Eight companies have been offered conditional underwriting licences for the Yangon Stock Exchange, subject to paid-up capital.
The exchange, which is owned by state-owned Myanma Economic Bank, Daiwa Institute of Research and Japan Exchange Group, is due to open in December.
Companies including AYA Bank, Daiwa Securities Group and United Amara Bank were offered provisional licences on October 7, multiple industry sources said yesterday.
In addition to the eight companies granted provisional licences, two more are still being screened by the Securities and Exchange Commission of Myanmar (SECM), sources who have received licences confirmed.
Those with provisional licences must now register a subsidiary with the Directorate of Investment and Company Administration, if they have not already done so, and pay K15 billion (US$11.7 million) for the final licence.
A spokesperson for the SECM said he could not confirm licences had been provisionally awarded and that an announcement would be made in due course. U Maung Maung Thein, chair of the SECM, could not be reached for comment.
The SECM initially received 20 applications following a request for proposals earlier this year, according to state owned media reports, which did not reveal the names of applicants.
The shortlist was then narrowed down to 11 companies, said sources. An announcement about the winners – initially scheduled for July – has been repeatedly delayed.
Shortlisted companies say the delay was due to an intensive check, to ensure applicants could pay for the licence with clean money, and that they were tax compliant.
Japan Exchange Group and Daiwa also reportedly conducted a background check on the top management and board of directors at each company.
Competitors have previously expressed concern that Daiwa may end up filling too many roles with the exchange, potentially leading to a conflict of interest, as reported by The Myanmar Times. Daiwa officials have refuted these claims.
In addition to part-owning the exchange and receiving a provisional underwriter licence, Daiwa is involved in advising companies on preparing to list, training and equipment sales.
The new underwriters will help companies to list on Myanmar’s first modern stock exchange. The licence also permits underwriters to act as dealers, brokers and consultants.
The SECM has also asked companies to apply for separate broker, dealer and consultant licences – 30 companies applied earlier this year to be consultants, five to be brokers and two to be dealers. No announcement has yet been made on the winners.
Listing criteria for the Yangon Stock Exchange were published in August. Companies must meet these to attempt an initial public offering (IPO) which allows the public to buy shares, or part ownership.
To be eligible to list, a company must meet a number of requirements, including at least K500 million paid-up capital, two years of profit as prepared under Myanmar Financial Reporting Standards, and at least 100 shareholders.
Several companies have publicly said they plan to list on the new exchange, including First Myanmar Investment (FMI), Asia Green Development Bank under Htoo Group of Companies, and Myanmar Agri-Business Public Company.
However, businessperson U Serge Pun said previously that FMI, a company he chairs, may be the only one ready to list when the market opens.
U Aung Thura, CEO of Thura Swiss consultancy said he does not see it as a failure if the exchange opens without any companies ready to list.
“The exchange just needs to provide a reliable infrastructure,” he said. “It’s the job of the securities companies to attract companies to get listed.”
Source: Myanmar Times