Eager novice investors in communist Laos signed up for shares as the country's first-ever initial public offerings came to a close, an investment banker said Monday. EDL-Generation Public Company has offered 217 million common shares this month at a fixed price of 4,300 kip (53 cents), with investors showing the most interest on the final day on Monday, said Khouanetyphong Bouanevanh, who is in charge of the offer for underwriters BCEL-KT Securities Co, Ltd.
"Now is the last day to subscribe," he said from Laos. "They are lining up." A notice in the Vientiane Times newspaper said the deadline had been extended to Monday "by public demand". One other initial public offering, by the Banque Pour Le Commerce Exterieur Lao (BCEL), a state-owned commercial bank, ended on Thursday. The official Vietnam News Agency reported that about 20.5 million BCEL shares were offered on auction at an average bid price of 5,910 kip. The offer was oversubscribed.
EDL-Generation was spun off in early December from state-owned Electricite du Laos (EDL) to handle power generation. Khouanetyphong said EDL would remain as majority owner of the new firm but foreign investors would be allowed to own 10 percent of shares while employees and other local residents are eligible for the remaining 15 percent. He expects both EDL-Generation and BCEL to be the only two firms trading on Laos's new stock exchange when it opens for the first time on January 11.
"I think others are coming," said Khouanetyphong, who studied in Japan and expressed pride at being part of the process. "It's my great honour. I can tell my grandkids," he said. Laos, a rural-based, landlocked society of about six million people, is one of Asia's poorest nations and is reliant on foreign donors. But the government has been trying to integrate the fast-growing economy into the wider world.
Chinese economic influence is rising rapidly in Laos, which has traditional political ties, as well as business links, with Vietnam. But corruption remains endemic. Laotian prime minister Bouasone Bouphavanh, who had vowed to tackle graft, resigned last week. Analysts said he had failed to build a large enough powerbase in his communist party.
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