Stock trad­ing comes to Myan­mar com­pany list­ing

The Pak Banker - - MARKETS/SPORTS -

Af­ter a de­lay of more than 20 years, Myan­mar's stock ex­change opened for its first day of busi­ness, with the trad­ing of a sin­gle com­pany. First Myan­mar In­vest­ment Co., a con­glom­er­ate con­trolled by busi­ness­man Serge Pun, made its stock de­but in Yan­gon on Fri­day, end­ing a long wait caused by the Asian fi­nan­cial cri­sis, a wary mil­i­tary gov­ern­ment and an un­der­de­vel­oped fi­nan­cial sys­tem.

The move comes as the coun­try's devel­op­ment ac­cel­er­ates with a demo­cratic gov­ern­ment be­ing formed af­ter an elec­tion vic­tory in Novem­ber, part of a po­lit­i­cal and eco­nomic trans­for­ma­tion that's bring­ing an end to more than five decades of iso­la­tion.

"The de­but is an im­por­tant mile­stone be­cause a stock mar­ket is a vi­tal in­gre­di­ent for eco­nomic devel­op­ment," Karine Hirn, a Hong Kong-based part­ner of East Cap­i­tal As­set Man­age­ment, which in­vests in emerg­ing and fron­tier mar­kets, said by e-mail.

"How­ever, whether it will be suc­cess­ful or not de­pends on the will­ing­ness of the gov­ern­ment to pri­or­i­tize it. The list­ing de­but was at­tended by First Myan­mar's Pun and of­fi­cials in­clud­ing Maung Maung Thein, the coun­try's deputy finance min­is­ter and chair­man of the Se­cu­ri­ties and Ex­change Com­mis­sion, who called it "an his­toric day in the devel­op­ment of the cap­i­tal mar­kets."

First Myan­mar climbed 19 per­cent to a daily limit of 31,000 kyat with 112,845 shares chang­ing hands on Fri­day, ac­cord­ing to the stock ex­change's web­site. The bourse set the stock's base price at 26,000 kyat, ac­cord­ing to its state­ment.

First Myan­mar, Myan­mar Cit­i­zens Bank and Myan­mar Thi­lawa SEZ are among the ini­tial batch of six com­pa­nies ap­proved for list­ing, Maung said in De­cem­ber.

Myan­mar's eq­uity-mar­ket jour­ney be­gan in the early 1990s, when ex­ec­u­tives from Daiwa In­sti­tute of Re­search Hold­ings, a unit of Ja­pan's sec­ond-largest bro­ker­age, met with the na­tion's mil­i­tary rulers in Yan­gon. Their ini­tial tar­get was to start a bourse by 2000. The re­gion's fi­nan­cial cri­sis soon de­railed those am­bi­tions and it wasn't un­til 2011, af­ter the quasi-civil­ian gov­ern­ment be­gan open­ing up Myan­mar's econ­omy, that the ex­change plan was revived.

As Myan­mar emerges from eco­nomic iso­la­tion, it will need $80 bil­lion of power, trans­port, and tech­nol­ogy projects through 2030 to mod­ern­ize its econ­omy, ac­cord­ing to the Asian Devel­op­ment Bank. Buoyed by a flood of for­eign di­rect in­vest­ment, the ADB es­ti­mates the econ­omy ex­panded about 8.3 per­cent last year and will grow nearly the same pace in 2016.

On Thurs­day, Myan­mar's par­lia­ment ap­proved Aung San Suu Kyi and 17 other nom­i­nees to take po­si­tions in the in­com­ing gov­ern­ment's cab­i­net, fol­low­ing her Na­tional League for Democ­racy party's land­slide vic­tory in Novem­ber's elec­tion.

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