Laos has a new stock market.
Launched during January 2011, on its opening day, the Laotian Securities Exchange listed 2 state-owned businesses, a bank and a power company. News reports indicated that investor interest in their securities was considerable and the IPOs (Initial Public Offerings, the process through which shares in privately held or state-owned firms are sold to the public) were oversubscribed. However, last April, average daily trading sunk to $941.
Actually, there are many new stock markets. Traditionally located in wealthy nations and British colonies, during the past 30 years, stock markets began popping up everywhere from Mongolia (1992) to Fiji(1980) to Iceland(1985) and Saudi Arabia(1984) and close to 50 other countries. During the 1990s, Eastern Europe was the place where many appeared.
Why?
This takes me back to 1792 and a button wood tree on Wall Street where traders used to gather each day to buy and sell securities. Whether in a developing nation 220 years ago or now, stock markets help growth because they pair businesses with investors.
Sources and Resources: Here, you can see the home page of the Laos Securities Exchange and their ticker tape (I think just 2 firms cycling) while The Guardian and WSJ had articles about its launch. For more current news about Laos’s World Trade Organization membership, this WTO announcement might be helpful. And finally, on the proliferation of stock markets in emerging economies, this research paper, “Policy as Myth and Ceremony? The Global Spread of Stock Markets,” was excellent.
