CBM directs local private banks to buy sailor’s foreign wages at maximum rate

The Central Bank of Myanmar (CBM) has directed local private banks to purchase the sailors’ foreign wages that are directly paid to their designated bank accounts at the maximum rate, as per the statement of the Myanmar Seafarers Federation (MSF). MSF’s statement mentioned that the CBM released the directives concerning the use of foreign currency in late August. Myanmar seafarers need to realize those directives. Afterwards, the seafarers are also entitled to use their foreign wages in their own ways.

According to the discussion between the MSF and United Amara Bank and Ayeyawady Bank, a sailor can open a special account and foreign currency accounts together with his partner or his family member with whom he wants to pool his financial resources if he transfers his foreign income to Myanmar. A beneficiary can legally manage bank accounts when a sailor is out of the country. That co-owner can open more bank special accounts at the available branches and withdraw money. The private banks are directed to purchase the sailor’s foreign wages that came into the bank account at the daily highest rates of the banks, MSF stated.

Additionally, the seafarer is allowed to sell his foreign wages from his bank account to others. Yet, he must transfer money to another party within 21 days of deposit. Furthermore, they can also make foreign remittances for their personal cases such as supporting their children studying abroad or going abroad for medical treatment after reporting to and seeking approval of the authorities concerned through the bank. As a result of this, seafarers can receive a high exchange rate for local currency only when they put their foreign income into local banks. If they directly withdraw Kyat through regional agents in their own ways, the federation is uncertain about the amount of money that will be exchanged, as per the MSF’s statement. The CBM set the reference exchange rate of a US dollar at K2,100, yet a dollar hit approximately K3,300 in the black market. 

Source: The Global New Light of Myanmar

Edible oil dealers speculate on price movements in Yangon market

Edible oil dealers told the Global New Light of Myanmar (GNLM) that there might be changing market conditions in Yangon edible oil market in early September 2022. At present, the prices of peanut oil, sesame oil and sunflower oil are surging. The palm oil prices stayed between K8,500-K9,700 per viss. In the second week of September, the prices of palm oil slid to K8,500-K8,600 per viss. Traders speculated on further drop in prices. The palm oil reference price in Yangon fell to the lowest of K3,525 per viss in early August. Thereafter, the price gradually went up according to the reference rates issued on a weekly basis. The reference price touched a high of K5,220 for a week ending 11 September.

The reference price for a week from 13 to 19 September is still not revealed on 11 September. However, the prices of palm oil in the wholesale market drastically dropped. On 11 September, the palm oil was priced at K8,500-K8,600 in wholesale markets. They are sold at K8,000 only at oil tanks, citing the market reports. Therefore, there is a price difference of K2,800 between the reference price and the prices set by distributors. There is also a large gap between the reference price and the wholesale price. On 12 August, the wholesale price K8,600 per viss was around K5,000 higher than the reference price K3,525. At that time, the main distributors offered the same price as the reference price although it was hard to buy the palm oil.

In early August, the mobile market trucks with subsidized price schemes sold the palm oil at only K3,700 per viss while the wholesale price was estimated at K8,600 per viss. Some unscrupulous businesspersons resold them with a profit of K1,500-K2,000. Some fried food businesses bought the edible oil from those sellers as they are K1,500-K2,000 cheaper than the wholesale prices. It is a win-win situation for both parties, Daw Hla Mu, a fritter seller from Kamayut Township, told the GNLM. The consumers are anticipating the changing market conditions. In the previous months, the mobile market trucks sold them at the cheaper rate yet there is a limited supply and quo

ta. The wholesale price is about K4,000 higher than the reference price, Ko Myint Lwin, a trader who delivers palm oil to other regions and states from Nyaungpinlay and Bayintnaung markets, told the GNLM. The wholesale price is doubled compared to the reference price. Majority of the consumers cannot get access to the subsidized scheme of mobile market trucks. They are forced to buy the palm oil at around K10,000 per viss, the GNLM quoted Daw Khaing who lives at a dormitory in Hlinethaya Township, as saying. As the price movement is likely to happen in the coming days, traders do not make a big purchase when the price is decreasing. The consumers also expect to see palm oil and vegetable oil bottles in the shelves of city marts.

