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Discussion Starter · #1 ·
Securities Exchange eyes 2015 launch

Myanmar still has a long way to go to meet its goal of opening a stock exchange by October 2015, but the upcoming securities and exchange law will be a major step, speakers told a seminar in Yangon on May 7.

“The law is going to be enacted in July,” said U Soe Thein, executive director of Myanmar Securities Exchange Centre, adding that the legislation would help fuel the drive to set up the stock exchange.

Although the timeline for the opening of the national stock exchange is tentative, officials at the seminar, which was about initial public offerings (IPOs), were hopeful that the deadline would be met.

Mr Shinsuke Goto, director of Daiwa Securities Group, said a number of events had scuppered development of the exchange, including the 2003 banking crisis which seriously eroded confidence in banks.

“People and banks have to depend on each other and have trust in one another to make financial reforms,” he added.

Mr Kazuhari Ota, managing director of Daiwa’s Investment Banking Solutions Department, said the Central Bank of Myanmar had signed a memorandum of understanding with Daiwa and the Tokyo Stock Exchange to establish an exchange in Yangon by 2015. The three organisations will collaborate to draft the necessary rules and regulations, as well as develop an information technology system, he added.

“We are aware that this infrastructure alone will not make an attractive stock exchange,” Mr Kazuhari said, adding that it would it would take work to attract companies to list on the stock exchange.

Even though there are many restrictions in Myanmar’s banking sector, Daiwa executives say they remain deeply committed to promoting an IPO market in the country. Myanmar Securities Exchange Centre is a joint venture between Daiwa and Myanma Economic Bank that was set up in 1996.

U Win Aung, president of the Union of Myanmar Federation of Chambers, said a number of federation members have become or are in the process of becoming public companies in order to list on the stock exchange.

Most companies in Myanmar know very little about listing on a stock exchange but that will change by 2015, he added.

34,064 Posts
Discussion Starter · #2 ·
Handful Myanmar’s companies meet stock exchange requirements: Security expert

Only a handful of Myanmar’s public companies can meet the operating standards of a stock exchange, Soe Thein, Executive Director of Myanmar Securities Exchange Centre Co Ltd, said on Wednesday.

Myanmar is planning to set up a very first stock exchange in the country to create the financial markets.

There are now over 50 public companies in Myanmar, most of which have been formed after the country’s recent economic reforms. Most of them, however, are not enough systematically organized to fulfill the requirements of the stock exchange, Soe Thein noted.

He said, “Public companies need to publicize their information in a complete manner. They must well prepare the accounts for audit. Among 50 public companies in Myanmar, only five or six of them will meet such standards.”

Myanmar Parliament is expected to pass the Securities Exchange Law in July as the parliamentary discussions on the subject have reached the final stage.

Stock Exchange Committee (SEC), which will set the requirements the stock exchange listing, will be formed when the Securities Exchange Law is passed.

“When the law is passed, the public companies, whether listed or not on the Stock Exchange, will be required to abide by it. I think, when SEC becomes a strong organization, it will be able to enforce the rules and regulations on the public companies,” Soe Thein said.

Myanmar aims to launch the Stock Exchange Market by 2015.

34,064 Posts
Discussion Starter · #3 ·
Myanmar faces big setbacks to implement stock exchange say deputy minister

Myanmar is facing big problems to implement a stock exchange including the need for skilled workers, according to Deputy Minister for Finance and Revenue Maung Maung Thein.

The challenge is to have enough employees who have the necessary skills to organise Stock Exchange Commission (SEC), to have building for stock exchange, to have basic infrastructure of information and technology, to give members of commission and staff for advance training and to educate public companies listed in stock exchange, the deputy minister pointed out.

At present, Myanmar has about five companies who possess these essential qualities to be included in the stock exchange and there has to be at least 80 companies for the stock exchange to run, according to Soe Thein, Executive Director of Myanmar Securities Exchange Co, Ltd.

The Parliament has approved the Securities Exchange Certificate Transaction Law on June 31 and currently waiting to pass the by-laws to form associated organisations concerned with stock exchange.

In transaction law, it didn’t state about foreign companies to include in the exchange market.

Foreign companies have faced difficulty to include in Myanmar stock exchange market because of the Myanmar Companies Act which was affected in 1914.

