The Stock Exchange of Thailand is ready to help the Yangon Stock Exchange (YSX), which Myanmar in cooperation with Japan’s Daiwa Securities Group plans to launch after the November 8 elections, said the SET head.
Kesara Manchusree, president and chief executive of the Thai exchange, told Myanmar Eleven on the sidelines of “Myanmar Banking and Finance Conference 2015” that the SET was willing to share its experience through training to improve soft infrastructure in the neighbouring country.
“I know that they already have the technology from the Japanese for setting up [the bourse] and have done a lot of preparations. But there are a lot of things to do to run a stock exchange – to train the people, to provide education for the investors, to have new listings. We are more than happy to share our knowledge and help if they need anything,” she said.
Kesara said the establishment of YSX would definitely support Myanmar’s business community, as it would bring benefits to both businesses and investors.
“Starting up a stock exchange in Myanmar will definitely generate tremendous benefits to businesses and efficient risk-adjusted return to investors as it enhances Myanmar’s competitiveness eventually,” she said.
She said the capital market was one of the crucial pillars in an economy as it mobilised funds from investors to businesses efficiently. An investor is able to create wealth while a business can manage its capital structure optimally through a well-functioning capital market.
She added that a liquid stock exchange played a major role in a capital market by reducing the liquidity risk an investor may face, resulting in lower costs of capital for a business. With lower costs of capital, a business gains more competitiveness and yields higher productivity to an economy.
The SET head said the YSX would play a role in addressing capital requirements for Myanmar’s sustainable development. She underscored the importance of government policy in the success of a stock exchange.
“It depends a lot on the government’s policy. Some governments [encourage] enterprises to list. For example, Vietnam has a huge number of listed enterprises. For the time being, Myanmar may not have many listed companies. The same as in Thailand, we do not have many listed enterprises,” she said.
Kesara warned not to expect a perfect start.
“The equity market is definitely a new thing to Myanmar. But you do not need to worry too much. At the starting point, there may be a small number of transactions. There are many things to focus on – how to review rules and regulations, how to increase your products, how to increase institutions and listed companies, and how to raise awareness of the people. I also believe that international recognition plays a crucial role in drawing foreign investors to enter the market,” she said.
Kesara added that the Myanmar government needed to strike a balance between the banking sector and the capital market. She urged the government to talk with business leaders before setting an important policy.