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Gold demand down in domestic market

As the gold price is too fast to spike yet slow to fall in the domestic market, there are more sellers than buyers, said U Myo Myint, Chair of the Yangon Region Gold Entrepreneurs Association (YGEA). The daily transaction of 50 visses (a viss equals 1.6 kilogrammes) of gold are seen in the market. However, sellers outnumber buyers in recent days.

“Gold shops are buying approximately 50 visses of the gold transaction rather than selling these days, unlike the past trading,” U Myo Myint was quoted as saying. Additionally, Kyat devaluation against the US dollar is another reason for the price hike in the domestic gold market, he added. The global gold price stands at US$1,836 per ounce. The US dollar exchange rate is approximately K1,990 in the local forex market at present.

Meanwhile, the pure gold fetches up to K1,880,000 per tical (0.578 ounce, or 0.016 kilogramme). The gold price rally is likely to continue in the coming months. Only if the global gold price slides and Kyat appreciates on the US dollar can the domestic gold price fall, U Myo Myint shared his opinion. The domestic gold price is highly correlated with the international market. Last 28 September 2021, a dollar value hit an all-time high of over K3,000 in the black market and consequently, the pure gold reached a record high of K2.22 million per tical in history.

Source: The Global New Light of Myanmar

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CBM sells $15 mln at FX auction rate on 20 January

The Central Bank of Myanmar (CBM) sold US$15 million at its FX auction on 20 January 2022, bringing a total number of sales of $65 million in January five times, according to a statement of the CBM. The Central Bank of Myanmar sold $15 million each on 7, 12 and 20 January and $10 million on 13 and 14 January.

According to monthly purchases and sales of US dollars from January to December in 2021, the CBM sold $6.8 million in February 2021, a foreign exchange auction, but did not sell in March., The CBM sold also $12 million in April, $24 million in May, $12 million in June, $39 million in July, $28 million in August, $63 million in September, $110 million in October, $31 million in November and $118 million in December.

The CBM is conducting an auction for foreign exchange to reduce the fluctuation of foreign exchange rates in a short-term period and fulfilling the needs of foreign exchange reserves. Rules and directives have been set out for the CBM’s auctions. Following these rules and directives, the CBM is trading the foreign currency with three State-owned banks, 19 local private banks and 13 foreign banks, which are holding authorized dealer-AD licences. This CBM’s move is aimed at governing the market volatility and strengthening the local currency value.

Source: The Global New Light of Myanmar

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Foreigners hold over 4.48 mln shares in equity market as of 19 January

Foreign investors have purchased over 4.489 million shares of four listed companies on the Yangon Stock Exchange (YSX) so far, according to statistics released by the exchange. The Securities and Exchange Commission of Myanmar (SECM) has allowed foreigners to invest in the local equity market from 20 March 2020. At present, shares of six listed companies — First Myanmar Investment (FMI), Myanmar Thilawa SEZ Holdings (MTSH), Myanmar Citizens Bank (MCB), First Private Bank (FPB), TMH Telecom Public Co. Ltd, Ever Flow River Group Public Co., Ltd (EFR) and Amata Holding Public Co., Ltd (AMATA) — are available for local investors for trading. Foreigners invest in FMI, MTSH, TMH and EFR on the exchange. FPB is for block trade only. The foreign investors are about to reach the upper limit of 14 per cent for shareholding with FMI and consequently, the status of buy order acceptance is suspended for now. The foreign shareholding ratio of the companies on the exchange, except FMI, is less than one per cent.

As of 19 January 2022, foreigners hold over 4.45 million shares of FMI, over 27,897 shares of MTSH, 5,445 shares of TMH and 3,002 shares of EFR, YSX’s statistics indicated. The SECM, under the Ministry of Planning and Finance, issued a notice on 12 July 2019, announcing that foreigners would be allowed to invest in shares listed on the YSX. After opening bank and securities accounts, an investor can send buying/selling orders under the stock trading rules stipulated in the Trading Business Regulations, the SECM notified. Foreign participation would entail better capital inflows, long term and sustainable investment, encourage good corporate governance, and support market orientation, YSX stated. Regarding share trading, foreign investors must strictly comply with the rules stipulated by the Central Bank of Myanmar. The security companies will monitor the daily trades of foreigners, in keeping with the rules and regulations, so that they do not exceed the limit set for each listed company.