Now the Parliament is revising to amend the Myanmar Companies Act and will try to announce before 2015, said Aung Naing Oo, Director General of Department of Investment and Companies Administration.

34,064 Posts
Discussion Starter · #4 ·
Yangon Stock Exchange to open in two years - Deputy Minister

The Yangon Stock Exchange (YSE) will open in two years based in the former headquarters of Myawaddy Bank in Yangon, according to the deputy minister for finance.

"We went there to see the location along with Japanese investors. Ground floor and first floor will be rented for the exchange," said Deputy Minister Maung Maung Thein.

The Yangon Stock Exchange will be part of the capital market which will open in two years, he added. A committee has been formed to create the exchange and capital market which is expected to coincide with the opening of the ASEAN Economic Community (AEC) in 2015.

"Technical preparations are under way for the exchange to be opened before the AEC. The committee has to teach local companies to have transparency," he said.

Currently, Myanmar has more than 100 public companies, among them only a few are qualified for listing on the exchange, according to the deputy minister.

A joint venture with Japan's Daiwa Company will be formed soon for the exchange which will have initial capital of Ks 32 billion.

34,064 Posts
Discussion Starter · #5 ·
Joint venture to invest Ks 32 billion in stock exchange

A joint venture between Japan’s Daiwa and a local Myanmar company still to be disclosed will invest Ks 32 billion to establish a stock exchange in Myanmar.

The Deputy Minister for Finance Maung Maung Thein told media on Saturday that the Myanmar company will retain 51 percent shares while Daiwa will retain the rest.

"The plan for the stock exchange will start in 2014. We planned to start it the stock exchange in October 2015. We need further negotiations," said Maung Maung Thein.

At present, Myanmar has 105 public companies but only a few companies can be listed in stock exchange, he added.

The office of the new stock exchange will be located in former head office of Myawady Bank on Kanna Road.

34,064 Posts
Discussion Starter · #6 ·
Ks 32 billion to kickstart Yangon Stock Exchange

The Yangon Stock Exchange, which aims to start trading by October 2015, will begin with a starting capital of Ks 32 billion according to a deputy finance minister.

Japan's Daiwa and Tokyo Exchange will help support Myanmar's new stock exchange and have invested a 49 percent stake in the venture. A draft contract is awaiting approval from the president's office.

"The exchange will be established with a starting capital of Ks 32 billion with Myanmar’s 51% stake and Japan’s 49% stake. They have sent a draft contract to us. We’re now preparing after we get approval from President’s Office and Chief Lawyer’s Office for it, we can start running it," said Maung Maung Thein, the deputy finance minister.

The deputy minister added that local companies were in need of training and information on how the stock exchange would operate and the standards required for companies to get listed.

"There are standards for the companies to be listed in the exchange. Not every company will be listed. Only companies which meet the standards will be allowed registration for the exchange," said Maung Maung Thein.

Though there are 105 public companies in Myanmar, only a few are qualified to be listed on the exchange.

34,064 Posts
Discussion Starter · #7 ·
Myanmar's Yangon Stock Exchange (YSE) On Track For 2015 Launch

Unlike construction of its new Hanthawaddy Airport, Myanmar’s first stock exchange in more than 50 years, the Yangon Stock Exchange (YSE), is mostly on track for the planned 2015 launch, despite a few major obstacles.

The YSE is set to open October 2015, after the government passed the Securities Exchange Law last September. Japan’s Tokyo Stock Exchange (TSE) and Daiwa Securities Group, a Japanese investment company, are tasked with establishing the nation's first equities bourse since the Southeast Asian country was taken over by a military regime in 1962, the Burmese newspaper Irrawaddy reported on Monday.

Daiwa, in partnership with the state-owned Myanmar Economic Bank, in 1996 established the Myanmar Securities Exchange Center (MSEC), which traded stocks in two companies and was largely ignored. The citizens of Myanmar traditionally traded in gold, U.S. dollars, real estate and used cars, but the YSE will be able to provide an alternative as the country’s economy continues to expand rapidly.

The exchange will be established with 32 billion kyat ($32 million) in investment, with the TSE and Daiwa holding 49 percent of the stake. The government hopes that companies will invest the funds they raise by listing on the exchange in a variety of sectors including services, banking, agriculture, hotels and tourism, and further spur Myanmar’s economic growth.

