Jun 12, 2016

Myanmar: Yangon SE may open up to allow foreign participation in 2 years

The newly-created Yangon Stock Exchange (YSX) is likely to allow foreign companies to participate and trade in the exchange over the next two years.

Currently, six companies are planning to list and trade on the YSX in 2016 while a dozen others are expected to follow suit next year. By the next two years, foreign firms will eventually be welcomed to invest and participate in the bourse, said sources familiar with the development. The move of allowing foreigners to participate at the YSX will help boost liquidity in the market. This could materialise once the Myanmar Company Act is finalized in 2016.

“We already have a plan for that (to welcome foreign counterparts on YSX) but it might not materialize immediately. The local market should also need some time to develop,” said Maung Maung Thein, former chair of the Securities Exchange Commission of Myanmar. U Thet Htun Oo, executive securities manager, YSX, said, this work could take up to two years as they need to set up a proper policy for the foreign counterparts to join the YSX. The inputs for that policy will come from the Securities and Exchange Commission and the Ministry of National Planning and Economic Development, he added. “It could take about two years to happen,” Oo told DEALSTREETASIA. Some officials are of the opinion that foreign participation in the exchange would challenge the ownership of local companies but Thien maintained that this would help in further development. “If we think about the development side, allowing foreign investment needs to be done,” he said.

Much work is needed to develop the stock exchange including helping small and medium scale companies to merge and form a public company, said Hla Maung, chairman of Tokio Investment. The YSX started its official listing and trading in March 2016 and two companies are trading actively on it. Myanmar Thilawa SEZ Holdings Public Ltd closed its price on June 9 at K57,000 ($48) per share with a trading volume of 2,393. Its price has fallen from K70,000 ($59) on May 24. For First Myanmar Investment Co Ltd, the closing price on June 9 was K25,500 ($21) with a trading volume of 2,912. On March 29, the price reached up to K41,000 ($35) per share with trading volume at 210,752. First Private Bank, Myanmar Citizen Bank, Myanmar Agribusiness Public Corporation and Great Hor Kham are currently preparing to list on YSX within this year. Five securities firms are engaged with YSX including AYAtrust Securities, CB Securities, KBZ Stirling Coleman Securities, KTZ Ruby Securities and Myanmar Securities Exchange Centre.

Read more at: http://www.dealstreetasia.com/stories/ysx-looks-to-embrace-outsiders-in-about-two-years-time-43757/