The tale of the sleepiest ASEAN bourses

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lsxDiscounting Myanmar, which has yet to create a stock exchange of its own, the Lao Securities Exchange (LSX) and Cambodia Securities Exchange (CSX) are truly the sleepiest bourses in ASEAN.

The menial amount of turnover generated by the two bourses, which only list three companies combined (two in Laos; one in Cambodia), draws a potent parallelism of the disparate nature facing the formation of the ASEAN Economic Community (AEC), due to come together in 2015 (though sometime in 2016 is more likely).

According to a report in the Bangkok Post, the combined daily turnover of the three listed companies in Cambodia and Laos reaches approximately $160,000, only accounting for about a few minutes of trading activity on the Stock Exchange of Thailand, with a daily turnover of nearly $2 billion.

The market capitalisation is $0.6 billion for Laos and $0.55 billion for Cambodia, respectively, as compared to Thailand’s with $7.78 billion or Singapore’s with $64.1 billion

A major reason why the bourses have failed to list more companies since being launched about two years ago is because of a number of non-transparent practices de jour, an open conflict with the ideals of the AEC.

Local companies in Laos and Cambodia – listed or not – rarely disclose financial information or operational rules and regulations. As a result, risk adverse investors have stayed clear of participating in public trading.

But, as is ASEAN’s design, the largest member nations, in hope that fine-tuned policies and funding will eventually spill over, will create a demonstrative effect for the weakest links.

Among the outlined integration plans for the AEC is the launch of the ASEAN Trading Link, led by the top bourses in the 10-nation bloc from Singapore, Malaysia, Indonesia, Vietnam and the Philippines. The linked bourses would allow the ASEAN community to begin trading stock across borders, pressuring others to reform to catch up.

The clear frontrunner of the two bourses is the LSX, with its two listings – EDL Generation Plc and Banque pour le Commerce Exterieur Lao – which began trading upon the exchange’s opening in 2011.

Already, Laos has begun aiming high, stating that it wants to have 10 companies listed by 2016, breaking even within five years. Cambodia, however, may have more potential companies to list that Laos, given its more sizeable and faster growing economy.

Ignorance of sound business practices will have to change nonetheless. Synergies being created by their neighbours could stimulate a new story.

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Reading Time: 2 minutes

Discounting Myanmar, which has yet to create a stock exchange of its own, the Lao Securities Exchange (LSX) and Cambodia Securities Exchange (CSX) are truly the sleepiest bourses in ASEAN.

Reading Time: 2 minutes

lsxDiscounting Myanmar, which has yet to create a stock exchange of its own, the Lao Securities Exchange (LSX) and Cambodia Securities Exchange (CSX) are truly the sleepiest bourses in ASEAN.

The menial amount of turnover generated by the two bourses, which only list three companies combined (two in Laos; one in Cambodia), draws a potent parallelism of the disparate nature facing the formation of the ASEAN Economic Community (AEC), due to come together in 2015 (though sometime in 2016 is more likely).

According to a report in the Bangkok Post, the combined daily turnover of the three listed companies in Cambodia and Laos reaches approximately $160,000, only accounting for about a few minutes of trading activity on the Stock Exchange of Thailand, with a daily turnover of nearly $2 billion.

The market capitalisation is $0.6 billion for Laos and $0.55 billion for Cambodia, respectively, as compared to Thailand’s with $7.78 billion or Singapore’s with $64.1 billion

A major reason why the bourses have failed to list more companies since being launched about two years ago is because of a number of non-transparent practices de jour, an open conflict with the ideals of the AEC.

Local companies in Laos and Cambodia – listed or not – rarely disclose financial information or operational rules and regulations. As a result, risk adverse investors have stayed clear of participating in public trading.

But, as is ASEAN’s design, the largest member nations, in hope that fine-tuned policies and funding will eventually spill over, will create a demonstrative effect for the weakest links.

Among the outlined integration plans for the AEC is the launch of the ASEAN Trading Link, led by the top bourses in the 10-nation bloc from Singapore, Malaysia, Indonesia, Vietnam and the Philippines. The linked bourses would allow the ASEAN community to begin trading stock across borders, pressuring others to reform to catch up.

The clear frontrunner of the two bourses is the LSX, with its two listings – EDL Generation Plc and Banque pour le Commerce Exterieur Lao – which began trading upon the exchange’s opening in 2011.

Already, Laos has begun aiming high, stating that it wants to have 10 companies listed by 2016, breaking even within five years. Cambodia, however, may have more potential companies to list that Laos, given its more sizeable and faster growing economy.

Ignorance of sound business practices will have to change nonetheless. Synergies being created by their neighbours could stimulate a new story.

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