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Stock Market Development in Country With Least Development But Fast Economic Growth: A Case Study of Lao PDR



Author(s)

Somvixay Chanthavong

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DOI:10.17265/1548-6583/2018.06.002

This paper aims to examine the market development evolution of Lao Securities Exchange (LSX) by observing the institutional structure, securities regulations, and government’s policy and utilizing the annual data of market indicators from 2011 to 2017 through the regression model in order to determine the facing issues with proposing the resolution implication for securities exchange development. The finding of this paper also concludes that the liquidity issue, small number of listed firms, undiversified products, small investor base, insufficient legislation from regulatory body, and slow progress in transforming state-owned enterprises (SOEs) into public companies are the current pressure obstacles for securities market development in Laos. In this case, there is a need for stronger commitment from government in securities market development by closer collaboration among line ministries, enlarging the investor base to public and private sectors, acknowledging the significance of drafting the public company act, and persuading the SOEs to issue initial public offering (IPO) in LSX, as the result would drive positive impacts to stimulate the capital market development in Lao People’s Democratic Republic (Lao PDR).

Lao Securities Exchange (LSX), Lao stock market, listing companies, financial system, capital market