‘Businesses With Compelling Stories are Suitable to Be Listed’
By Kyaw Hsu Mon 24 June 2014
When the Yangon Stock Exchange launches next year, five public companies will be listed. Among them is Myanmar Agribusiness Public Corporation Ltd (Mapco), the first public agricultural company in the country. Mapco’s managing director Ye Min Aung recently caught up with The Irrawaddy about his company’s activities and challenges ahead of the stock exchange launch.
Question: Mapco has already signed a Memorandum of Understanding with the Yangon Stock Exchange. When will the company officially be listed?
Answer: Mapco was established in 2012 and currently has around 1,400 shareholders. Mapco intends to be listed in the Yangon Stock Exchange by October or November of 2015, when the YSE is up and running.
Q: After the Yangon Stock Exchange launches, what will be the remaining challenges for businesses here?
A: [Poor] human resource capability and capacity is one of the major challenges faced by the business community in Myanmar [Burma]. This is due to inadequate attention and support to investment in human capital by the former political system. Now we are in a new era, and there is a need to do more about human capital enrichment and human resource development. Most staff members in the business community are trying very hard to understand international practices. Language barriers and financial limitations to achieve international education standards are also contributing to a knowledge gap.
Q: What is Mapco’s capital?
A: Mapco has so far accumulated about 11 billion kyats (US$11 million), and that’s increasing. However, this will not be sufficient, and we will need more equity and capital to do agribusiness and agro-based investment. Agribusiness-related production and export are very much vital for rural development and poverty alleviation in Myanmar, and Mapco intends to play a substantial role in this noble task, and therefore we decide to be listed in YSE to gain more capital and to build trust with our shareholders.
Q: Are you confident that an agribusiness will perform well in the stock exchange, even though the country’s agricultural sector sees less foreign direct investment than other sectors. Do you think Burmese people are interested in buying your shares?
A: FDI in the agriculture sector is very little because there are many risks associated with it. But foreign companies are now forming JV [joint ventures] with locally experienced, reliable parties to become involved in Myanmar’s agriculture sector. For example, a top international company, Mitsui is now going into a JV with Mapco. … This will benefit the sustainable business environment of Myanmar. I hope that listing in YSE will attract more local and foreign shareholders.
Q: How much do Mapco shares cost?
A: Mapco is selling shares at the Mapco office. We have an investor relations department already. The share face value is set at 10,000 kyats per share, and the share price is subject to demand and supply.
Q: What regulations do you expect to see in the future as brokerage houses open in the country?
A: The Myanmar Securities and Exchange Law was enacted last year. We are waiting for regulations, directives and policies, and we are also expecting the formation of a securities exchange commission to monitor and supervise the related industry and its activities.
Q: What kinds of companies do you expect to be listed on the YSE after 2015?
A: In fact, businesses with compelling stories are more suitable to be listed. In Myanmar, my personal opinion is agriculture companies, infrastructure and construction companies, government business agencies and banks are highly likely to be listed.
Q: Has Mapco learned from the mistakes that other countries in the region made when starting their own stock exchanges? Burma is the ninth country in the Association of Southeast Asian Nations to launch one.
A: Mapco has studied the Thai, Malaysia and Singapore stock exchanges. We are focusing nowadays on preparing and building good corporate governance, responsible reporting, transparency and good corporate ethics, which we view as important.
Q: There’s currently a lot of interest in real estate investments in Burma. Do you think Burma’s investment style might change after the stock market launches?
A: I hope there are positive and constructive improvements that come with a capital market and stock exchange. But predictable and sustainable policy and regulatory framework, pro-business attitudes and the government’s full attention and pragmatic support will very much determine whether the stock exchange will function successfully or not.