The Irrawaddy Business Roundup (October 21)

By Kyaw Hsu Mon 22 October 2016

Singapore’s SMI sells Burma telecom tower business

Singapore Myanmar Investco (SMI) is selling its telecoms business for about US$12.7 million to Hong Kong’s Shining Star Holdings, which is involved in real estate, tourism, healthcare and education in China and Burma.

“With Myanmar set to benefit further from favorable trends such as tourism, foreign investments and urbanization, the proposed divestment of our telecom tower business will result in a greater concentration of our efforts behind our highest-potential growth opportunities in Myanmar,” Mark Bedingham, president and chief executive officer of SMI told

SMI has partnered with Royal Golden Sky Ltd to operate retail stores at Rangoon’s International Airport and it is investigating retail opportunities at a $300-million Junction City mixed-used development in Rangoon by the Shwe Taung Group.

 Burma and India sign MoUs

According to the Global New Light of Myanmar, three agreements were signed between Burma and India during State Counselor Daw Aung San Suu Kyi’s visit this week to the neighboring country, following President U Htin Kyaw’s visit in August.

The agreements were in the power, banking and insurance sectors, Indian external affairs ministry spokesman Vikas Swarup told the newspaper. They were signed on Wednesday following delegation-level talks headed by the State Counselor and Indian Prime Minister Narendra Modi.

One memorandum of understanding (MoU) was signed on cooperation in the power sector, another between the Reserve Bank of India and the Central Bank of Myanmar on banking supervision, and a third on designing an academic and professional building program for Burma’s insurance industry, according to the report.

Massive Jade Stone Hard to Move

The massive 174-ton piece of jade unearthed recently in Kachin State will not be moved quickly due to lack of adequate equipment and accessibility by road, according to a lawmaker in the area quoted by AFP.

The 5.8-meter- (19-feet)-long stone was found buried 60 meters deep in a mountain in Hpakant Township in mid-October.

‘‘When the edge of the stone was scratched we could see the quality of the jade inside—it is very good,’’ the lawmaker U Tint Soe, 56, posted on his Facebook page.

But the value of the rock might be closer to US$5.4 million, he added, rather than some earlier estimates which put it at $170 million.

Global Witness valued the annual jade trade in Burma at $31 billion in 2014—equivalent to around half the country’s GDP.

Jade mining comes at a high human cost as accidents are common. Around 100 people died in a major landslide in November last year.

 KBZ Bank introduces credit cards

Kanbawza Bank (KBZ) has followed other Burma banks with the introduction of local forms of credit cards on Oct. 18, in partnership with UnionPay International (UPI).

The cards will allow holders to purchase products and services from certain points of sale, make payments and withdraw cash, KBZ said.

Under the offering, one type of card can be applied for by those earning a monthly salary of 300,000 kyats and above. Those earning more than 2 million kyats per month can apply for a “platinum” card. Users will be exempt from paying interest for a certain period and will subsequently pay interest at a rate of 13 percent.

Ayarwaddy (AYA) Bank introduced local credit cards in July and Asian Green Development Bank (AGD), the Cooperatives Bank (CB), Myanmar Oriental Bank (MOB) and Ayeyarwady Bank (AYA) also offer co-branded MPU-UPI cards.

Jade mining tax rates under negotiation

Jade mining companies are in negotiations with the government to cut in half the taxes they already pay, according to a report in the Global New Light of Myanmar.

Mining companies must pay taxes on the basis of the value of extracted jade stones, according to the report.

Firms are seeking a reduction of up to one-half the proposed rate, according to U Myint Pe of the Yadana Thein Gay Har company from the Kani area in Sagaing Division.

The state body, the Myanmar Gems Enterprise, has been tasked with responsibility for overseeing mining sector operations, including taxation, measuring mining blocks, setting the terms for mining permits and reporting the number and type of heavy machinery used, the report said.

A mining block is equivalent to one acre. Previously, companies could bid for up to 50 blocks, and the price for a block with a floor price of 1 million kyats could rise by up to 50 times that value, according to U Myint Pe.

The new government has decided that permits will be given to three different sizes of enterprise—heavy, mid-sized and small. This year, the bidding process may change to allow more small-sized firms to participate, he told the newspaper.