With the recent swearing in of Myanmar’s first civilian government after more than half a century of military rule, a smooth transition of power has effectively taken place, which is a highly encouraging sign that Myanmar is firmly following its trajectory of reforms and economic growth. Although daunting challenges remain, Access Asia is optimistic about the country’s economic growth prospects and opportunities for foreign investors. The Asian Development Bank reported GDP growth of 8.3 percent in 2015 and expects a similar growth of 8.2 percent in 2016. Foreign direct investment (FDI) into Myanmar soared to more than $8 billion for the fiscal year that ended in March (mainly on the back of energy, manufacturing and telecoms investments), while the smooth political transition will likely see this positive trend continue. There is also cautious optimism that the NLD will run a more transparent and efficient government that will pass laws and grant licenses with a more streamlined style of governance.
Yangon Stock Exchange
The Yangon Stock Exchange (YSX) is now open for business after its official launch in December. The first and so far only company trading is First Myanmar Investment (FMI), a diversified conglomerate with interests in banking, aviation, healthcare and real estate run by Chinese-Burmese businessman Serge Pun. On its first trading on 25 March, FMI opened trading at its issue price of 26,000 kyat (US$21.50) and, over the first three days, saw extreme fluctuations which resulted in FMI’s share price raising to 41,000 kyat and then harshly dropping to 31,000 kyat before stabilizing. Due to this volatility, in one time span FMI lost and then regained over 200 billion kyat in value in just two hours of trading. Surge Pun reportedly went to the Yangon Stock Exchange and called a meeting with several securities companies over concerns of the high volatility yet was quoted in the local media saying it would be “prudent to give the new exchange and the industry some time to settle down before we make any comments.” Five other companies have been approved to be listed yet have not be given an exact date to begin trading. They are First Private Bank, Great Hor Kham Public Co Ltd, Myanmar Agribusiness Public Company, Myanmar Citizens Bank and Myanmar Thilawa SEZ Holdings.
Top Tax Payers
The Myanmar Internal Revenue Department released its list of the top 50 corporate tax payers for 2014-15. In recent years, to be on the list has become a ‘badge of honor’ for top Myanmar corporations as a sign of their compliance with regulatory authorities and as a sign of increased transparency. Topping this year’s list is KBZ Bank, which paid 22 billion kyat in taxes, more than double the second place company on the list, Myawaddy Bank which paid just under 10 billion kyat. Denko Trading Company is third on the list, followed by Myawaddy Trading Company and then the Union of Myanmar Economic Holdings Limited (UMEHL). Notably, Myawaddy Bank, Myawaddy Trading Company and UMEHL are all military-run companies.
