May 19, 2017

China Seeks Up to 85 Percent Stake in Strategic Port in Myanmar

China is looking to take a stake of up to 85 percent in a strategically important sea port in Myanmar, ac­cording to documents re­viewed by Reuters, in a move that could heighten tensions over China's growing economic clout in the country.

Beijing has been push­ing for preferential ac­cess to the deep sea port of Kyauk Pyu on the Bay of Bengal, as part of its ambitious "One Belt, One Road" infrastructure in­vestment plan to deepen its links with economies throughout Asia and be­yond.

A consortium led by China's CITIC Group has proposed taking a 70-85 percent stake in the $7.3 billion deep sea port, according to negotiat­ing documents seen by Reuters and three people familiar with the talks between the Chinese state-owned conglomer­ate and Myanmar's civil­ian government.

The size of the proposed Chinese stake is sub­stantially larger than the 50/50 joint venture pro­posed by Myanmar late last year, an offer rejected by CITIC, said two people involved in the talks.

Well-placed sources told Reuters last month that China had signalled it was willing to abandon the controversial $3.6 bil­lion Myitsone dam project in Myanmar, but would be looking in return for concessions on other stra­tegic opportunities in the Southeast Asian nation - including the Bay of Ben­gal port.

Kyauk Pyu is important for China because the port is the entry point for a Chinese oil and gas pipe­line which gives it an al­ternative route for energy imports from the Middle East that avoids the Ma­lacca Straits, a shipping chokepoint.

The port is part of two projects, which also in­clude an industrial park, to develop a special economic zone in Myanmar's western Rakhine State. CITIC was awarded the lead role in both initia­tives in 2015.

Beijing-based CITIC, China's biggest and oldest financial conglomerate, did not respond to several requests for comment on Friday. China's Foreign Ministry did not imme­diately respond to a faxed request for comment.


Negotiations between Myanmar and CITIC, which sources said were set to start next week in the country's commercial hub Yangon, come amid a Chinese diplomatic push to forge better ties with its resource-rich neighbour.

Myanmar's leaders have traditionally been wary of domination by China.

But the country last month signed an agree­ment that will see oil pumped through the pipeline from Kyauk Pyu across Myanmar to south­western China, while leader Aung San Suu Kyi is due to visit Beijing for a summit on "One Belt, One Road", President Xi Jin­ping's signature policy, in mid-May.

One of the sources, who declined to be named, said CITIC was in the "driving seat" on the port project, and that Myanmar was unlikely to ask for a stake of more than 30 percent due to opposition from the Chinese firm.

"Some people worry that China would have the power to do anything they want and control the pro­ject if it owns 85 percent," said the person, who is familiar with the thinking of policymakers in Myan­mar.

"But Myanmar doesn't have other options," the person added, citing the Myanmar government's financial constraints. The source did not specifically mention a quid pro quo over the Myitsone dam.

A second source close to Myanmar's policymak­ers corroborated that ac­count, adding that Myan­mar has agreed to choose from one of four options proposed by CITIC, leav­ing it with a stake ranging from 15 to 30 percent.

"Myanmar has no other choice but the four op­tions given by CITIC," said the second person, who is involved in the talks.

Funding would be split between Myanmar and the CITIC-led consortium in proportion to the stake agreed, the two sources said.

Soe Win, who leads the management committee of the special economic zone, confirmed nego­tiations would start next week but declined to com­ment on the deal, citing the confidentiality of the talks.


The nearly $10 billion Kyaukphyu Special Eco­nomic Zone, which My­anmar's government has said would create an eco­nomic hub akin to Singa­pore covering 4,289 acres, is part of Myanmar's plan to boost the economy in one of its poorest regions.

A second consortium led by CITIC has also pro­posed taking a 51 percent stake in the $2.3 billion industrial park, an offer Myanmar has agreed to, said the two people in­volved in the talks.

Soe Win said environ­mental and social impact studies would soon be conducted by Myanmar's environmental ministry, with construction due to start in 2018.

