Feb 5, 2015

Myanmar weighs sale of baht-denominated bonds

Myanmar is considering a sale of baht-denominated bonds as the country raises funds to help it emerge from five decades of economic isolation, according to Thailand’s Securities and Exchange Commission.

The Thai regulator and Myanmar's officials have been discussing the sale of debt to finance infrastructure projects, Vorapol Socatiyanurak, the SEC's secretary general, said in an interview on Tuesday in Bangkok.

Workers chat near a ship at Asia World port in Yangon July 2. Myanmar’s government has taken moves to attract foreign investment, create jobs and boost the country's weak infrastructure. (Reuters photo)

Thailand, Southeast Asia's second-largest economy, is seeking to become a financial hub for smaller countries in the region. The SEC has also approached Cambodia and Vietnam to sell bonds in Thailand, where sovereign issuers aren't required to have a credit rating.

"Most investors are scrambling for an investment opportunity" in Myanmar, Mr Vorapol said. The country's sovereign bonds will offer "attractive investment alternatives for Thai and international investors."

Set Aung, a deputy governor at the Central Bank of Myanmar, and Maung Maung Thein, the country's deputy finance minister, didn't answer calls today to their mobile phones.

A successful bond sale would put Myanmar, Thailand's neighbour to the north, on the trail of the Laotian government, which sold baht-denominated notes for the first time in 2013.

Investment needs

Laos's finance ministry raised a combined 4.5 billion baht from two bond sales in 2013. EDL-Generation Plc became the land-locked country's first company to sell bonds in Thailand in December, raising 6.5 billion baht.

Myanmar, where opposition leader and Nobel Peace Prize winner Aung San Suu Kyi has been pushing for constitutional reform before elections due this year, may need $80 billion of investments in infrastructure projects through 2030 to support growth, the Asian Development Bank estimated in October.

Some Thai developers are also looking to raise funds from real estate investment trusts to finance hotels and property projects in Myanmar, Laos and Cambodia, Mr Vorapol said. The SEC will announce new rules during the current quarter to enable such fundraising, he said.

State-owned utilities, including Electricity Generating Authority of Thailand, Airports of Thailand and Expressway Authority of Thailand, may offer infrastructure funds and sell revenue-backed bonds later this year to finance their overseas expansion, according to Mr Vorapol. The SEC is working with the utilities on the new securities, he said.

Source: Bangkok Post