34,064 Posts
Discussion Starter · #8 ·
FMI intends to list on Yangon Stock Exchange

First Myanmar Investment Co Ltd, one of the nation's first public companies, will become a listed firm once the Yangon Stock Exchange is established, company chairman Serge Pun said.

He told FMI's 22nd annual meeting on Sunday that the firm will list on the YSE with assistance from the Myanmar Securities Exchange Centre and Japan's Daiwa Securities Group.

"We believe our listing on the Yangon Stock Exchange will provide considerable value to shareholders and we are happy to support this important national project," said Serge Pun.

"We were able to once again report strong financial results this year, and we expect to do even better in the coming years as some of our newer ventures begin to flourish," he added.

During the meeting, Serge Pun unveiled the firm's new four-pillar strategy that will focus on financial services, real estate, healthcare and aviation, as part of its preparations for the YSE.

He said that these four sectors have tremendous potential, and FMI aimed to become a market leader in each one thanks to its strong experience and professional management team.

"The strategy will see us transform into an even more focused and dynamic public company. We see a very bright future ahead as we continue to be the local partner of choice for international corporations," he said.

At the annual meeting, the firm announced that it had recorded Ks 3.648 billion in total revenue for fiscal year 2013-14, up 78 per cent from the previous year. Net income increased 107 per cent to Ks 3.016 billion, marking the highest figures ever recorded by the company.

Continuing its unbroken record of paying dividends for over two decades, the firm also declared a cash dividend of Ks 200 per share along with a 10 for 1 bonus share issue, effectively representing a total dividend of Ks 1,300 per share for the year.

According to the firm's new strategy, the firm will increase its shareholding in Yoma Bank to 51 per cent. Yoma Bank is one of the nation's oldest and most responsible banks, and has been on the rise over the past two years. The bank has forged a partnership with the International Finance Corporation, with the aim to become the leading SME bank in the country.

In the real estate sector, the firm announced several new projects including Krisplaza, a condominium development in Nay Pyi Taw, and FMI City Gates, a 90-unit development at the entrance of FMI City. The firm's Star City development will see a new phase called Galaxy Towers, which will be launched at the end of 2014. The new phase comprises six elegant buildings and will raise the bar for high-quality apartments in Myanmar.

In healthcare, the firm announced a partnership with the Lippo Group and its healthcare arm Siloam Hospitals, an Indonesian healthcare provider with a market cap of more than US$1 billion. The partnership will see Siloam and FMI jointly develop a nationwide network of hospitals that will significantly upgrade the quality of healthcare in the country.

In aviation, the firm has received preliminary approval from the Myanmar Investment Commission to operate a full airline. FMI Air has acquired three Bombardier CRJ-200 aircraft.

Established in 1992, FMI currently has more than 6,000 shareholders, and boasts an unbroken record of profitability and dividend payments since inception.

So far, three firms have announced their intention to be listed on the YSE - Asia Green Development Bank, Myanmar Agribusiness Public Corp, and FMI.

34,064 Posts
Discussion Starter · #9 ·
Myanmar opens stock exchange as rehabilitation continues

Soe Than WIN | AFP | Getty Images

The building in downtown Yangon where Myanmar's government hopes to locate the country's first stock exchange.

Former pariah state Myanmar will launch its first stock exchange on Wednesday, marking the next stage in the rehabilitation of a country basking in the glow of strong foreign inflows and a new pro-business regime.

Reportedly a $24 million investment, the Yangon Stock Exchange (YSX) was founded by the state-owned Myanmar Economic Bank, Daiwa Securities and Japan Exchange Group, a company that operates the Tokyo Stock Exchange.

The launch marks yet another milestone in the rapid modernization of Myanmar, which has been opening up its economy following decades under military rule. Since Western sanctions were lifted in 2013, foreign direct investment (FDI) hit a record $8 billion during the 2014-2015 fiscal year as multinationals including Coca-Cola, Telenor, Colgate Palmolive, and Mitsubishi bet on an emerging consumer boom.

The middle-class and affluent consumer (MAC) population is expected to nearly double from 5.3 million in 2012 to 10.3 million in 2020, according to Boston Consulting Group.