Under Section 42 (a) of the Securities and Exchange Law and Section 4 of the Trading Participant Business Regulations, the YSX has granted trading qualifications to the following securities companies —Myanmar Securities Exchange Centre Co. Ltd. (MSEC), KBZ Stirling Coleman Securities Co. Ltd. (KBZSC), CB Securities Limited (CBSC), AYA Trust Securities Co. Ltd. (AYATSC), KTZ Ruby Hill Securities Co. Ltd. (KTZRH), and UAB Securities Limited (UABSC).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 the exchange, YSX stated. 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 seminars. The stock exchange has also sought the government’s support to get more public companies to participate in the stock market and help more institutional investors, such as financing companies, investment banks, and insurance companies, to emerg.

Source: The Global New Light of Myanmar

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Telegraphic Transfer system permitted for gold transaction below US$50,000

The international remittance for gold transaction valued at below US$50,000 is allowed to use Telegraph Transfer (TT) system, said U Myo Myint, Chair of the Yangon Region Gold Entrepreneurs Association. This move will revive gold export market, he continued. “Traders are no longer face hurdles in gold export. They are prepping for export. The goldsmith businesses also resume their operations. Transportation agents also embark on export procedures,” he was quoted as saying. Nevertheless, the transaction worth above $50,000 can be done only with Letter of Credit (LC).

Those who want to export gold can inquire the procedures at the One-Stop Service Centre. They can also request the YGEA for certain matters. As per the notification released by the Ministry of Commerce on 12 August 2020, transaction for gold export and import can be done only through LC system. Myanmar is placed on the grey list by the Financial Action Task Force (FATF), the inter-governmental body that sets anti-money laundering standards. Therefore, the country needs to monitor on the gold and jewellery exports and imports in order to ensure there is no illegal income.

As per the notification released by the according to the Trade Department, payment method was changed to LC.
The payment using LC can take about two months, cost banking service changes by two sides, and increase the charges for security matter in transport. Consequently, gold trading in the international market has also stalled due to volatile prices, YGEA stated. Starting from 20 December, TT system was given the green light for transaction valued at below $50,000 in gold exports. The transaction worth higher than that are permitted only with LC, Trade Department notified. Gold and other jewelleries are primarily purchased by Japan and the Republic of Korea, and other tourists also buy them, the YGEA stated. 

Source: The Global New Light of Myanmar

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CBM sells $50 mln in two weeks

The Central Bank of Myanmar (CBM) sold US$50 million at its foreign auction rate in two weeks, according to the statement of CBM. According to the sales of US dollars in January, the bank sold $15 million each on 7 and 12 January and, 10 million each on 13 and 14 January. The CBM is selling the foreign currency at its auction-rate through banks to the prioritized sectors especially fuel oil, edible oil and pharmaceutical sectors where the dollars are vastly in need.

The CBM is conduction an auction for foreign exchange to reduce the sudden fluctuation of foreign exchange rates Last a few days, the US dollar exchange rate rose to over K2,000 per dollar in the domestic foreign exchange market. The dollar exchange rate against the Myanmar kyat currently stood at below K2,000 per dollar.

Although the exchange rate on the US dollar hit around K1,330 per dollar the last January, the dollar value reached the highest of over K3,000 last September-end. Last year, the CBM sold $429 million to the sectors especially the oil, fuel and pharmaceutical sectors that need US dollars through the banks. Besides, the Central Bank of Myanmar (CBM) issued the instruction on 9 November that the foreign exchange transitions must be carried out within ± 0.5 per cent of the reference rate established by the CBM. Currently, the CBM selling the US dollar at the auction rate of K1,778 on 14 January.

Source: The Global New Light of Myanmar

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2021 trading value indicates 63 per cent drop on YSX

Only K4.63 billion valued 887,969 shares by seven listed companies were traded on the Yangon Stock Exchange (YSX) in 2021, showing a significant drop of 63 per cent as against 2020, according to the annual report released by the exchange. In 2020, K12.6 billion worth of 1.87 million shares by six listed companies were traded on YSX, whereas over 2.4 million shares from five listed companies, valued at K13.39 billion, were traded on the exchange in 2019. Both continuous trading and block trading on YSX fell in 2021 despite the debut of Amata Holding Public Co., Ltd. (AMATA) on the exchange on 3 June 2021. 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 equity market.

