Three companies set to seek listing on fledgling Yangon bourse

A boy reads a newspaper in front of the Yangon Stock Exchange center in Yangon December 8, 2015. REUTERS/Soe Zeya Tun

Yangon Stock Exchange (YSX), which was set up two years ago in the frontier market and currently has five companies listed, is expecting three more firms to join the bourse in a year, according to Htay Chun, commission member of the Securities and Exchange Commission of Myanmar.

The three firms which are poised to join the bourse include engineering company Great Hor Kham, Myanmar Agro Exchange Public Limited, and logistics player Ever Flow River.

These firms are working on the listing process with securities companies and can join the bourse in less than a year, said Chun.

The two-year-old exchange has five listed companies including First Myanmar Investment Co Ltd, Myanmar Thilawa SEZ Holdings, TMH Co Ltd, Myanmar Citizens Bank, and  First Private Bank Ltd.

To attract more companies to the bourses, the Myanmar state has set up a special task force, supported by JICA, that will offer legal and accounting services to firms keen to seek a listing.

YSX: The journey so far

Looking back at the past two years, YSX has managed to trade about 5.2 million shares for a value of K93 billion ($68.5 million). The bourse suffers from weak liquidity on account of poor trading activity and lack of participation from strategic investors.

The exchange, owned by Myanmar Economic BankDaiwa Institute of Research and Japan Exchange Group, is facing a drop in share prices and trading volume.

Besides, it has seen negligible interest from local public companies. Out of the 59 public companies officially approved by the Directorate of Investment and Company Administration to sell shares to public, only two have shown interest to join the bourse, Dr Maung Maung Thein, former deputy minister of Finance told this portal.

Looking at the macro picture, 2017 saw the trading value fall to K22.87 billion from K112 billion in 2016.

The way ahead

Come August 2018, YSX could see some buoyancy when the changes to the Companies Law 2017, which allows foreigners to own more than 35 per cent in a local company, takes effect. With this, foreign individuals and corporations could buy shares on the YSX.

“That means the demand for listed companies could increase, leading to pick-up in trade,” said Aung Thein Tun, director of studies at Institute of Business & Investment Management Myanmar. Investment firms and private equity players are seen showing interest to participate in the stock market, Tun observed.

He further added that while the YSX listing criteria was not that strong compared to global exchanges, even public companies need to upgrade their business practices.

Myanmar, which was under military rule for about a half-century elected a civilian government in December 2015, around the same time when the bourse was established.

Out of the 311 public companies in Myanmar, only 30-40 of them are engaged in using public money. In August 2017, the government allowed 55 public companies to issue shares.

Also Read:

TMH Telecom to be the fifth firm to be listed on Yangon Stock Exchange

Myanmar 2016: Yangon bourse sees 3 listings, more in pipeline

Over a dozen VC transactions, PE exits mark Myanmar dealscape in 2017