Moreover, November's general election—the first free and fair vote in decades—saw the military junta respect the victory of Aung San Suu Kyi's National League for Democracy (NLD) party, paving the way for structural reforms in key areas such as manufacturing and infrastructure. Back in 1990, the NLD also won a landslide election but the military annulled the results.

34,064 Posts
Discussion Starter · #10 ·
Myanmar's 22-year quest for a stock exchange

The milestone comes less than a month after the watershed election victory for Aung San Suu Kyi's National League for Democracy. AP

by Anna Kitanaka, Anuchit Nguyen and Nao Sano
Starting a stock market is hard. Just ask Ryota Sugishita.

Two decades after his firm first laid the groundwork for an exchange in Myanmar, Sugishita found himself in a Yangon hotel ballroom in 2013, facing down sceptics in an audience of bankers, corporate executives and politicians.

"'Why isn't bank financing enough?' is a question I got at every single one of those workshops," said Sugishita, a managing director who led the Myanmar bourse project for Daiwa Institute of Research, a unit of Japan's second-largest brokerage. "Having never had a stock exchange before, they didn't understand the importance of it."'

Daiwa's persistence is finally about to pay off. After 22 years of delays caused by the Asian financial crisis, a wary military government and an underdeveloped financial system, Myanmar -- the biggest Asian economy without a stock market -- is scheduled to officially open its exchange in Yangon on Wednesday.

The milestone comes less than a month after the watershed election victory for Aung San Suu Kyi's National League for Democracy, part of a political and economic transformation that's bringing an end to more than five decades of isolation. For all the promise of a modern exchange, though, success is far from guaranteed: trading isn't likely to start until at least February and regulators have yet to announce which companies will list. There's also a risk of further delays as the new government assumes power.

"We all have to start slowly," Lyn Kok, the president and chief executive officer for Thailand and Greater Mekong at Standard Chartered, said in an interview. "The stock market there is definitely a good first step."

Myanmar's equity-market journey began in the early 1990s, when Daiwa executives met with the nation's military rulers in Yangon amid region-wide booms in both economic growth and share prices. Their initial target was to start a bourse by 2000.

"We felt it was odd that Myanmar didn't have a stock exchange," Sugishita said. "They said they wanted to build their financial infrastructure and wanted our expertise. It's the first time we'd been involved in a state project, so we were very happy to."

The region's financial crisis soon derailed those ambitions and it wasn't until 2011, after Thein Sein's quasi-civilian government began opening up Myanmar's economy, that the exchange plan was revived. Faced with creating the nation's market infrastructure, securities regulator and trading laws from scratch, Daiwa decided to partner with Japan Exchange Group Inc. on the project. JPX and Daiwa now own a 49 percent stake in the Myanmar bourse, with the remainder held by the nation's ministry of finance.

As part of preparation for the exchange, delegates from Myanmar visited Tokyo for "Stocks 101" classes taught by veteran Daiwa traders. JPX, which sees the Myanmar bourse as a way to promote its market-structure expertise across Asia, moved four executives to Yangon to oversee the project.

"We were starting from zero," said Mitsuo Miwa, director of the group responsible for the Myanmar bourse at JPX. "It began with explaining what a stock is."

There's still a lot more work to do. Officials haven't yet named the first companies to gain listing approvals, while brokerages -- including Daiwa and Myanmar's KBZ Bank -- only received their conditional trading licenses in October, according to Daiwa. While the bourse plans to start with six stocks, it's unclear when the exchange will open up to foreign investors because the nation's companies law is still being drafted, said Maung Maung Thein, Myanmar's deputy finance minister and chairman of the Securities and Exchange Commission.

One of the biggest fears for Myanmar officials is that the bourse ends up like counterparts in Cambodia and Laos, which have both failed to take off after opening to much fanfare, said Atsuo Tachikawa, the head of Myanmar Business Planning at Daiwa Securities. After starting five years ago, the Lao Securities Exchange still has just four listed equities, while Cambodia's bourse has two.

With a $US66 billion economy that's more than three times bigger than those of Cambodia or Laos, optimists argue that Myanmar's stock market has a better chance of success. Positioned between India and China astride maritime trade routes, Myanmar is rich in natural resources and has 54 million people, ranked by the World Bank as the 25th-most populous country.

