First Pri­vate Bank may mull delist­ing from the YSX

The Myanmar Times - - Business - HTIN LYNN AUNG htin­lyn­naung@mm­

FIRST Pri­vate Bank (FPB) ap­pears to be mulling a delist­ing from the Yan­gon Stock Ex­change (YSX) at a time when many more com­pa­nies are needed on the bourse to boost trad­ing and de­velop more ro­bust cap­i­tal mar­kets.

Among the 11 gen­eral res­o­lu­tions passed dur­ing the com­pany’s 26th An­nual Gen­eral Meet­ing on Au­gust 27 was one del­e­gat­ing au­thor­ity to the Board of Di­rec­tors (BOD) to delist FPB’s shares for the pur­pose of pro­tect­ing its share­hold­ers “if and when it be­comes nec­es­sary.”

The state­ment comes just nine months af­ter FPB be­came the fourth com­pany to list on the YSX.

“It means get­ting the ap­proval of share­hold­ers for the man­date to the BOD. An ac­tual delist­ing will de­pend on mar­ket con­di­tions. At present, we can­not say anything,” FPB se­nior ex­ec­u­tive di­rec­tor and joint sec­re­tary of BOD U Zaw Myint told The Myan­mar Times dur­ing the Yan­gon Stock Ex­change Expo held on Septem­ber 10.

While no con­fir­ma­tion was given, FPB may well be plan­ning to delist if its share price con­tin­ues to fall. On the face of it, FPB’s listed sta­tus has not been very ben­e­fi­cial to its share­hold­ers so far.

Shares of FPB closed Septem­ber 13 at K24,000 each, down about 30 per­cent from its list­ing price of K34,000 on Jan­uary 20. Be­fore list­ing, FPB shares were priced at K39,000 each.

Cur­rently, FPB has over 8,400 share­hold­ers, K100 bil­lion in au­tho­rised cap­i­tal, K24.72 bil­lion in paid-up cap­i­tal and 34 branches.

YSX blow If FPB files for a delist­ing, it would be a huge blow to the YSX, which opened on De­cem­ber 9, 2015 and com­menced share trad­ing in March 2016. How­ever, it has only man­aged to at­tract four list­ings so far. What’s more, the mar­ket value of all four com­pa­nies listed has fallen ow­ing to a lack of trad­ing in­ter­est and liq­uid­ity.

U Maung Maung Win, chair of the Se­cu­ri­ties Ex­change Com­mis­sion of Myan­mar (SECM), said it is nec­es­sary to have more listed com­pa­nies on the YSX to deepen the cap­i­tal mar­ket in the coun­try.

The stock ex­change has been try­ing hard to at­tract more com­pa­nies to list, an­nounc­ing mea­sures re­duc­ing cor­po­rate taxes for listed firms to just 5pc from 20pc be­fore and of­fer­ing ex­emp­tions and for­giv­ing fines.

“Com­pared to our neigh­bor­ing coun­tries, we have far fewer traders and listed firms. Rais­ing the num­ber of firms listed on the stock ex­change is the main re­quire­ment for fur­ther eq­uity mar­ket de­vel­op­ment,” U Maung Maung Win said.

If FPB is delisted, it will fur­ther tar­nish the rep­u­ta­tion of the YSX. It is now try­ing to de­velop stock mar­ket.” If one listed com­pany is delisted, it can se­verely af­fect the YSX im­age. It will be like tak­ing a step back­wards at a time when the na­tion’s econ­omy has been slow­ing. A delist­ing will not help the other com­pa­nies listed, nor will it be ben­e­fi­cial for in­vestors,” said Dr Maung Maung Thein, YSX pi­o­neer and for­mer deputy min­is­ter for the Min­istry of Plan­ning and Fi­nance.

A ma­jor share­holder of FPB, who was present at the YSX Expo, told The Myan­mar Times, “We will ac­cept what the BOD de­cides. Ei­ther listed or not, we will have to trust in the com­pany’s de­ci­sion.”

Photo: The Myan­mar Times

First Pri­vate Bank, one of Yan­gon’s old­est banks, may be plan­ning to delist from the YSX.

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