RANGOON — Foreign investors will be unable to buy shares on the Yangon Stock Exchange (YSX) as long as the Myanmar Companies Act is not amended, a senior YSX official said, dispelling rumors that shares trading would open up to foreigners this week.
Earlier this week, misleading news apparently spread after Maung Maung Win, chair of the Securities and Exchange Commission of Myanmar, was reported on Monday in the weekly Chinese paper Golden Phoenix as preparing to allow foreign investors access to the YSX.
“According to the Myanmar Companies Act, foreign investors aren’t allowed to buy shares from local companies. That’s why, until it’s amended, shares trading will be inaccessible to foreign investors,” Thet Tun Oo, a senior YSX officer, told The Irrawaddy.
“Some media outlets probably misunderstood what U Maung Maung Win said. He was saying that it’s possible but that it all depends on [amending] the act.”
The Myanmar Companies Act was enacted in 1914, but while some of its clauses are seen as ill-suited for present-day Burma, it has yet to be updated by Parliament.
Six firms—Myanmar Agribusiness Public Corporation (MAPCO), First Myanmar Investment (FMI), Myanmar Citizens Bank, Myanmar Thilawa SEZ Holdings Public Limited (MTSH), First Private Bank and Great Hor Kham—were supposed to be listed on the YSX in March, but FMI and MTSH are the only two that have since been ready for shares trading.
Myat Thin Aung, vice chairman of Yoma Bank, FMI’s sister company, said that allowing foreign investors access to the YSX would be a boon to Burma’s market.
“Regarding FMI shares, I’ve heard that many foreign investors are interested in buying. If the government would allow this, the stock market would develop,” Myat Thin Aung said.
According to several industry sources, some foreign investors have been forced to try to buy shares under a local Burmese citizen’s name instead of their real name.
“Making it legal [for foreigners to buy shares] would boost the stock market,” Myat Thin Aung said.
The YSX, Burma’s first modern stock exchange, officially “opened” in December, but it initially only traded through internal dry-run testing.