The Irrawaddy Business Roundup (November 5)

By Kyaw Hsu Mon 5 November 2016

‘New trends’ seen in Burma’s business landscape
Three key trends are emerging in Burma’s business landscape, according to an analysis reported in Malaysia’s The Edge business publication.

The first trend identified in the review by analyst Terence Wu of Singapore’s OCBC bank is that manufacturing is receiving a much larger share of total investments in Burma during 2016.
By September of this year, manufacturing made up 53.1 percent, or US$686.9 million, of all new investments in Burma. During the previous year, the figure was 14.1 percent.

The analysis notes that Burma’s investment commission has identified labor-intensive manufacturing as a priority area. It surmises, by contrast, that extractive industries are not a priority for the current government due to the ‘‘divisive effects’’ of many projects in conflict areas.

Rising levels of foreign investment account for the second trend identified in the OCBC analysis, The Edge reported. This year to date, 70 percent of all approved investments in Burma are either wholly owned by foreigners or joint ventures. Foreign involvement was only present in 56 percent of all investments in the previous year.

The third trend identified by Wu concerns the greater amount of investment into the Rangoon region, which accounted for 80 percent of all investment this year, compared to 65 percent a year ago.

But Rangoon’s status as the investment destination of choice may reduce as changes in tax incentives under the new Myanmar Investment Law may help to channel investment towards less developed regions, according to Wu.

Meanwhile, Burma’s Directorate of Investment and Companies Administration (DICA), has issued updated figures indicating that foreign direct investment from April to the end of October this year reached US$2 billion from a total of 64 projects. A total of 29 local projects with investment of $155 million were also approved during the same period.

Malaysia Bank extends loan for microfinance project

Malaysia’s Maybank has provided a US$1 million loan to the microfinance operator Myanmar Finance International Limited (MFIL), a joint venture with AIM-listed Myanmar Investments International (MIL), DealStreet Asia reported.

Myanmar Finance Company Limited and MIL own a 37.5 per cent stake each in MFIL. The Norwegian Investment Fund for Developing Countries (Norfund) holds the remainder.

As of September, MFIL had six branches in Burma and was planning to open another four. It was managing a loan portfolio of $5.1 million for 38,000 borrowers.

Norfund’s regional director Fay Chetnakarnkul said, “The loan from Maybank will be an important contribution to MFIL growth and will thereby support the promotion of more financial inclusion in Myanmar.”

Maybank began operating in Burma in October 2015. It has financed the Yangon International airport, gas pipelines and highway projects, among others.
Temenos to host digital banking roundtable
The opportunities and challenges posed by digital banking for local banks will be the topic of a roundtable event to be held at Rangoon’s Sule Shangri-la hotel on Nov. 8.
Switzerland-based software specialist in banking and finance, Temenos, will host the gathering titled “Digital Banking Transformation – How Should Myanmar Banks Respond?”
Martin Frick, Temenos managing director for Asia-Pacific, will lead the presentations and discussions geared towards senior bank managers and technology officers.
Burma’s banking sector is growing fast, from a low base. Technology provides the sector with an opportunity to ‘‘leapfrog’’ ahead in the next ten years, Temenos said in a statement.

Texas firm eyes energy projects

US energy development company Quasar Resources is planning to invest up to US$400 million in Burma’s power sector over the next five years, founder and managing director Lin Tun told DealStreet Asia.

The Texas-based company is currently in talks with the government over a 100MW solar power station it hopes to develop in Sagaing Division, with an investment of around $150 million.

It also hopes to develop a 64MW hydroelectric power plant in the Upper Saedawgyi region. The project would involve building a new dam, with an investment of up to $150 million.

Quasar Resources is also looking to develop at 33MW dual fuel power plant at the Thilawa Special Economic Zone.

Meanwhile DealStreet Asia also reported that the Mekong Angel Investors Network (MAIN), started by the Asia Development Bank-backed Mekong Business Initiative as well as Lotus Impact Fund is planning to undertake tour missions in Burma every quarter starting in February 2017.

The trips, aim to bring angel investors to the country, and similar tours will be undertaken to Cambodia, Laos and Vietnam.
CEOs to share tips with budding entrepreneurs

Leading local business people will be available to share business guidance and advice with aspiring entrepreneurs and start-up businesses at an event in Rangoon on Wednesday, Nov. 9.

The event starting at 6pm is hosted by the Founder Institute Yangon and takes place at the offices of tech hub Phandeeyar on Merchant Road. Prior registration is required, at the website.