BUSI­NESS ALERTS

Mizzima Business Weekly - - CONTENTS - Gor­don Brown

Myan­mar Faces Dou­ble Digit In­fla­tion and Dan­ger in China Slow­down

Myan­mar’s in­fla­tion is forecast to rise into dou­ble fig­ures in the near fu­ture, pushed by food price and wage in­creases.

“We ex­pect in­fla­tion­ary pres­sures to in­crease, mainly com­ing from the latest de­pre­ci­a­tion episode in July as well as the re­cent ef­fects of mas­sive flood­ing made worse by Cy­clone Komen, be­fore mod­er­at­ing to­wards 8% in the medium-term,” fi­nan­cial an­a­lysts Man­tis said in their latest study of Myan­mar’s econ­omy.

For­eign di­rect in­vest­ment (FDI) is ex­pected to re­main strong and con­tinue pro­pel­ling growth av­er­ag­ing 7.5% a year, the Dutch an­a­lysts said in their Septem­ber forecast made avail­able to Mizzima.

“We ex­pect in­vest­ment to re­main strong in the un­der­ser­viced fi­nance and tele­com sec­tors, rel­a­tively low wage costs to con­tinue to at­tract at­ten­tion to­wards gar­ment man­u­fac­tur­ing, while grow­ing in­ter­nal de­mand will pro­pel the elec­tric­ity gen­er­a­tion sec­tor,” Man­tis said.

How­ever, FDI could be slowed by two fac­tors: the out­come of the Novem­ber elec­tions and China’s eco­nomic slow­down. FDI would be stunted if the demo­cratic process is slowed and re­forms stall, Man­tis said. “[China] is a ma­jor source of fi­nanc­ing for both the pri­vate and public sec­tor and Myan­mar’s main trade part­ner [and] a sig­nif­i­cant fur­ther slow­down in Chi­nese growth will hit both po­ten­tial out­put and the ex­change rate.”

Myan­mar Sea Borders Ten­sion Free but Oil Price Fu­ture Gloomy: Study

An in­ter­na­tional sur­vey of oil and gas ex­plo­ration con­cludes that the Bay of Ben­gal is now free of ter­ri­to­rial dis­putes.

The Bay, where much of Myan­mar’s po­ten­tial re­serves are be­lieved to lie, was the sub­ject of con­fronta­tion in the past with neigh­bor Bangladesh. It now fails to make a top ten list of the world’s hy­dro­car­bon bor­der flash­points com­piled by an­a­lysts Busi­ness Mon­i­tor In­ter­na­tional (BMI).

How­ever, the study fore­casts that crude oil prices will re­main low un­til 2020 and pos­si­bly be­yond, sug­gest­ing that Brent crude might still be less than US$80 per bar­rel even in 2024.

A con­tin­u­ing glut will make ex­plo­ration and pro­duc­tion in many ar­eas, es­pe­cially off­shore deep-wa­ter blocks, eco­nom­i­cally un­fea­si­ble, BMI said.

Myan­mar has just fi­nalised pro­duc­tion shar­ing con­tracts for 20 blocks in the Bay of Ben­gal and An­daman Sea, ten of which are in deep wa­ter.

In­ter­na­tional Ho­tel Group to Man­age 260-Room Yan­gon Pro­ject

The world’s big­gest ho­tel man­age­ment or­gan­i­sa­tion, Wyn­d­ham Ho­tel Group, is to run a 260-room ho­tel planned for the Kan­thar­yar Cen­tre Pro­ject be­side Yan­gon’s Kan­daw­gyi Lake.

The five-star Wyn­d­ham Grand Yan­gon Royal Lake is to be part of the US$157 mil­lion mul­ti­ple use Kan­thar­yar Cen­tre which will in­clude apart­ments, an of­fice tower and shops.

The ho­tel, ex­pected to be com­pleted in 2017, will be owned by Asia Myan­mar Shin­ing Star Com­pany but man­aged by Wyn­d­ham, Myan­mar Busi­ness To­day said.

Asia Myan­mar Shin­ing Star Com­pany is a Hong Kong based busi­ness.

The Wyn­d­ham Group in­cludes ho­tel brands Ra­mada, Days Inn, Mi­cro­tel Inn & Suites and Trav­elodge.

“We will in­vest around US$70 mil­lion in the ho­tel. The ground work for Phase 1 of the de­vel­op­ment is com­plete and we an­tic­i­pate the whole pro­ject will be fi­nal­ized by 2017,” said Asia Myan­mar Shin­ing Star Com­pany spokesman Kyaw Khaing.

