Future prospects for Yangon Stock Exchange (YSX)

Yangon used to be busy and have a lot of people everywhere, but now number of vehicles and people has become smaller and smaller due to the ongoing Covid-19 crisis. The number of those who are staying at home has been gradually increasing as they curb possible contacts in their daily relationship. At such a time, much of the work is shifted to online. In the financial market, the trading on Yangon Stock Exchange is moving more sluggishly than normal. The value traded on YSX by normal trading system during August reached K747.5 million worth of 118,850 shares. The value traded on YSX by block trading system reached K197.45 million worth of 54,874 shares. The total value traded on YSX during August touched K944.95 million and the value traded daily was around K47 million, cited for the announcement of the YSX.

The YSX’s trading decreased by about 5% when it was compared to July this year. As a new development step, the YSX allowed the foreigners and external organizations to buy shares of YSX listed companies starting on 20 March in 2020. It was learnt that the foreigners and external organizations bought more than 53,200 shares from YSX listed companies during five months following the official announcement of the YSX. The official statistics recorded on 9 September indicated that the foreigners and external organizations bought 9,606 shares from FMI, 37,974 shares from MTSH, 5,465 shares from Ever Flow River Group Public Co., Ltd and 200 shares from TMH Telecom Public Co., Ltd. The YSX allowed foreign investors and organizations to participate in the share trading with the purpose of picking up stock share trading speed among YSX listed companies. The foreigners have to open designated bank accounts and trade in stock shares. It is already informed by Securities and Exchange Commission under the Ministry of Planning, Finance and Industry. The foreigners living inside the country and those from foreign countries are allowed trading in stock shares of YSX listed companies.

In a bid to extend YSX share trading into the international community, regulatory procedures have to be observed as Myanmar instructed. If the return on the investment is wanted to be sent to the relevant foreign country, the foreign listed company will have to be under supervision by the Central Bank of Myanmar following rules and regulations as well as directives issued by the Central Bank of Myanmar besides the provisions of Foreign Exchange Management Law. It is aimed at ensuring a systematic financial flow when the YSX carries out share trading. Only then can errors be reduced at a time when financial matters are being carried out and stock shares are being traded in. The global pandemic of Covid-19 slowed down the favourable prospects for economic growth and local and foreign investments in Myanmar.

Businesses and investments are moving to the countries having better economic potentials in the future right now when there has been an increase in the number of business contacts. The YSX is one of the interesting businesses of international investors. There is also a plan to change State-owned businesses into YSX listed companies in order to attract the attention of local and foreign investors in the YSX running with slow share trading. It is to intend local and foreign investors to pay more attention to share trading among the strong businesses.

The international investors have shown great interest in doing business in Myanmar. The foreign investment volume reached USD5.2 billion during 2019-2020 financial years reported by Myanmar Investment Commission. The MIC has so far allowed more than 330 new foreign investments. The foreign investment volume the MIC expected for this financial year is USD5.8 billion. According to investment promotion project of the State, foreign investment volume has been expected to be USD5.8 billion by the MIC year on year until 2020-2021FY. Moreover, foreign investment volume has been expected to be USD5.8 billion from 2021-2022 to 2025-2026FY as well. With such expectations, investment volume will increase and businesses will develop. At the same time financial flow will be smooth and secure and then the YSX’s share trading will make progress.

The YSX started on 25 March in 2016 has been in operation for more than four years. The FMI, the MTSH and the Myanmar Citizens Bank and the First Private Bank became YSX listed companies within one year of its birth. The share volume among these four listed companies reached 3.6 million and was valued at K800 billion within one year. At such a time, the YSX is planning to invite the public to the share trading encouraging profitable State-owned businesses to participate in the stock exchange. This move will be able to make the share price go down, thereby revitalizing slow-running YSX livelier than now. A Japanese company named Daiwa Securities suggested that Myanmar government should privatize State-owned businesses and encourage them to participate in the YSX.

