The Lao Government is in the process of preparing documents, measures and regulatory and legal frameworks necessary to register government bonds on the Lao stock market (Lao Securities Exchange – LSX).
All the arrangements are being handled by the Lao Securities Commission Office (LSCO) and the regulatory work and other measures are set to be completed this year, Secretary General of LSCO Saysamone Chanthachack said.
“According to the planned project, we are set to register the government’s bond on the LSX as soon as possible, but the Ministry of Finance is the key decision-maker,” she said, adding that the bond will be the latest product in the local capital market pipeline.
She said the planned bond offering is based on the experiences learned from neighboring countries and ASEAN-Plus-Three countries (China, Japan, and South Korea) because they have successfully offered products similar to the planned bond.
“I can’t give a fixed schedule as to when the bond will be ready for registration or trade on the LSX, but we are doing our best to pave the way for its registration,” Chanthachack said.
Seven companies are currently listed on the local stock market:
- Banque pour le Commerce Exterieur Lao Public (BCEL)
- EDL Generation (EDL-Gen)
- Lao World (LWPC)
- Petroleum Trading Lao (PTL)
- Souvanny Home Center (SVN)
- Phousi Construction and Development (PCD)
- Lao Cement Public Company (LCC)
“According to the plan, two to three companies are set to be listed on the LSX this year and some companies are now preparing to meet the requirements of the LSX,” she said.
A sovereign bond is a debt security issued by a national government. Sovereign/government bonds can be denominated in a foreign currency or the government’s own domestic currency, generally with a promise to make periodic interest payments and to repay the face value on a maturity date.
The LSX was established in 2010 with technical and financial support from South Korea. The Korea Exchange has a 49 percent stake in LSX.
Thailand provided technical advice to help build the exchange and it became operational on the 11th of January, 2011.