Myanmar aims to set up its first stock exchange by 2013; many industry players said they are skeptical on whether a stock exchange can actually be operational so soon.

Myanmar aims to set up its first stock exchange by 2013

By May Wong
POSTED: 16 Jul 2013 11:57 PM
Myanmar government is pushing hard to set up its first stock exchange in order to build up their capital markets.

YANGON: Myanmar hopes to set up its first ever stock exchange before the end of this year. It expects Parliament to pass the Security Exchange Law within this month during the current session. Myanmar wants to model its stock exchange after the Japan and Singapore stock exchanges. It feels that both exchanges bear many similarities and meet the needs as well as objectives of Myanmar.Myanmar will then pick out elements from these two bodies before incorporating and developing their own stock exchange.

For a start, Dr Maung Maung Thein said that the country will only allow local public companies to be listed on the stock exchange before enabling foreign firms to do so.

He later declined to say how many local firms will be granted approval or will actually qualify for the listing.

However, Channel NewsAsia understood that less than one-third of the approximately 70 local public companies in the country will actually qualify for listing.

Setting up a stock exchange in Myanmar is extremely difficult simply because the country has got a very basic banking infrastructure and a very low-skilled workforce.

However, Dr Maung Maung Thein said this is something that the country will have to do to push forward in order to help the country accelerate and boost its economic growth.

“If we want to raise our economy, we need finance. Government financing cannot be enough for the private sector. With the set-up of the capital market, only then the private sector can get what they want in terms of finance. There are a lot of public local companies which are coming up with public shares. Some are good and reliable, some are not so reliable but we have to start (somewhere), that’s the important thing,” he said.

However, many industry players said they are skeptical on whether a stock exchange can actually be operational so soon.

They are also concerned on whether or not there are enough local companies which actually qualify to be listed. Some even expressed reservations and said they will still consider their options even if they qualify to be listed.

Dr Sein Maung, chairman of First Private Bank, said: “I’ve been asked to register. Right now, I have no problems selling my shares and I have control over my shareholders. I’m thinking twice now whether I should go ahead. If I need funds, then I might go for it.

“The other problem is that once I register, it’s very hard to control. A lot of speculators will be buying and selling my shares and there will be a lot of speculation on my shares. I can’t control the price. Now I can control my price, I can choose my shareholders so I have to think. Whichever is good for my bank, I’ll do it.”

Dr George Soe Win, senior advisor at Livestock & Fisheries Development Bank, said: “The locals don’t know about the corporate culture and also they don’t have much experience about corporate governance or something like that. They need at least two to three years to take time to catch up to all those corporate culture.”

The Myanmar government has already identified a site – the old central bank located in downtown Yangon – to set up the stock exchange.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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