The share volume in the hands of YSX listed companies reached more than 300,000 with 33,000 people opened bank accounts. The share trading is now running slow affected by the Covid-19 pandemic, but share prices are not expected to be going down too much. The FMI stood at K9,900 on closing market price chart, the MTSH at K3,700, the MCB at K8,000, the FPB at K22,500, the TMH at K2,700 and the EFR at K3,050 respectively. The YSX’s share trading went on to some degree despite Covid-19 crisis. The share trading of some listed companies went well but some didn’t. The share value for the whole month of August stood at K47 million. The YSX Expo that is held every year was held via online in order to avoid crowds as the Covid-19 cases were still going on.

When taking a look at share trading throughout the year, the share trading valued at K72 billion in 2016, K29 billion in 2017, K14 billion in 2018 and K14.5billion in 2019. When reviewing the share trading on the YSX, it is like running slow. The YSX allowed foreigners to own 32 % to the listed companies. The share trading did not become brisk as expected although it went well. At such a time, the stock market is expected to be better in the post period of Covid-19. Some State-owned businesses should be changed into public ones and they should be YSX listed ones. If investments and businesses enormously increased, the stock share trading would develop a lot, attracting the attention of local and foreign investors. 

Source: The Global New Light of Myanmar


Myanmar aims to hit FDI target despite higher uncertainty this year

Foreign investors are still keen to invest in Myanmar despite COVID-19, even though a number are holding back due to the uncertainty surrounding the investment environment in the country, according to U Maung Maung Lay, Vice President of the Union of Myanmar Federation of Chamber of Commerce and Industry (UMFCCI). Many foreign investors want to expand their businesses here but there is no certainty for growth and returns at this point. It is very difficult for growth and returns at this point. It is very difficult for them to invest during the COVID-19 period.

This is because of travel restrictions imposed to control imported cases of the virus, under which international flights have not been allowed to land in Myanmar since March. It has not been possible for potential investors to enter the country to conduct the surveys and negotiations needed to make concrete investment decisions and as a result, the Myanmar economy has halved in the six months since the pandemic was announced. Garment manufacturers, which contributes significantly to Myanmar’s exports to Europe, Korea and Japan, have been affected, while 80 percent of the construction sector is now facing various challenges from pricier imports of construction materials to the inability to continue developing ongoing projects.

Local businesses have also been affected by declining demand and many are also unable to procure raw materials from China to continue operations. Myanmar has so far received 24 foreign investment proposals worth US$3.5 billion for fiscal 2020-21. Most of the proposals were submitted to the Myanmar Investment Commission (MIC) in fiscal 2019-2020, however, due to the large capital amounts involved, the projects require MIC permits before getting the green light to proceed. The MIC has to consider the possible impact on the environment and local communities before giving approval. In any case, the MIC intends to reach its foreign direct investment (FDI) target of US$5.8 billion for the current fiscal year. It will priorities investments in agriculture, healthcare, industrial and digitization. Myanmar fell short of the FDI target of US$5.8 billion in fiscal 2019-2020 due to COVID-19.

Source: Myanmar Times

images (7)

MoTC further extends international flight ban to end-Nov

The effective period of the Temporary Measures to Prevent Importation of COVID-19 to Myanmar through Air Travel issued on 29 March 2020 by the Ministry of Health and Sports was extended up to 31 October 2020, 23:59 hours Myanmar Standard Time, in line with the approval of the National Level Central Committee on Prevention, Control and Treatment of COVID-19.

In order to continue to contain the spread of COVID-19 in Myanmar effectively, the existing period has been further extended, in accordance with the approval of the National-Level Central Committee for Prevention, Control and Treatment of COVID-19, until 30 November 2020, 23:59 hours of Myanmar Standard Time.

Source: The Global New Light of Myanmar


Announcement on Extension of the Precautionary Restriction Measures Relating to Control of the COVID-19 Pandemic until 30 November 2020

