MCB hits upper limit on first day as YSX-listed firm
TRADING on the Yangon Stock Exchange has tailed off in recent months, but Myanmar Citizens Bank’s (MCB) listing late last week showed there remains huge appetite for new sources of investment. Demand for shares in the lender – the first bank to list on the country’s new bourse – was around 10 times the volume offered.
MCB moved its 10.4 million shares onto the YSX on August 26, with each share priced at K6800. The shares hit their upper limit for the day – K7800 – after the morning matching session.
Almost 13,000 MCB shares were traded on the first day, but there were unmet offers to buy for 110,000. This helped enliven what has become a quiet market of late, The last time there were so many shares traded in a single day was over a month ago, and most days see only a few thousand shares change hand. Although YSX officials note the bourse is still in its infancy.
MCB’s effect on the value of shares trading on the YSX was more modest, because in terms of market capitalisation – the total value of a company’s shares – it is worth much less than listed peers First Myanmar Investment (FMI) or Myanmar Thilawa SEZ Holdings (MTSH).
FMI’s market worth was K469.6 billion as of last week’s close, MTSH was worth K167.3 billion and MCB finished its first day with a market capitalisation of just over K81 billion.
The bank has become increasingly profitable in recent years, posting net profit after tax of K5.3 billion in the 2015-16 financial year up from K2.51 billion in 2013-14. But MCB is focused more on expanding its operations and branch network than increasing profits, said chair U Toe Aung Myint at the listing ceremony on August 26.
The firm has only 21 branches despite being over 25 years old, but it is planning to establish another 50 branches in the next five years. Investment in a wider branch network and skilled staff will mean less capital for shareholder dividends, he added.
MCB in its disclosure documents released earlier this month said it plans to hire foreign bankers with international expertise to mitigate the risk of losing senior management to rival banks.
This focus on internal investment at the potential expense of profits is something the bank will explain to shareholders, said U Toe Aung Myint.
U Win Myint, managing director of MCB, said the share price would increase only if the bank invested in its expansion, which would in time benefit investors.
Of the bank’s 10.4 million shares, 4.45 million were held by individuals on the board of directors or key executives when the firm listed on the exchange, according to MCB documents. The Ministry of Commerce, which founded MCB in 1992, has reduced its holdings in the bank in recent years but still owns around 10pc.
FMI shares finished last week unchanged at K20,000, while MTSH shares dropped K1000 to finish at K43,000.
Pedestrians wait outside MCB’s Yangon headquarters.