South-east Asian countries are prone to making a lot of noise, especially if it means votes for politicians or dollars for business. Often it means both at the same time, particularly on regional stock exchanges where separating the politics from the boardroom antics is about as doable as removing the pasta from the sauce.
It’s the stuff of instant millionaires and billionaires and flourished in the 1980s and 1990s alongside the hype and hackneyed clichés like the ‘Asian economic miracle’ or ‘capitalism with Asian values’.
Of the countries that missed out altogether, Burma and Cambodia were being torn apart by their own militaries while Laos lived up to its reputation as a backward, if fairytale-like place, where they famously listen to the rice grow.Enjoying this article? Click here to subscribe for full access. Just $5 a month.
Burma’s stock exchange was closed in the 1960s after the military takeover. Juntas aren’t known for their economic nous, and the current regime has proved they are no exception to the rule. There was talk of reopening it back in 1995. In fact, Burma’s stock market was going to take shape faster than the fledgling bourse in Vietnam, according to the touted Japanese partners at the time.
But that evaporated as mysteriously and as quickly as that country’s 1990 election results.
In recent years, Cambodia has proved the eager beaver, with corporations and politicians telling anyone who cares to listen of the gazillions of unrealized dollars and worthy investments that are lying in wait, for the day its stock market is finally launched. The gushing cheerleaders were at their loudest as world markets peaked in early 2008, then fell silent as the Global Financial Crisis took hold and put some fair value back into public listed companies around the world. Deadline after deadline passed and still no Cambodian stock exchange.
Meanwhile, in the backwaters, Laos had unveiled its plans. With little fanfare and no hype, a few years back it scheduled to open its Stock Exchange in January, 2011. And, unlike its larger and louder neighbours, is on target.
This week, national energy producer, state-operated EDL-Generation, issued a prospectus and announced plans to become the first company to list on the Laos Securities Exchange, next month. It intends to raise $116 million with a 217.1 million share placement representing 25 percent of the company’s enlarged capital. This includes separate allotments for employees, domestic investors and their foreign counterparts. The earnings outlook is strong and the offer closed Friday.
Few would attempt to portray the communist authorities in Laos as a leading light in financial transparency. However, by sticking to their stated schedule for initiating a stock exchange and holding one of their few international companies up to international scrutiny, Vientiane has leaped ahead of Cambodia and Burma in the race to establish a financial centre.
How far that lead extends might be seen in how quickly shares are taken-up in EDL’s initial offer.