  1. With a view to the further strengthening of measures to contain the spread of the COVID-19 pandemic, the Ministry of Foreign Affairs of the Republic of
    the Union of Myanmar has issued the following announcements regarding temporary entry restrictions for visitors from all countries. All those restrictions were
    extended until 31 October 2020 by the Ministry’s announcement dated 28 September 2020.
    (a) Announcement dated 15 March 2020 regarding precautionary measures for all travellers visiting Myanmar;
    (b) Announcement dated 20 March 2020 regarding additional precautionary measures for travellers visiting Myanmar and temporary suspension of
    issuance of visa on Arrival and e-visa;
    (c) Announcement dated 24 March 2020 regarding additional precautionary measures for travellers from all countries visiting Myanmar;
    (d) Announcement dated 28 March 2020 regarding temporary suspension of all types of visas (including social visit visas) and visa exemption services.
  2. In order to continue its effective response measures to protect the population of the country from the risks of importation and spread of the COVID-19, the
    Government of the Republic of the Union of Myanmar has decided to extend the afore-mentioned entry restriction measures until 30 November 2020.
  3. In case of urgent official missions or compelling reasons, foreign nationals, including diplomats and United Nations officials, who wish to travel to Myanmar
    by available relief or special flights, may contact the nearest Myanmar Mission for possible exception with regard to certain visa restrictions. However, all visitors
    must abide by existing directives issued by the Ministry of Health and Sports relating to the prevention and control of the COVID-19 pandemic.

Source: The Global New Light of Myanmar


Construction work resumes, under strict conditions

Many construction projects in the Yangon Region have resumed after being given the all clear from the government, but have been reminded to follow the Ministry of Health and Sports’ guidelines. Construction companies which do not abide by the ministry’s instructions will be shut down, according to an announcement by the Yangon Region Construction Inspection Committee. Companies will also need to report to the committee to verify that the construction work is being carried out in line with the ministry’s order. This includes providing photos, showing that the work does not contravene the government’s 18 rules.

10 percent of the construction companies needed to resume work urgently, and they have been able to resume this month with the government’s permission. They will allow more companies to resume when the sites have been inspected. Over 300 businesses have applied for permission to resume work, and most are still waiting on a response from the Region Government. According to the nature of construction work, some projects cannot be halted for any length of time and it is important that they be allowed to resume.

Some businesses owners also suggested that constructions sites are relatively safe environments, where there are low rates of transmission as workers live onsite in isolated dorms. Yangon construction sites were forced to close on September 28 after the government announced the city-wide stay-at-home order, leaving companies and staff little time to secure equipment and protect sites from damage caused by wind and rain. According to an announcement on October 10, works that meet regulation guidelines can resume with the region’s permission starting October 12.

Source: Myanmar Times


20 containers of seafood stranded at Saudi port

Around 20 Myanmar containers with marine products are still stranded at Saudi Arabia’s Jeddah port while the Saudi Arbia Food& Drug Authority (SFDA) makes arrangements to approve a list of Myanmar fisheries factories from where the products were processes, according to U Ye Min, a Central Executive Committee member of the Myanmar Fisheries Federation.

The goods have been at the port since October 13, when Saudi Arbia seized around 30 unregistered containers loaded with US$80,000 worth of Myanmar fisheries products each. A total of ten containers have received cleared customs after the SFDA approved three of 19 factories which sought permission to sell their products in Saudi Arabia. There are still about 20 containers at Jeddah port which are not registered and approved by the SFDA yet.

This year, only Ywar Thar Gyi Cold Store, one of 19 cold storage factories from Myanmar which applied for registration, was approved by Saudi authorities. On October 15, the SFDA approved Twin Brothers Seafood Cold Storage, Mega Marine Frozen Seafood and Delta Queen International Co.

Source: Myanmar Times

images (6)

China demand drives sesame prices up in Oct

The prices of sesame seeds significantly rose in October on the back of China’s strong demand, said traders from Mandalay market. The price of white sesame increased from over K1.5 million to K1.66 million per tonne compared to September’s rate, while brown sesame price also jumped to K1.45 million per tonne in October, which is nearly up by K200,000 per tonne against last month. The price of black sesame seeds is flat at over K2.7 million per tonne for the two consecutive months. Last year, sesame seeds were priced at K2.13 million per tonne for white sesame, K1.94 million per tonne for brown sesame and K3.6 million per tonne for black sesame, as per market data updated by Myantrade online. This year, the sesame prices drop by over 20 per cent compared with the prices in the previous years due to the COVID-19 negative impacts.

