Tradeless Christening of YSX Sees 6 Initial Firms Listed

By Kyaw Hsu Mon 9 December 2015

RANGOON — The Yangon Stock Exchange was officially launched on Wednesday, though trading on Burma’s first-of-its-kind bourse is not expected to begin until March of next year, the country’s deputy finance minister said at a ceremony marking the occasion.

Six companies will initially be listed on the exchange, being dubbed YSX and located on downtown Rangoon’s Sule Pagoda Road in a building formerly occupied by Myawaddy Bank: First Myanmar Investment (FMI); Myanmar Citizens Bank; Myanmar Thilawa SEZ Holdings Public Limited; Myanmar Agribusiness Public Company Limited [Mapco]; First Private Bank; and Great Hor Kham, according to Maung Maung Thein, deputy finance minister.

“We’ll start with these six listed companies, but we don’t want to allow them to sell their shares in a hurry. We’re already late to enter the stock market, so it doesn’t really matter if we are a bit later still, we want to be sure [operations run smoothly],” Maung Maung Thein said.

Trading is expected to begin in March, pending settlement of outstanding issues with the bourse’s underwriters, which will serve as the financial liaisons between listed companies and investors looking to purchase shares.

At least 10 underwriters are expected to participate, though these firms were not announced on Wednesday, with only the KBZ Group of Companies known to have secured a YSX license so far.

“These underwriters will play a major role, and as long as they are not ready, shares cannot be traded on the YSX,” Maung Maung Thein said.

The stock exchange—developed by the state-owned and US-blacklisted Myanmar Economic Bank with two Japanese partners—is expected to be a major advancement in Burma’s financial field, offering a greater degree of stability to what has long been a poorly regulated and volatile investment landscape.

“We’re late in this region to open a stock market, but we can learn from others’ mistakes,” Maung Maung Thein said Wednesday.

The Myanmar Thilawa SEZ Holdings Public Limited was formed by nine Burmese companies that own 41 percent of a special economic zone (SEZ) set up southeast of Rangoon, with the Burmese government owning 10 percent and a consortium of Japanese firms holding the remaining 49 percent stake. The project, like the stock exchange, is intended to jumpstart investment into Burma’s economy, one of Southeast Asia’s least developed.

FMI is led by business tycoon Serge Pun, who also chairs Yoma Strategic Holdings, a company listed on Singapore’s stock exchange. Pun’s Burmese conglomerate has a range of interests including real estate, health care, aviation and banking. FMI listed its asking price for shares traded over the counter at a company trading center in Rangoon at 19,000 kyats on Wednesday.

The Myanmar Agribusiness Public Company (Mapco) was formed in 2012 “to mobilize public savings and to foster broader investment in agriculture and agro-based industries” in Burma, according to the firm’s website. The company is Burma’s largest rice exporter.

The two dedicated lenders to earn initial listings on the YSX, First Private Bank and Myanmar Citizens Bank, are longtime players in Burma’s financial system, having both been founded in 1991. The latter was one of two companies listed on the over-the-counter trading predecessor to the YSX, the Myanmar Securities Exchange Center, which opened in 1996.

Based in Muse, Shan State, Great Hor Kham is a company believed to have links to current Vice President Sai Mauk Kham. Its business activities are focused on construction projects for government agencies, state enterprises and private entities, as the primary builder or subcontractor. The company is also one of the major investors in the Muse Central Economic Zone along the China-Burma border, a major trading hub between the two countries that has been plagued by local residents’ claims of land-grabbing in recent years.