Source: The Global New Light of Myanmar

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Agricultural export value tops over $1.5 bln over five months

The value of agricultural exports amounted to US$1.51 billion between 1 April and 2 September in the current financial year 2022-2023, indicating a small increase of $27.28 million as against the year ago period. The figures topped $1.48 billion in the corresponding period last year. Myanmar agricultural products are exported to China, Thailand, Singapore, Malaysia, the Philippines, Bangladesh, India and countries in Europe and African countries.

The country shipped rice, corn, chili pepper, rubber, mango, various beans and pulses to the external markets through border posts and sea trade. The country requires specific export plans for each agricultural product, as they are currently exported to external markets based upon supply and demand. The G to G pact also ensures a strong market for the farmers. Contract farming systems, involvement of regional and state agriculture departments, exporters, traders, and some grower groups, are required in order to meet production targets, the Agriculture Department stated.

According to a Memorandum of Understanding between Myanmar and India, India will annually import 250,000 tonnes of black gram and 100,000 tonnes of pigeon peas (tur) from Myanmar for five consecutive years from 2021-2022 financial year to 2025-2026 FY. The Commerce Ministry is endeavouring to help farmers deal with challenges such as high input costs, procurement of quality pedigree seeds, high cultivation costs, and erratic weather conditions. Myanmar Rice Federation (MRF) invited rice companies and millers who want to participate in the contract farming system in the coming summer paddy season.

The Ministry of Agriculture, Livestock and Irrigation is supervising to implement contract farming system on 850,000 acres of summer paddy in the 2022-2023 season, provide payment-in-kind (seeds, fertilizer and diesel) instead of cash and the summer paddy growers will be entitled to receive K200,000 worth of payment-in-kind per acre through Agriculture Development Fund. This plan aims to boost the paddy yield through the support of agricultural inputs (fertilizer, seeds and others) and conduct supply chain financing strategy connecting the farmers, millers and companies, according to the MRF’s statement. Myanmar’s agriculture sector is the backbone of the country’s economy and it contributes to over 30 per cent of Gross Domestic Products. The country primarily cultivates paddy, corn, cotton, sugarcane, various pulses and beans.

Source: The Global New Light of Myanmar

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10 Singapore-listed enterprises put FDI of over $1 bln in Myanmar as of 31 Aug

Ten Singapore-headquartered enterprises pumped foreign direct investments of US$1.089 billion into Myanmar in the past five months (April-August) of the current financial year 2022-2023, the Directorate of Investment and Company Administration’s statistics showed. Singapore companies mainly put investments into urban development, real estate, power and manufacturing sectors. Also, Qatari telecommunication company Ooredoo has signed an agreement to sell its Myanmar unit to a Singapore-based firm.

Hong Kong SAR stood as the second largest investor this FY with an estimated capital of over $70.239 million drawn by seven projects. China is ranked third in the investment line-up with more than $56.7 million from 15 projects. One enterprise each from Brazil, Japan and China (Taipei) also made investments in the past four months respectively. The existing enterprises from China (Taipei), China, Hong Kong SAR, the Republic of Korea, India and Thailand also increased investments.

Myanmar Investment Commission gave green light to 35 foreign projects, with an estimated capital of $1.23 billion during the April-August period, DICA’s statistics indicated. Those enterprises are to execute in agriculture, manufacturing, power, real estate and service sectors respectively. Myanmar has attracted foreign direct investment of more than $647.127 million from 49 enterprises in the past mini-budget period (October 2021-March 2022), according to the statistics released by the DICA.

Singapore stood as the largest foreign investor in Myanmar in the previous years, pulling in the FDI of $1.85 billion in the FY2019-2020, $2.4 billion in the FY2018-2019, $724.4 million in the mini-budget period (April-September, 2018), $2.16 billion in the 2017-2018FY, $3.8 billion in the 2016-2017FY, $4.25 billion in the 2015-2016FY, $4.29 billion in the 2014-2015FY, $2.3 billion in the 2013-2014FY and $418 million in the 2012-2013FY respectively. Additionally, Singapore emerged as the second-largest foreign investor in the Thilawa Special Economic Zone after a top investor, Japan.

Source: The Global New Light of Myanmar

Ooredoo Myanmar to be sold to Singapore company for US$576 million

Ooredoo (Myanmar), a telecom operator in Myanmar, is to be sold to Singapore-based Nine Communications Pte Ltd for $576 million, announced on the Ooredoo website. In addition to the business value, the company will receive a total equity value of $162 million, according to the announcement.