Consequently, the growers do not make a large profit this year, a trader from Mandalay market stressed. Typically, Myanmar exports about 80 per cent of sesame production to foreign markets. China is the leading buyer of Myanmar sesame, which is also shipped to markets in Japan, South Korea, China (Taipei), UK, Germany, the Netherlands, Greece, and Poland among the EU countries. The EU markets prefer organic-farming sesame seeds from Myanmar, said an official from the Trade Promotion Department. Japan prefers Myanmar black sesame seeds, cultivated under good agricultural practices (GAP), and purchases them after a quality assessment. Black sesame seeds from Myanmar are also exported to South Korea and Japan. Meanwhile, China buys various coloured sesame seeds from the country. This year, Japan has not purchased Myanmar’s sesame yet.

Sesame is cultivated in the country throughout the year. Magway Region, which has gained a reputation as the oil pot of Myanmar, is the primary producer of sesame seeds. The seeds are also grown in Mandalay and Sagaing regions. Of the cooking oil crops grown in Myanmar, the acreage under sesame is the highest, accounting for 51.3 per cent of the overall oil crop plantation. The volume of sesame exports was registered at over 96,000 tonnes, worth $130 million, in the financial year 2015-2016; $100,000 tonnes, worth $145 million, in the 2016-2017FY; 120,000 tonnes, worth $147 million, in the 2017-2018FY; 33,900 tonnes valued $43.8 million in the 2018 mini-budget period, and 125,800 tonnes, worth $212.5 million in the 2018-2019FY, the trade data of Central Statistical Organization indicated.

Source: The Global New Light of Myanmar


Manufacturing sector attracts 188 foreign enterprises last FY

Majority of foreign enterprises eye the manufacturing sector for investments in the past financial year 2019- 2020, pulling in US$1.128 billion from 188 projects, the Directorate of Investment and Company Administration’s statistics indicated. Of 245 foreign enterprises permitted and endorsed by Myanmar Investment Commission and the respective investment committees between 1 October and 30 September of the last FY, 188 enterprises pumped FDI into the manufacturing sector. However, the quantum of investment in power is higher than in any other sectors. Power sector topped $1.67 billion from eight enterprises.

The agricultural sector has attracted $17.73 million from three projects. The livestock and fisheries sector has drawn five foreign investment projects worth $138.48 million. Two projects worth $300.454 million have been approved in the transport and communications sector. The hotels and tourism sector has pulled in the investment of $53.342 million from five foreign enterprises. The real estate sector has also pulled 1.115 billion from eight foreign projects, while industrial estate sector received $273.49 million from two enterprises. Over $469 million of FDI has been pumped into the other services sector from 29 businesses. At present, the labor-intensive enterprises are facing financial hardship, disputes between the employers and employees and the closure of factories. However, those cases in the industry did not hinder new investments.

The manufacturing enterprises and businesses that need large labor force are prioritized. MIC is endeavoring to clear those kinds of projects so fast that they can start running in the post-COVID-19 period, the DICA official said. Moreover, MIC has shown readiness to accept the projects regarding the production of mask, pharmaceuticals and medical equipment, in responding to the activities of prevention, control and treatment of COVID-19. Myanmar attracted foreign direct investments of more than US$5.68 billion between 1 October and 30 September in FY2019-2020, including the expansion of capital by existing enterprises and acquisitions in the Special Economic Zones, according to the Directorate of Investment and Company Administration (DICA).

Source: The Global New Light of Myanmar


24 projects with $ 3.5 billion in foreign investment have been proposed to MIC for the 2020-2021 fiscal year

For the 2020-2021 fiscal year, 24 projects with $ 3.5 billion in foreign investment have been proposed to the Myanmar Investment Commission (MIC), according to the Directorate of Investment and Company Administration (DICA). For the next year, they have 24 proposals that the Investment Commission has to consider and then discuss the need. The value of the 24 proposals is estimated at US $ 3.5 billion. These businesses are huge because they are not available at this time.

There may be issues that may be of interest to the state next time, and there are sections that assess the needs of the state. Relevant ministries have to negotiate. After the relevant ministries, the decision must be made after submitting to the higher committees of the relevant ministries. For some countries, investment will be huge. It could also have an impact on the country. The land area is large. If the amount of investment is large, it should be submitted to the government It has to be decided. Due to such activities, this year’s target has not been achieved. The 24 investment proposals are over $ 3 billion. It is in this pipeline for the first month of the next fiscal year 2020-2021.