Myan­mar han­dled 3 mil­lion visi­tors in 2014 and the num­ber is ris­ing an­nu­ally. In­ad­e­quate ac­com­mo­da­tion for both 5-star busi­ness­peo­ple and back­pack­ers con­tin­ues to be a prob­lem, travel trade mag­a­zine TTR Weekly has said.

No Early Yan­gon Traf­fic So­lu­tion but Aid for Mekong Cor­ri­dor Road

Yan­gon’s wors­en­ing traf­fic prob­lems can­not be solved in the near fu­ture be­cause a pro­posed com­pre­hen­sive traf­fic im­prove­ment pro­gram would be too ex­pen­sive, Yan­gon City De­vel­op­ment Com­mit­tee said.

Sur­veys and pro­pos­als to im­prove traf­fic flow have been made by the Ja­pan In­ter­na­tional Co­op­er­a­tion Agency (JICA), funded by the Tokyo gov­ern­ment.

A Euro­pean Union-funded study is un­der way at present. The EU’s Sus­tain­able Ur­ban Mo­bil­ity Plan­ning is cost­ing al­most US$1 mil­lion and will not be com­pleted un­til Jan­uary 2017, var­i­ous re­ports said.

“It is im­pos­si­ble to im­ple­ment the [JICA] pro­ject im­me­di­ately due to fi­nan­cial and other dif­fi­cul­ties. JICA has es­ti­mated that the pro­ject would cost about US$24 bil­lion. We will start im­ple­ment­ing parts of the pro­ject, but not as orig­i­nally planned,” Eleven Media quoted the Yan­gon de­vel­op­ment com­mit­tee say­ing this week.

Mean­while, the Min­istry of Con­struc­tion said it is ob­tain­ing fi­nan­cial help from the Asian De­vel­op­ment Bank (ADB) to­wards the cost im­prov­ing some of Myan­mar’s trunk roads along the so-called Greater Mekong Sub­re­gion East West Eco­nomic Cor­ri­dor pro­moted by the bank.

The min­istry said in a no­tice this week it is invit­ing bids for a con­tract to im­prove a stretch of road in the Eindu-Kawk­ereik area as part of the cor­ri­dor. The work will be funded jointly by the SADB and the ASEAN In­fra­struc­ture Fund, said the min­istry.

Con­struc­tion and sup­ply busi­nesses in­ter­ested in bid­ding should con­tact the pro­ject di­rec­tor at ed­kkrpmu@gmail.com. The dead­line for bids is De­cem­ber 8.

Na­tional Air­line gets Global Ex­po­sure in new Book­ing Ser­vice

Myan­mar Na­tional Air­lines has gone in­ter­na­tional, with its pro­mo­tional oper­a­tions at least.

The air­line, which has just be­gun its first over­seas ser­vice, has signed a com­pre­hen­sive dis­tri­bu­tion agree­ment with global tech­nol­ogy provider Sabre Cor­po­ra­tion which will en­sure the flag car­rier’s fares and sched­ules are avail­able to over 100,000 travel agents across the Asia Pa­cific re­gion.

Un­til now the air­line’s do­mes­tic ser­vices could not be booked through an in­ter­na­tional sys­tem, said travel trade mag­a­zine TTR Weekly.

“Myan­mar has be­come a strate­gic growth mar­ket in South­east Asia for both tourism and trade,” TTR Weekly said. “This agree­ment with Myan­mar Na­tional Air­lines pro­vides travel agents across the re­gion with ac­cess to the full do­mes­tic net­work.”

In an over­seas first, Myan­mar Na­tional has be­gun flights to and from Sin­ga­pore.

Mean­while, some land cross-bor­der travel be­tween Myan­mar and Thai­land has been re­stricted in the past few days for se­cu­rity rea­sons, TTR Weekly said.

Re­stric­tions were re­port­edly im­posed on visa-free en­try into Thai­land from the Phu Nam Ron-Htee Khee bor­der cross­ing at Kan­chanaburi.

The Thai author­i­ties also im­posed re­stric­tions on a num­ber of bor­der land bor­der cross­ings with Cam­bo­dia, the trade mag­a­zine said.

It said it be­lieved the re­stric­tions were linked with in­ves­ti­ga­tions into the bomb­ing at a shrine in Bangkok on Au­gust 17.

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