RANGOON — With about 100 public companies already formed in Burma on the advice of the government, industry insiders say most are a long way off being ready for the scrutiny of public trading that will come with the arrival of a new stock exchange.
With a previous effort to set up a stock exchange in the commercial capital of Rangoon a flop, a Japanese-backed project is hoping to have new bourse up and running in 2015.
The government has told members of local industries to come together to form public companies—which can sell shares to raise funds—as a bulwark against competition from large local conglomerates and incoming foreign firms.
Parliament in June approved the new Securities Exchange Certificate Transaction Law. However, a public companies expert, who spoke on condition of anonymity, said the all-important by-laws setting out the regulations and timetable for companies hoping to go public had not yet been published
“After the law appeared, there are no by-laws for the stock exchange or to organize the Stock Exchange Commission,” the expert said.
About 100 public companies have announced they are establishing, and so far more than 40 are registered with the government. They represent whole sectors, like Burma’s rice industry, or the range of businesses involved in gold.
“Most public companies are losing their way. They are also lacking the transparency of data to share,” the expert said, referring to the increased requirements on public companies to disclose details of their financial affairs.
Some public companies were set up without proper knowledge of what it means to be a public company, he added.
“Training to understand the international principles of public companies and the stock exchange is still needed,” he said.
Japan’s Tokyo Stock Exchange and Daiwa Securities Group said in 2012 that they would help Burma to establish a new bourse by 2015. The move is seen as a key pillar to the so-called opening up of Burma’s economy to foreign investment.
But the government has provided little assistance to those public companies that have formed, leaving them with a lack of ideas on how to become suitable for listing on a stock exchange.
“Some companies just formed to be in line with the government’s demand that they form public companies in 2014,” said Soe Tun, a member of Myanmar Agribusiness Public Corporation (MAPCO) Ltd.
He said the MAPCO was still waiting for the relevant regulations to being trading its shares, but was already forming joint ventures with overseas firms setting up around the Thilawa Special Economic Zone to import machinery. The public company has also has already begun trading in fertilizer, he said.
Kyaw Win Tun, senior vice president of Myanmar Gold Development Public Company, said he hoped the government would come forward with the regulations in 2014.
“The target is to appear on the stock exchange market in 2015, so we have to be ready in 2014,” he said.
“We have many challenges, many things to do after the by-laws appear. Currently, we can do nothing. We’re just waiting for the law.”