The economic zone faces opposition from activists and residents who criticised the tender process and said the de­velopment would have a negative impact on local people.

Around 20,000 people are at risk of losing their homes and livelihoods due to land acquisition for the zone, according to the International Com­mission of Jurists, a hu­man rights watchdog.

CITIC's consortiums in­clude China Harbor En­gineering Company Ltd, China Merchants Hold­ings, TEDA Investment Holding and Yunnan Construction Engineering Group. The only non-Chi­nese state-owned com­pany involved is Thai­land's Charoen Pokphand Group.

Source: Reuters

May 17, 2017

Titan Petrochemicals sets up JV to develop Myanmar oil business

Hong Kong-listed Titan Petrochemicals has announced that its wholly owned subsidiary Surplus Full has entered into a joint venture agreement with Chinese state-run Yunnan Investment for the establishment of Yunnan Yuntou Zhenrong Energy Company.

The registered capital of the new jv is RMB10m ($1.45m). Surplus Full and Yunnan Investment will hold 49% and 51% equity shares in the jv respectively.

The new company will mainly focus on the development of oil projects and other energy businesses in Myanmar.

Currently Titan Petrochemicals primarily engages in the business of construction, repair and conversion of offshore ships and oil rigs, as well as petrochemical trading. The company said it has been looking for business opportunities to diversify its business and the new investment would enhance the downstream business of the group.

Source: Splash24/7

May 14, 2017

Real estate prices collapsing in Yangon!

Due to the enormous supply of newly-built commercial (office space) and residential units in Yangon, it is expected that by the end of 2017 the real estate prices would go down by 20% and 30% respectively.

In order to prevent the market from collapsing, it is highly advisable that the government allow full ownership of commercial and real estate by foreigners as soon as possible and liberalize mortgage market.

Source: MBN internal research

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May 13, 2017

Myanmar to Grant Licences for More Types of Insurance ‘Soon’ as Industry Liberalises

Myanmar finance authorities have submitted a pro­posal to the government on seeking permission to grant operation of all types of insurance servic­es to the private sector.
Licenses for all 40 types of insurance plus addi­tional farmers' insurance and overseas employment life insurance are expect­ed to be granted by the government soon, said U Kyaw Win, minister for planning and finance.
Out of 40 types of insur­ance, the government's Myanmar Insurance (MI) has so far allowed licenses for only 12 types of them with private companies. Of them, traveling insur­ance, total vehicle insur­ance, fire insurance and life insurance are the best sellers.
MI has granted licenses to 11 private insurance companies since May 2013. Starting from 2015, MI has planned to open up more insurance cat­egories to private compa­nies.
These categories include products like mercantile marine insurance, credit guarantee and health in­surance, but it still limits life and general insur­ance.
The Insurance Busi­ness Supervisory Board, chaired by former Deputy Finance Minister Maung Maung Thein, said at pre­sent Myanmar has 11 pri­vate insurance companies with its premium income reaching more than 72 billion Kyats (65.45 mil­lion U.S. dollars) annu­ally.
The country has insur­ance penetration of 0.1 percent of GDP, an in­crease of about 4.5 times compared with one dec­ade ago. However total premium income is small relative to the country's economy.
Following credit guar­antee insurance that MI launched in July 2014, health insurance was the second new product be­fore the launch of weather index insurance as its third new product.
Health insurance poli­cies has been introduced for the first time in My­anmar under a one-year trial since July 1, 2015 and people aged between 6 and 65 years are set to be eligible for the health insurance.
In the latest develop­ment, nine local Myan­mar private insurance companies began a new version of health insur­ance sale to local citizens and foreigners in January this year which guaran­tees to pay partial cost of hospitalization expense and insurance coverage for accidental deaths.
Since 2012, the country has started liberalizing the sector, granting li­censes to private compa­nies but restricting them to operating only six kinds of insurance services.
Of the 20 foreign in­surance companies wait­ing to enter Myanmar's insurance market, three have been reportedly to operate in some special economic zones.
Source: Xinhua

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May 12, 2017

Miss Universe Bago invitation! - June 24, 2017