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Japan Companies to Help Set Up Myanmar’s First Stock Exchange

Discussion in 'China & Far East' started by Aepsilons, Jan 12, 2015.

  1. Aepsilons

    Aepsilons PDF THINK TANK: ANALYST

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    Japan’s Daiwa Securities Group Inc., its research arm and Japan Exchange Group Inc. said Tuesday they signed a joint-venture agreement with Myanma Economic Bank to establish Myanmar’s first-ever stock exchange in Yangon.

    The deal is the latest tangible sign that plans for Yangon’s stock exchange, which the government aims to have up and running by October 2015, are moving forward.

    Japan Exchange Group and Daiwa Institute of Research would “continue to contribute to the development of Myanmar’s capital market and the expansion and deepening of economic relations between Japan and Myanmar through the establishment of Yangon Stock Exchange,” the companies and Myanmar’s state-owned bank said in a joint statement.

    The deal followed an agreement signed in May 2012 between Daiwa Securities and the Tokyo Stock Exchange to help set up the exchange after Myanmar began opening up the previous year following nearly five decades of military rule.

    In November, the former headquarters of Myawaddy Bank in Yangon was chosen to house the stock exchange. Building renovations will be finished by June or July, according to Myanmar’s deputy finance minister, Maung Maung Thein, in preparation for the exchange’s launch.

    Despite the progress, analysts have said they remain skeptical that the timeline for the exchange is achievable, given the multiple delays in overhauling Myanmar’s once military-dominated financial system.

    In a note to clients earlier this month, political risk consultancy Vriens & Partners wrote that “serious doubts remain as to whether the stock exchange will be ready to move forward” by mid-2015. The consultancy also said that “questions remain around technical know-how” required to set up the exchange.

    Still, prominent Myanmar-based companies are lining up to be part of the exchange’s launch, hoping to inject much needed capital into their enterprises. Among these is Air Bagan, a carrier that—along with its founder, local businessman Tay Za—remains on the U.S. Treasury Department’s Specially Designated Nationals list, which prevents U.S. companies from doing business with the company. Air Bagan representatives have said its inclusion on the list, which includes about 200 Myanmar businesses and individuals, has been a major obstacle to attracting more foreign investment.

    First Myanmar Investments, led by local businessman Serge Pun, said in November that it also hoped to be among the first to list on the exchange and had already signed a letter of engagement with Daiwa Securities to prepare for listing.

    The joint venture is also further proof of Japan’s keen interest in Myanmar. The move is part of Japan’s continuing attempt to modernize the Southeast Asian country’s lagging financial sector and inject much-needed technical skill. In October, Myanmar awarded operating licenses to foreign lenders--every Japanese bank that applied received one.

    Tokyo is using official aid and private-sector investments to beef up its presence in Southeast Asia, a move in part aimed at providing a counterbalance to China’s growing clout in the region.

    Since taking office in late 2012, Prime Minister Shinzo Abe has repeatedly traveled to the region, accompanied by large delegations of corporate executives. Japan’s financial regulators and top bankers have also visited Myanmar over the past year.

    Last December, Mr. Abe pledged ¥63 billion ($573 million) in fresh aid to the country to help the development of major industrial zones. This year, Tokyo extended ¥10 billion in aid to develop infrastructure and lift standards of living in Myanmar’s conflict-plagued ethnic-minority areas.

    Such support from the government has encouraged Japanese companies to increase investments in Myanmar, a resource-rich country burdened by poor infrastructure. The trend is aided by companies’ desire to diversify their operations away from China amid lingering political tensions between Tokyo and Beijing.

    Japan Companies Agree to Help Establish Myanmar’s First Stock Exchange - WSJ


    @Aung Zaya
     
  2. Aepsilons

    Aepsilons PDF THINK TANK: ANALYST

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    [​IMG]
     
  3. Shotgunner51

    Shotgunner51 INT'L MOD

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    Good news for MM indeed.

    From China's perspective, I think the lack of co-operation between HKSE (HK Stock Exchange) and some strategic departments in Beijing hinders China's ability to execute such an effort.
     
  4. Aung Zaya

    Aung Zaya SENIOR MEMBER

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    New sun shine of our economy.. :D

    Myanmar Invites Service Providers For Yangon’s 1st Stock Exchange
    By Paul Ebeling


    A license for underwriting, which tops the requirement, will also be granted to operate in other 3 business areas, he said.

    The winners for the service licenses are expected to be announced in mid-April.

    Myanmar’s 1st Yangon Stock Exchange Market, scheduled to be launched in October this year under an agreement signed in December last year, will be run by a joint venture company with Myanmar Economic Bank holding 51% stake and 2 Japanese firms, Daiwa Institute of Research Ltd and Japan Exchange Group sharing 30.25% and 18.75%, respectively.

    The Finance Ministry said business firms listed on the Yangon Stock Exchange will be able to collect capital for long-term investment while people can buy and sell shares in those firms.

    Myanmar has been making efforts to introduce capital market for economic growth of the country, joining the Financial Services Agency (FSA) and the Japan International Agency (JICA).

    Myanmar enacted the Securities and Exchange Law in July 2013 and related rules and regulations are being added.
     
  5. Aung Zaya

    Aung Zaya SENIOR MEMBER

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    INVESTMENT & FINANCE
    Yangon Stock Exchange Moves Ahead
    Author: Morley J Weston & Zin Thu Tun | 6 January, 2015 03:41 am
    | Vol 3 Issue 1
    0 comment
    Myanmar securities exchange centre company limited stock.jpg[/paste:font]
    [​IMG]
    Reuters
    Japan Exchange Group, Daiwa Institute of Research and Myanma Economic Bank have signed a joint venture agreement to set up the Yangon stock exchange.

    The joint venture will be named Yangon Stock Exchange Joint-Venture Company Limited, and has K32 billion ($32 million) in capital, according to Japan Exchange Group.

    Daiwa Institute of Research Ltd will hold 30.25 percent of the joint venture, and Japan Exchange Group 18.75 percent.

    Myanma Economic Bank, owned by the Myanmar Ministry of Finance, will hold a controlling share of 51 percent.

    “The agreement is the outcome of long and conscientious negotiations between the competent authorities of Japan and Myanmar to set up and operate the first stock exchange in Myanmar. The parties have been engaged in discussions since May 29, 2012, when the Memorandum of Understanding regarding the establishment of a stock exchange and the cooperation for support in the development of the capital market in Myanmar was concluded,” the companies said in a joint statement.

    The plan is to launch the exchange sometime in 2015. However, there is some question about whether the exchange can open smoothly.

    “Cambodia, Laos and Vietnam have had stock markets for two years, but they have been largely unsuccessful. Myanmar is just starting from nothing right now. The public needs to participate in the stock market. It is too early to judge how this will play out in the long term,” said U Pe Myint, director general of CB Bank.

    After the establishment of the stock exchange, the Securities and Exchange Commission will issue underwriter, dealer, broker and consultant licences.

    The exchange will be located at the former building of Union Bank on Sule Pagoda Road.
     
  6. Tshering22

    Tshering22 ELITE MEMBER

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    What Emperor Hirohito couldn't do by winning with guns, Abe-san is achieving by winning everyone's hearts. :D
     
  7. Aepsilons

    Aepsilons PDF THINK TANK: ANALYST

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    :)