Lao bourse eyes flood of listings

Foreign investors keen to invest in 100 hydropower plants in Laos are the main target for newly listed shares on the Lao Securities Exchange (LSX) as it tries to increase the number of listed securities there.

Companies from Thailand, Vietnam, China and Russia have shown interest in new hydropower plant investment, and those that win bids from the Lao government will be approached about listing, said Dethphouvang Moularat, chairman and chief executive of LSX.

Since its debut in 2011, three companies — EDL Generation, Banque Pour Le Commerce Exterieur Lao and Lao World — have listed on the LSX.  

Mr Dethphouvang projects the number of listed companies to increase from five in 2015 to 26 by 2020. Most of the potential firms are power-generating companies.

Foreign investors looking at investment opportunities in Laos are mainly electricity-generating companies, underscoring the country's aims to be the "battery of Asia" by 2020.

The hydroelectric sector dominates investment in Laos with US$4 billion the past few decades, the main driver of economic growth.

The Lao government forecast GDP growth of 7.5% this year.

World Bank research estimates Laos has the capacity to generate 20,000 megawatts of hydropower. Laos feeds some 2,000 MWs into Thailand's power grid.

In related news, Kobsak Pootrakool, executive vice-president of Bangkok Bank, said Thai companies could no longer rely on domestic consumption, as business opportunities to serve the 180 million people in the markets of Cambodia, Laos, Myanmar and Vietnam are opening up. Thai exports to these countries grow 20% per year on average.

He estimates average growth in those countries of 7-8% per year, while Myanmar alone could expand 10% per year over five years.

"The advantage for Thai companies is this region is our home. Competition from international companies has intensified, but once things get difficult they will leave, and we are more likely to be there for the long run," said Mr Kobsak.

"Thailand is an excellent location from which to invest in the region due to proximity and more governments opening up," said Tanawong Areeratchakul, vice-president of corporate administration of SCG Plc. It is no longer possible to make a quick gain in Asean due to higher competition following offshore investment, he said.

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