Heat oil in a large Dutch oven over medium heat. Add shallots and cook, stirring, about 2 minutes. Add the garlic, and continue to stir; add ginger. Continue cooking until shallots are soft and translucent, about 3 minutes. Add bay leaves and red pepper; continue cooking for 1 minute more. Stir in squash, salt, and curry powder; cook for 10 minutes.
Raise the heat to medium-high, and add chicken stock. Cover, and bring to a boil. Immediately lower the heat, and simmer for 15 minutes, stirring and mashing every 5 minutes. Add the palm sugar and cook for 5 minutes. Add the coconut milk and continue cooking for 10 minutes.
Remove bay leaves from soup. Using an immersion blender or in batches using a bar blender, puree until smooth.
Reheat soup, seasoning with salt. Garnish with chives, and serve immediately.