Buoyed by a flood of foreign direct investment, the economy is set to expand about 8.3 percent this year and nearly the same pace in 2016, according to the Asian Development Bank.

Myanmar's "economic potential is very good, with its population size and resources," said Marcus Svedberg, the Stockholm-based chief economist at East Capital Group, an emerging and frontier markets money manager. "We like the early stage frontier countries that are just about to tap the global financial markets."

For companies keen to list shares, there's already an unofficial queue. Serge Pun, who returned to Myanmar as an investor more than two decades ago after fleeing a military coup in 1965, says he wants his conglomerate, First Myanmar Investment, to be the nation's first exchange-traded company.

The firm submitted an application four months ago and wants to be a "catalyst for the exchange," Pun said. "We are ready."

34,064 Posts
Discussion Starter · #11 ·
List of 10 Yangon Stock Exchange underwriters revealed

Ten securities companies, named below, intend to operate as underwriters for the new Yangon Stock Exchange which is due to open on December 9, The Myanmar Times has learned.

The exchange has not yet made an official announcement, but corporate sources and all but one of the companies involved have confirmed that provisional licences, dependent on registering a subsidiary with the Directorate of Investment and Company Administration and putting up K15 billion (US$11.5 million) in initial capital, will be granted to the following:

1. AYA Bank’s wholly owned subsidiary, AYA Trust Securities Company
2. Co-operative Bank’s wholly owned subsidiary CB Bank Securities
3. Daiwa Securities and state-owned Myanma Economic Bank’s joint venture subsidiary, Myanmar Securities Exchange Centre
4. Global World Securities, an Asia World affiliated company
5. Green Circle Company, known in Myanmar for its Ve Ve drinks brand, in a joint venture with Hong Kong-based Pins Capital, called Expert Investment Securities
6. Innwa Bank linked Aung Myint Mo Min Securities
7. KBZ Group and Singaporean firm Stirling Coleman Capital’s joint venture company KBZ Stirling Coleman Securities
8. Loi Hein Company and Thai firm KT ZMICO’s joint venture subsidiary KTZ Ruby Hill Securities
9. United Amara Bank’s wholly owned subsidiary Amara Securities
10. Young Investment Group’s wholly owned subsidiary, Union Trust Securities Company

Of these companies, only three – AYA Trust, KBZ Stirling Coleman and Union Trust – have so far registered with DICA, according to the regulator’s website.

Chair of the Securities and Exchange Commission of Myanmar U Maung Maung Thein has repeatedly declined requests to confirm the names of companies, and was unavailable for comment yesterday.

All the underwriters will be in Yangon next week for the launch of the exchange, when an announcement is expected to be made about the 10 underwriters, as well as brokers, dealers and advisors who will also play an important role.

Much remains to be done for companies involved, including installing the necessary IT systems, paying the required up-front capital, hiring and training staff and opening offices.

Director U Thet Tun Oo from the Myanmar Securities Exchange Centre said earlier this week that the first initial public offerings, or IPOs, will not be launched until the underwriters have been granted their licences, adding that this process has not yet started.

The exchange is 49 percent owned by two Japanese companies – Japan Exchange Group, the operator of Tokyo Stock Exchange and Daiwa Securities Group, which signed an agreement with majority owner state-owned Myanma Economic Bank (MEB) on December 23 last year.

Due to its ownership, the exchange risks opening under US sanctions, as previously reported by The Myanmar Times.

While the Yangon Stock Exchange itself is not designated specifically by the US Treasury department’s Office of Foreign Assets Control (OFAC), US officials have said that under US law it would be automatically sanctioned, as it is 51 percent owned by MEB, a state entity under US sanctions.

U Maung Maung Thein told state media on November 30 that around five companies would be ready to list when the exchange opens.

No names have yet been announced publically, though the MSEC chair told Eleven Myanmar that First Myanmar Investment, Myanmar Citizens Bank and Myanmar Thilawa SEZ Holdings would attempt an initial public offering.

Other companies to publicly state their intention to list include Asia Green Development Bank and Myanmar Agribusiness Public Company (MAPCO).

Listing criteria for companies were published on August 23. Firms must meet these standards to attempt an IPO.
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