At present, the board of directors has agreed, and the transaction will be carried out in line with Myanmar’s procedures. It is also reported that Ooredoo Myanmar, which is the third largest telecommunication operator in Myanmar, had around 15 million users by 2020.

Ooredoo shares rose 4.6 per cent in the market after news of the transaction was announced and departmental approval was in a pending stage. The increase is the highest one in Ooredoo’s share value since mid-August last year, according to Bloomberg News.

Source: The Global New Light of Myanmar

Equities market records highest trading value in Aug

The equities market sees the highest trading in August 2022 with 109,809 shares worth K370 million, the Yangon Stock Exchange’s monthly price data indicated. The stock trading value of seven listed companies on the Yangon Stock Exchange (YSX) amounted to K246.9 million with 72,843 shares in July, the Yangon Stock Exchange’s monthly price data indicated.

Trading of 61,435 shares valued at K282 million was recorded on the exchange in January 2022 and the trading volume rose to 80,291 shares in February, with an estimated value of K414.9 million. A total of 52,408 shares with an estimated value of K233.634 million were traded on the exchange in March. The trading value slightly rose to K276 million with 53,059 shares traded on the exchange in April. The equities market saw K314 million worth 55,024 shares traded in May and K200.63 million worth 40,062 shares in June, according to the monthly report of the YSX.

At present, shares of seven listed companies — First Myanmar Investment (FMI), Myanmar Thilawa SEZ Holdings (MTSH), Myanmar Citizens Bank (MCB), First Private Bank (FPB), TMH Telecom Public Co. Ltd (TMH), the Ever Flow River Group Public Co., Ltd (EFR) and Amata Holding Public Co., Ltd. (AMATA) were traded in the equity market. The share prices per unit were closed at K7,300 for FMI, K2,450 for MTSH, K6,800 for MCB, K18,000 for FPB, K2,300 for TMH, K2,450 for EFR and K4,900 for AMATA respectively in August. Regardless of the collapse of the stock markets worldwide, the local equity market has been able to continue operating without stopping trading.

Additionally, YSX launched a pre-listing board (PLB) on 28 September 2020 in order to provide unlisted public companies with fund-raising opportunities and build a bridge toward listing on YSX. Next, the Securities and Exchange Commission of Myanmar (SECM) has allowed foreigners to invest in the local equities market since 20 March 2020. The YSX was launched four years ago to improve the private business sector. It disseminates rules and regulations regarding the stock exchange and knowledge of share trading through stock investment webinars and training courses.

Source: The Global New Light of Myanmar 

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Fuel oil prices stable on high trend

Fuel prices remained constant on the high side, according to the fuel oil market. The prices slipped at the end of August. Then, the price stayed stable on the high side between 3 and 5 September. The prevailing fuel prices stood at K2,395 per litre for Octane 92, K2,495 for Octane 95, K3,125 for premium diesel and K3,040 for diesel. Kyat depreciation against the US dollar is a contributing factor to the price rise. The Central Bank of Myanmar set the reference exchange rate for a dollar at K2,100, whereas the exchange rate against the US dollar hit around K3,500 in the grey market.

The Supervisory Committee on Oil Import, Storage and Distribution of Fuel Oil stated that domestic fuel prices are following the price index set by Mean of Platts Singapore (MOPS), the pricing basis for many refined products in southeast Asia. The committee is governing the fuel oil storage and distribution sector effectively not to have a shortage of oil in the domestic market and ensuring price stability for energy consumers. The Petroleum Products Regulatory Department, under the guidance of the committee, is issuing the daily reference rate for oil to offer a reasonable price to energy consumers.

The reference rate in Yangon Region is set on the MOPS’ price assessment, shipping cost, premium insurance, tax, other general cost and reasonable profit per cent. The rates for regions and states other than Yangon are evaluated after adding the transport costs and the retail reference rates daily cover on the state-run newspapers and are posted on the media and official website and Facebook page of the department daily starting from 4 May. As per the statement, 90 per cent of fuel oil in Myanmar is imported, while the remaining 10 per cent is produced locally.

The domestic fuel price is highly correlated with international prices. The State is steering the market to mitigate the loss between importers, sellers and energy consumers. Consequently, the government is trying to distribute the oil at a reasonable price compared to those of regional countries. Some countries levied higher tax rates and hiked oil prices than Myanmar. However, Malaysia’s oil sector receives government subsidies and the prices are about 60 per cent cheaper than that of Myanmar. Every country lays down different patterns of policy to fix the oil prices. Myanmar also poses only a lower tax rate on fuel oil and strives for energy consumers to buy the oil at a cheaper rate. 

