Myanmar stock market to kick off in October

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YSEThe Myanmar government has now confirmed that it will open its first-ever professional stock exchange, the Yangon Stock Exchange (YSE), in October this year and that there will be no more delays, according to the country’s finance minister Maung Maung Thein.

The newly established Securities and Exchange Commission in Myanmar is now looking for professional financial firms and financial service providers, namely brokerage firms, underwriters, financial consultants and dealers. For each of these professions, special licenses will be granted, the commission announced, adding that interested companies can apply until February 27, 2015. The license winners will be announced in mid-April. Reportedly, the commission has already received proposals from about 10 international firms.

The new YSE will replace the more or less defunct Myanmar Securities Exchange Center which existed as an over-the-counter exchange since 1996, but has only two listed companies – Forest Products Joint Venture Corporation and Myanmar Citizens Bank – whose shares are seldom traded. The only other stock market that ever existed in the country was the Rangoon Stock Exchange set up by the British in the 1930s as a secondary over-the-counter market for Indian shares in what was then Burma. It closed down when the military junta took over in 1962.

However, the new stock exchange should now support Myanmar’s efforts to enter the international financial stage and also to allow domestic companies to raise capital for long-term investment. The respective Securities and Exchange Law has already been enacted in July 2013, and related rules and regulations are constantly being added. The exchange will be operated by a joint venture company of Myanmar Economic Bank Holding with a 51-per cent stake and two Japanese firms – Daiwa Institute of Research and the Japan Exchange Group – holding 30.25 per cent and 18.75 per cent, respectively. The location of the new stock exchange will be the former headquarter of the Reserve Bank of India’s branch in Myanmar, an iconic building in a 1930 neoclassical art deco style, on Merchant Road in Yangon’s downtown business district.

So far, only three private Myanmar companies are known to have expressed interest in listing at the new YSE. The companies are Asia Green Development Bank, First Myanmar Investment Co Ltd, and the Myanmar Agribusiness Public Cooperation Limited, a firm established by the Myanmar Rice Federation. However, these companied could be joined by certain state-owned companies that have been earmarked for privatisation.

It is also expected that the YSE will trade Myanmar government bonds, as well as commodities and currencies, but the success of a completely new financial market will largely depend on whether public investors are willing to provide liquidity. Local bankers also concede that public awareness about this new market needs to be raised as financial literacy in the country is still comparably low.

A look at Myanmar’s peers doesn’t give many clues: While Vietnam has been quite successful with establishment its stock market in the year 2000, Laos and Cambodia (both started in 2011) are having a hard time to fill the trading floor with life.

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Reading Time: 2 minutes

The Myanmar government has now confirmed that it will open its first-ever professional stock exchange, the Yangon Stock Exchange (YSE), in October this year and that there will be no more delays, according to the country’s finance minister Maung Maung Thein.

Reading Time: 2 minutes

YSEThe Myanmar government has now confirmed that it will open its first-ever professional stock exchange, the Yangon Stock Exchange (YSE), in October this year and that there will be no more delays, according to the country’s finance minister Maung Maung Thein.

The newly established Securities and Exchange Commission in Myanmar is now looking for professional financial firms and financial service providers, namely brokerage firms, underwriters, financial consultants and dealers. For each of these professions, special licenses will be granted, the commission announced, adding that interested companies can apply until February 27, 2015. The license winners will be announced in mid-April. Reportedly, the commission has already received proposals from about 10 international firms.

The new YSE will replace the more or less defunct Myanmar Securities Exchange Center which existed as an over-the-counter exchange since 1996, but has only two listed companies – Forest Products Joint Venture Corporation and Myanmar Citizens Bank – whose shares are seldom traded. The only other stock market that ever existed in the country was the Rangoon Stock Exchange set up by the British in the 1930s as a secondary over-the-counter market for Indian shares in what was then Burma. It closed down when the military junta took over in 1962.

However, the new stock exchange should now support Myanmar’s efforts to enter the international financial stage and also to allow domestic companies to raise capital for long-term investment. The respective Securities and Exchange Law has already been enacted in July 2013, and related rules and regulations are constantly being added. The exchange will be operated by a joint venture company of Myanmar Economic Bank Holding with a 51-per cent stake and two Japanese firms – Daiwa Institute of Research and the Japan Exchange Group – holding 30.25 per cent and 18.75 per cent, respectively. The location of the new stock exchange will be the former headquarter of the Reserve Bank of India’s branch in Myanmar, an iconic building in a 1930 neoclassical art deco style, on Merchant Road in Yangon’s downtown business district.

So far, only three private Myanmar companies are known to have expressed interest in listing at the new YSE. The companies are Asia Green Development Bank, First Myanmar Investment Co Ltd, and the Myanmar Agribusiness Public Cooperation Limited, a firm established by the Myanmar Rice Federation. However, these companied could be joined by certain state-owned companies that have been earmarked for privatisation.

It is also expected that the YSE will trade Myanmar government bonds, as well as commodities and currencies, but the success of a completely new financial market will largely depend on whether public investors are willing to provide liquidity. Local bankers also concede that public awareness about this new market needs to be raised as financial literacy in the country is still comparably low.

A look at Myanmar’s peers doesn’t give many clues: While Vietnam has been quite successful with establishment its stock market in the year 2000, Laos and Cambodia (both started in 2011) are having a hard time to fill the trading floor with life.

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