bourses are booming in tandem with their fast-paced economies.
Formerly communist Cambodia is working on its own Phnom Penh bourse with technical assistance from South Korea (Pyongyang may need to wait a while, though).
Therefore, it should come as no surprise that communist Laos has its own stock market plans which will be taking a small step forward at the end of this month.
'We are drafting a prime minister's decree on a Securities Exchange that we expect to submit to the government by the end of September,' said Khankeo Lamanigao, deputy director general of the monetary policy department at the Bank of Laos, the central bank.
The Lao central bank has been tasked with setting up a stock market for Laos by the year 2010, the end of the current five-year plan. Informal stock trading may start as early as next year.
'Maybe we will set up a small trading centre in the central bank, to introduce people to stocks and teach them about securities trading,' said Khankeo.
Not everyone is convinced that this is the right time for Laos, with its rather limited private sector, to be mulling an exchange.
'It is very premature,' said Charles Schneider, head of the International Finance Corporation (IFC) office in Vientiane. The IFC turned down a Lao government request for advice on setting up an exchange, citing other priorities for Laos, such as the need to strengthen the banking sector and leasing industry.
Laos' fledgling banking sector, in fact, took a step forward in August, with the opening of the Vientiane ANZ Bank, a joint venture between ANZ Bank of Australia/New Zealand (holding 60 per cent of the shares), the privately owned Vientiane Commercial Bank (30 per cent) and the IFC (10 per cent).
The commercial bank was the first equity investment in Laos for the IFC, the financial arm of the World Bank.
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