Singapore bourse attracts Myanmar companies

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singapore-exchangeIn the absence of an own capital market in Myanmar, more and more companies feel attracted by a stock listing Singapore in Singapore, experts say.

Lawyers and financial advisers who work closely with Myanmar firms say about six to 10 companies are considering a listing in Singapore over the next couple of years.

“Many Myanmar business owners admire the reputation of Singapore Inc and look forward to raising their own prestige with a Singapore listing,” said Chia Kim Huat, head of corporate and capital markets at Singapore law firm Rajah & Tann.

But hurdles to successful offerings are high. Singapore’s bourse says while it has seen interest from Myanmar companies, they will have to meet its corporate governance standards. For many businesses, that’s still quite a distant goal, lawyers and bankers said.

That’s further complicated by several Myanmar tycoons being on a US sanction list, accused of making their fortunes by colluding with the former military junta, which was notorious for corruption and human rights abuses.

While the European Union ended sanctions this year, the US has only suspended them. The potential for resistance from Myanmar’s government, which is planning its own stock exchange, has also made some local businesses wary about tapping capital markets offshore.

To date, only one Myanmar firm has managed to list in Singapore – Yoma Strategic, which listed in 2006 through a reverse takeover. The property and car sales conglomerate led by tycoon Serge Pun now counts Capital Group, Aberdeen Asset Management and Vanguard among its top 10 shareholders, and its share price has quadrupled since early last year on investor interest in the hot frontier economy. It’s only natural that other Myanmar firms would want to follow suit.

“To this day in Myanmar, there’s no stock market, no bond market, no banking market to talk about. There are quite a few companies that are asset-rich but have no source of liquidity,” said Andrew Rickards, chief executive of Yoma.

But if corporate Myanmar is drawn by Yoma’s example, it is also wary of what happened to Zaw Zaw, one of Myanmar’s most powerful businessmen.

The Singapore Exchange effectively rejected in April a proposed reverse takeover deal in which Zaw Zaw would have injected his petrol kiosk business into bed linen retailer Aussino. SGX said it was “unable to proceed with the review of the application, as major issues have not been adequately resolved”. Among these concerns, it cited Zaw Zaw’s placement on the US sanction list and the lack of clarity as to why he was on it. Zaw Zaw could not be reached for comment.

Myanmar’s corporate landscape is dominated by about 20 large conglomerates, with the biggest ones estimated to be employing as many as 30,000 people each.

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Reading Time: 2 minutes

In the absence of an own capital market in Myanmar, more and more companies feel attracted by a stock listing Singapore in Singapore, experts say.

Reading Time: 2 minutes

singapore-exchangeIn the absence of an own capital market in Myanmar, more and more companies feel attracted by a stock listing Singapore in Singapore, experts say.

Lawyers and financial advisers who work closely with Myanmar firms say about six to 10 companies are considering a listing in Singapore over the next couple of years.

“Many Myanmar business owners admire the reputation of Singapore Inc and look forward to raising their own prestige with a Singapore listing,” said Chia Kim Huat, head of corporate and capital markets at Singapore law firm Rajah & Tann.

But hurdles to successful offerings are high. Singapore’s bourse says while it has seen interest from Myanmar companies, they will have to meet its corporate governance standards. For many businesses, that’s still quite a distant goal, lawyers and bankers said.

That’s further complicated by several Myanmar tycoons being on a US sanction list, accused of making their fortunes by colluding with the former military junta, which was notorious for corruption and human rights abuses.

While the European Union ended sanctions this year, the US has only suspended them. The potential for resistance from Myanmar’s government, which is planning its own stock exchange, has also made some local businesses wary about tapping capital markets offshore.

To date, only one Myanmar firm has managed to list in Singapore – Yoma Strategic, which listed in 2006 through a reverse takeover. The property and car sales conglomerate led by tycoon Serge Pun now counts Capital Group, Aberdeen Asset Management and Vanguard among its top 10 shareholders, and its share price has quadrupled since early last year on investor interest in the hot frontier economy. It’s only natural that other Myanmar firms would want to follow suit.

“To this day in Myanmar, there’s no stock market, no bond market, no banking market to talk about. There are quite a few companies that are asset-rich but have no source of liquidity,” said Andrew Rickards, chief executive of Yoma.

But if corporate Myanmar is drawn by Yoma’s example, it is also wary of what happened to Zaw Zaw, one of Myanmar’s most powerful businessmen.

The Singapore Exchange effectively rejected in April a proposed reverse takeover deal in which Zaw Zaw would have injected his petrol kiosk business into bed linen retailer Aussino. SGX said it was “unable to proceed with the review of the application, as major issues have not been adequately resolved”. Among these concerns, it cited Zaw Zaw’s placement on the US sanction list and the lack of clarity as to why he was on it. Zaw Zaw could not be reached for comment.

Myanmar’s corporate landscape is dominated by about 20 large conglomerates, with the biggest ones estimated to be employing as many as 30,000 people each.

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