The share prices per unit were closed at K8,400 for FMI, K3,100 for MTSH, K7,900 for MCB, K19,500 for FPB, K2,600 for TMH, K2,900 for EFR and K6,000 for AMATA respectively in December 2021. In January 2021, 121,893 shares, with estimated value of K640 million, were traded in equity market. Then, it plummeted into K442 million worth of 77,388 shares in February. The figures extended further drops to K110 million worth of 19,816 shares in March 2021. Then, the market slightly rose in April with K280 million worth of 42,964 shares. The stocks maintained in the bull market in May with 78,642 shares worth of K432.448 million as well. In June, 79,296 shares worth of K430.285 million were traded on the exchange. Then, the volume of shares traded in equity market plunged into 36,855 shares in July 2021 and the trading value also slipped to K198 million. It climbed up in August 2021 compared with those registered in the last two months, with over K300 million worth of 49,191 shares traded on the exchange. It edged up to a record high in September, with over K825 million worth of 193,353 shares.

However, the trading volume plunged to 99,837 shares with estimated value of K561 million in October and touched a two-month low of K219 million, with 45,446 shares of the six listed companies traded on the equity market. It continued downward trend in December with K191 million worth of 4,428 shares, the YSX’s monthly report indicated The stock markets worldwide have reported their largest declines since the 2008 financial crisis. Similarly, the local equities market was also scared by the COVID-19 crash in the previous months, a market observer points out. People like to keep emergency savings and purchase the safe heaven asset gold, rather than make investment amid the COVID-19 crisis and current political conditions. Unexpectedly, people turned to stock market when the prices of gold remarkably gained in September. However, the stock market was back to down side in October, he continued. Amid the COVID-19 crisis and political changes, Myanmar’s securities market has been able to continue operating without stopping trading.

In 2020, the value of stocks traded on the exchange reached a peak of K1.48 billion in February, whereas trading on the exchange registered an all-time low of K552.9 million in November due to the COVID-19 resurgences in Myanmar, the exchange’s monthly report showed. Next, the Securities and Exchange Commission of Myanmar (SECM) has allowed foreigners to invest in the local equity market from 20 March 2020. Furthermore, YSX launched 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, YSX stated. 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 seminars. The stock exchange has also sought the government’s support to get more public companies to participate in the stock market and help more institutional investors, such as financing companies, investment banks, and insurance companies, to emerge.

Source: The Global New Light of Myanmar

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Press release issued to levy increased commercial tax rate over internet services

Although the majority of developing countries levy the sector-specific tax in addition to regular commercial tax for internet services, Myanmar does not collect the sector-specific tax till today. In order to recover the businesses, which face loss in impacts of COVID-19, the government carries out easing and postponing the tax collection.

However, as the use of internet services is on the rise across the nation, levying commercial tax over the consumption of internet services can increase the income for the State. On the other hand, the effects triggered by extreme use of internet services on the employment of the people and physical and mental sufferings of new generation students can be reduced.

The commercial tax will not be increased for calling and use of SMS. Arrangements will be made for easing the necessary restrictions for taxpayers who use the internet for the development of human resources and knowledge about health measures in levying the increased rate of commercial tax over the internet services. On one hand, efforts will be made for providing better quality service and network coverage for the users. The Union Tax Law 2021 was amended with a plan to levy the increased commercial tax.

Source: The Global New Light of Myanmar

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Union Tax Law 2021 (Amendment) enacted

Republic of the Union of Myanmar
State Administration Council
Law Amending the Union Tax Law 2021
State Administration Council Law No. 1/2022


5th Waxing of Pyatho 1383 ME
6 January 2022

The State Administration Council hereby promulgated this law under Section 419 of the Constitution of the Republic of the Union of Myanmar.

  1. This law shall be named “the Law Amending the Union Tax Law 2021”.
  2. This law shall be affected from 8 January 2022 to 31 March 2022.
  3. Sub-Section (e) of Section 14 of the Union Tax Law 2021 shall be substituted as follows:-
    “(e). Five per cent of commercial tax shall be levied over the income of other services being operated at home, except services mentioned in the Sub-Section (d) and Sub-Section (e-1).”
  4. The following section shall be inserted as Sub-Section (e-1), under Sub-Section (e) of Section 14 of the Union Tax Law 2021:-
    “(e-1) (1) No matter what provisions the Commercial Tax Law comprises, only once commercial tax shall be levied K20,000 per the sales of SIM cards and SIM card activation.”
    (2) Fifteen per cent of commercial tax shall be levied over the income
    earned from the internet services.”
  5. The table of Sub-Section (a) of Section 25 of the Union Tax Law 2021 shall be substituted as follows:-

I hereby signed it under Section 419 of the Constitution.