Source: The Global New Light of Myanmar

Domestic gold prices fall over gold coin sales news

According to market reports, domestic gold prices are falling due to the announcement that gold coins will be sold.

The reference price statement of the Yangon Region Gold Entrepreneurs Association mentioned that for the first time this year, the reference price dropped below K2 million per tical.

The Ministry of Natural Resources and Environmental Conservation issued a press release on 1 September 2022, saying that it plans to sell gold coins weighing one tical, 0.5 tical, and 0.25 tical respectively.

Following the announcement, the Yangon gold market index reached K1,996,000 per tical on 2 September 2022. The price of one tical was over K3 million in the market. 

Source: The Global New Light of Myanmar

Kyat stands around K3,500 in FX market despite CBM reference rate of K2,100

According to foreign currency dealers, the central bank’s reference remittance rate is set at K2,100 per US dollar, but in the foreign exchange market, it is around K3,500 per dollar. The Central Bank of Myanmar has issued a statement to set the foreign currency exchange rate within the Central Bank reference rate ± 0.3% starting from 10 August. Therefore, those related to the dollar business, including exchange counters and banks, set the buying price of one dollar at K2100 and the selling price at K2,106.

Although, in the external market, the buying price of one dollar was around K3,400 and the selling price was around K3,500 on 3 September. In the last few days, the foreign market rose to more than K4,500 per dollar, while the domestic gold price rose to a record high of K37,000,000 per tical. Therefore, the Central Bank of Myanmar has been selling dollars to sectors that need US dollars through foreign exchange bidding to control the increase in dollar prices. In 2021, the Central Bank of Myanmar sold $443.8 million in a foreign currency competitive auction.

At the end of September last year, when the local currency market rose to a record high of over K3,000 per US dollar, the domestic gold price rose to a record high of K2,220,000 per tical. Therefore, the Central Committee on Ensuring Smooth Flow of Trade and Goods is working to ensure that there are no delays or difficulties in domestic and foreign trade activities. As the stability of the gold and currency markets is very important, it aims to support the activities of the central committee on the one hand.

Under the command of the central committee, the gold and currency market will be monitored to ensure the stability of domestic gold and currency prices. The Monitoring and Steering Committee on the Gold and Currency Market was established on 17 December 2021. The task of the committee is to speculate on the local gold market, look into transaction lists as necessary to verify and identify purchases, check whether the rules of payment issued by the Central Bank of Myanmar are followed and take action under the existing laws, rules, regulations, orders and directives. Relevant officials will identify and take effective actions over illegal holders of foreign currencies and illegal traders and market players. 

Source: The Global New Light of Myanmar

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Trade Dept notifies exporters of payment for terminal handling charge, inspection cost, commission from 35% of export earnings

The Trade Department under the Ministry of Commerce has notified on 29 August that exporters have to pay terminal handling charges, inspection costs and commission from 35 per cent of export earnings. They must pay them 35 per cent of export earnings. They do not need to request approval from the Foreign Exchange Supervisory Committee (FESC) regarding this case, according to the committee’s meeting (43/2022). Therefore, the Republic of the Union of Myanmar Federation of Chambers of Commerce and Industry has notified the related associations of the directive of the FESC.

Regarding the relaxation of the procedure, the shipping process is expected to go smoothly. However, as they must pay 35 per cent of export earnings, the amount of dollars they can sell themselves has become lower, the Myanmar Enterprise Solutions posted on its Facebook Page. According to the CBM’s notification dated 5 August 2022, exporters have to convert only 65 per cent of the hard currency they earned into local currency within one working day.

The CBM issued a statement dated 16 August 2022 that exporters can use 35 per cent of export earnings or sell them to authorized dealers (banks) or make remittances to others. Regarding foreign accounts of the exporters at the banks, 65 per cent of earnings must be exchanged for local currency within one working day. Banks must conduct transactions from the remaining 35 per cent for the use of exporters or remittances or selling them onto ADs, and those entities (companies, institutions and individuals) must sell them to the ADs or use themselves within 30 days of earnings. Exporters must seek the approval of the Foreign Exchange Supervisory Committee to carry out cross-border transactions. 

Source: The Global New Light of Myanmar