Due to COVID-19, some businesses were allowed to enter due to traffic restrictions, but were not allowed to do so, leading to a decline in Myanmar’s foreign investment target for the 2019-2020 fiscal year. In the 2019-2020 fiscal year, foreign investment in Burma was projected at $ 5.8 billion, but only $ 5.68 billion came in. However, in the context of COVID-19, investors have limited access; Some businesses are planning to enter but have not yet done so due to traffic congestion, as most of the government offices are located in Rangoon and Naypyidaw. According to Myanmar’s investment promotion plan, foreign investment is expected to reach $ 8.5 billion from the 2021-2022 fiscal year, but these targets will be reconsidered due to the COVID-19 outbreak.

Source: Daily Eleven

download (4)

Hong Kong investors eye new opportunities in Myanmar

HONG KONG business and those already present in Myanmar expressed a keen interest in Myanmar’s significant investment potential including areas as diverse as energy, transport, banking and finance, retail and services during a recent webinar organized by the Myanmar-Hong Kong Chamber of Commerce and Industry. As a guest of honour delivering a keynote address, U Thaung Tun, Union Minister for Investment and Foreign Economic Relations, highlighted Myanmar’s enviable geographic position as: “…a strategic land bridge, connecting two of the world’s largest regional economies, those of South and South East Asia, we also wish to play a greater connecting role – connecting East and West – from the Mid-East to the Mekong!” The Union Minister also referred to ongoing challenges posed by COVID-19 noting that: “…today the IMF forecasts Myanmar’s growth at closer to 2 per cent – still placing us amongst a small handful of nations who will post positive growth this year. Thankfully, most forecasts suggest our rapid return to pre-crisis growth of 6 per cent plus in 2021.”

The Union Minister together with panellists, including Memories Group CEO Mr Cyrus Pun, Cycle & Carriage Hong Kong investors eye new opportunities in Myanmar Myanmar General Manager Mr Adrian Short, and Mr Edgar C P Kwan, Marga Group Chief Development Officer were in firm agreement that such growth could be achieved via increased and diversified investment in maritime infrastructure, roads, rail, urban housing, border cooperation zones, agriculture, technology, cyber and clean energy projects amongst many others. Despite current sluggish global growth and general uncertainty, Mr Edgar C P Kwan expressed optimism that the coming year will bring forth further opportunities for Myanmar, highlighting in particular, investment opportunities in Myanmar’s energy, real estate and manufacturing services sector, while noting that the continued expansion of a world-class services industry will also help to further facilitate Myanmar’s broad-based and inclusive development, Memories Group CEO Mr Cyrus Pun enquired as to what steps had been taken to cut through red tape and to lower administrative hurdles faced by investors, to which the Minister replied noting the launch of the Myanmar Companies Online (MyCo) company registration platform, the recent launch of an online tax payment system in Yangon, as well as the continued development of Standard Operating Procedures across all administrative units within the Ministry of Investment and Foreign Economic Relations as clear signs of progress being made.

With examples on offer such as the recent successful West Yangon Industrial Park competitive tender launch, the successful conclusion of international tendering for 30 solar power projects, and the recent approval of a new Thilawa LNG-to-Power project – amongst Myanmar’s largest and equal to one-fifth of the country’s current power generation capacity – the Minister noted how continued investment in Myanmar’s energy sector will unlock further flown investment in other sectors, generating new jobs for a young population while ensuring the government keeps its commitment to electrifying the nation by 2030. The Union Minister also drew attention to the upcoming launch of the Myanmar Economic Recovery and Reform Plan (MERRP), clarifying its role as an interim reform-oriented measure, a natural successor to the shorter-term COVID-19 Economic Reform Plan (CERP), that will be used to ensure remains on track toward achieving the MSDP once the COVID-19 pandemic subsides. Noting the reputation Hong Kong investment has garnered as responsible and of high quality, the Minister emphasized that Myanmar welcomes responsible, quality investment from wherever it may come and remains committed to providing a level playing field for all responsible investors seeking to do business, or to explore greener pastures in Myanmar.

Source: The Global New Light of Myanmar