Sd/Min Aung Hlaing
Senior General
Chairman
State Administration Council

Source: The Global New Light of Myanmar

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Myanmar Central Bank sells nearly $444 mln in Feb-Dec period

The Central Bank of Myanmar (CBM) sold US$443.8 million at its FX auction rate to the authorized dealers in the past 11 months (February-December) 2021, according to the auction results released by the CBM. Consequently, the exchange rate was pegged at around K1,700-1,800 in December-end, according to the CBM. In a bid to strengthen the
local currency and govern the market volatility, the CBM reportedly sold about 6.8 million dollars on 3 February 2021, $12 million in April, $24 million in May, $12 million in June, $39 million in July, $28 million in August, $63 million
in September, $110 million in October, $31 million in November and $118 million in December in the auction market.

The CBM trades the foreign currency with the authorized private banks under the rules and regulations of the FX auction market. The currency intervention is required to steer the own currency value. It is one of the responsibilities of the CBM to control the price. This is why the CBM practised the foreign exchange intervention. Additionally, the use of Yuan or Kyat in the bilateral transaction is officially allowed in the border areas between Myanmar and China in a bid to encourage the trade, according to the notification released by the Central Bank of Myanmar on 14 December, in the exercise of the power conferred by Sections 17 and 22 of the Foreign Exchange Management Law.

This move is aiming to boost the bilateral cross-border trade, facilitate the trading and bilateral transaction and increase the use of domestic currency in line with the objectives of ASEAN Financial Integration. The local forex market’s data showed that the dollar exchange rate touched the maximum of K1,345 and the minimum of K1,327 in January 2021. The rate moved in the range of K1,335-1,465 in February. It reached the lowest of K1,420 and the highest of K1,550 in March. The rate fluctuated between K1,550 and K1,610 in April. The rate fluctuated between K1,585 and K1,730 in May and it moved to the maximum of K1,595-1,620 last month.

The local forex market’s data showed that the dollar exchange rate touched the maximum of K1,345 and the minimum of K1,327 in January 2021. The rate moved in the range of K1,335-1,465 in February. It reached the lowest of K1,420 and the highest of K1,550 in March. The rate fluctuated between K1,550 and K1,610 in April. The rate fluctuated between K1,585 and K1,730 in May and it moved to the maximum of K1,595-1,620 in June. The rate stood at K1,626-1,670 in July. It hit the lowest of K1,660 and the highest of K1,682 in August. The rate edged up to K3,200 and fell to K1,696 in September. In October, it stayed between K2,430 and K1,830. The rate was pegged around K1,700-1,800 in November and December.

Source: The Global New Light of Myanmar

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Telenor to sell 51% stake in Wave Money to Thein Wai’s Yoma, Nikki Asian stated

According to Nikki Asian, Telenor will sell 51% of Wave Money to Thein Wai’s Yoma Company. In Wave Money, Telenor owns 51% and Yoma Strategic Holdings holds 49%. According to Nikki Asian, Telenor has received $ 53 million worth of shares for sale, valued at $ 104 million, which is higher than the $ 105 million it earned when it sold the telecommunications business. “Wave is a good business and Yoma needs to buy it. They (Telenor) have no choice if they do not want the shares to be owned by another business. 

It is in line with Yoma Bank’s efforts to develop the retail sector and the growth of digital financial services, ”a market expert quoted Nikki Asian as saying. If the final acquisition is successful, Yoma will own up to 75 per cent of the money in the future, with the remaining 25 per cent likely to be owned by private investors at the Yoma-led company, according to the report. Following the political upheaval in Myanmar, Telenor plans to sell its telecommunications business in Myanmar to the M1 Group, which is owned by a Lebanese millionaire. 

However, the Burmese government has not yet given permission. As a result, it is planning to sell its stake in Wave Money while waiting for approval, the report said. The transfer is scheduled to take place in the middle of this year, but neither company has been able to confirm the news, according to Nikki Asian. Nikki Asian has announced that Wave Money has been separate from Telenor since it planned to sell its telecommunications business to the M1 Group. Wave Money will provide regular services to millions of customers. Wave Money said in a statement in July 2021 that the business was operating normally and that commitments to Myanmar would remain strong.

Source: Daily Eleven