Myanmar bourse launch delayed again, kyat slumps
Myanmar once again has postponed the launch of the country’s new stock exchange, this time to mid-November or early December this year, Xinhua reported.
The bourse with the planned code YEX was originally scheduled to debut in October, but has been delayed because of the country’s upcoming general election set for November 8.
The preparation process for the Yangon Stock Exchange is expected to be complete by the end of this month. The bourse will be operated by the Myanmar Economic Bank in partnership with Japan’s Tokyo Stock Exchange and Daiwa Securities Group.
Only a small number of companies is said to be allowed to list on the stock exchange initially to highlight quality. Once the operation starts, Asia Green Development Bank (AGD), Myanmar Agribusiness Public Corporation (MAPCO) and First Myanmar Investment Co., Ltd. (FMI) will sell their stock shares in the market.
Meanwhile, Myanmar’s currency, the kyat, is depreciating further versus the US dollar ahead of the elections. As of July 14, the kyat traded at another all-time low of 1,137.15 to the US dollar.
For the past nine months, Myanmar’s trade deficit, current account deficit and inflation rate have risen more than forecasts anticipated. Imports are growing too fast and capital inflows are not enough to meet demand for dollars.” Subsequently, confidence in the kyat has weakened.
The Central Bank of Myanmar has moved away from the managed floating rate system for the kyat which was introduced with the support of the International Monetary Fund (IMF) three years ago, which the IMF now argues has caused Myanmar’s economic reforms to be blown off course.
The Central Bank reference rate has now moved to 1200 kyat, from 2012’s rate of 818 kyat. According to the IMF, a further depreciation of the kyat is inevitable. Thus, the Central bank should put a halt to the purposeful depreciation of the kyat and instead allow a “steady” fall in its value to help make exports more competitive and reduce imports.
To cut the current deficit, the IMF said tax incentives should be reduced and a significant improvement in tax collection should be aimed for. In addition an “expenditure re-prioritisation” was needed, meaning less spending on the military and more on other sectors like health and education.
[caption id="attachment_25726" align="alignleft" width="300"] The classical building where the future Yangon Stock Exchange will be housed[/caption] Myanmar once again has postponed the launch of the country's new stock exchange, this time to mid-November or early December this year, Xinhua reported. The bourse with the planned code YEX was originally scheduled to debut in October, but has been delayed because of the country's upcoming general election set for November 8. The preparation process for the Yangon Stock Exchange is expected to be complete by the end of this month. The bourse will be operated by the Myanmar Economic Bank in partnership with...
Myanmar once again has postponed the launch of the country’s new stock exchange, this time to mid-November or early December this year, Xinhua reported.
The bourse with the planned code YEX was originally scheduled to debut in October, but has been delayed because of the country’s upcoming general election set for November 8.
The preparation process for the Yangon Stock Exchange is expected to be complete by the end of this month. The bourse will be operated by the Myanmar Economic Bank in partnership with Japan’s Tokyo Stock Exchange and Daiwa Securities Group.
Only a small number of companies is said to be allowed to list on the stock exchange initially to highlight quality. Once the operation starts, Asia Green Development Bank (AGD), Myanmar Agribusiness Public Corporation (MAPCO) and First Myanmar Investment Co., Ltd. (FMI) will sell their stock shares in the market.
Meanwhile, Myanmar’s currency, the kyat, is depreciating further versus the US dollar ahead of the elections. As of July 14, the kyat traded at another all-time low of 1,137.15 to the US dollar.
For the past nine months, Myanmar’s trade deficit, current account deficit and inflation rate have risen more than forecasts anticipated. Imports are growing too fast and capital inflows are not enough to meet demand for dollars.” Subsequently, confidence in the kyat has weakened.
The Central Bank of Myanmar has moved away from the managed floating rate system for the kyat which was introduced with the support of the International Monetary Fund (IMF) three years ago, which the IMF now argues has caused Myanmar’s economic reforms to be blown off course.
The Central Bank reference rate has now moved to 1200 kyat, from 2012’s rate of 818 kyat. According to the IMF, a further depreciation of the kyat is inevitable. Thus, the Central bank should put a halt to the purposeful depreciation of the kyat and instead allow a “steady” fall in its value to help make exports more competitive and reduce imports.
To cut the current deficit, the IMF said tax incentives should be reduced and a significant improvement in tax collection should be aimed for. In addition an “expenditure re-prioritisation” was needed, meaning less spending on the military and more on other sectors like health and education.
