Myanmar government is pushing hard to set up its first stock exchange in order to build up their capital markets.
YANGON: Myanmar hopes to set up its first ever stock exchange before the end of this year.
It expects Parliament to pass the Security Exchange Law within this month during the current session.
Myanmar wants to model its stock exchange after the Japan and Singapore stock exchanges. It feels that both exchanges bear many similarities and meet the needs as well as objectives of Myanmar.
Myanmar will then pick out elements from these two bodies before incorporating and developing their own stock exchange.
For a start, Dr Maung Maung Thein said that the country will only allow local public companies to be listed on the stock exchange before enabling foreign firms to do so.
He later declined to say how many local firms will be granted approval or will actually qualify for the listing.
However, Channel NewsAsia understood that less than one-third of the approximately 70 local public companies in the country will actually qualify for listing.
Setting up a stock exchange in Myanmar is extremely difficult simply because the country has got a very basic banking infrastructure and a very low-skilled workforce.
However, Dr Maung Maung Thein said this is something that the country will have to do to push forward in order to help the country accelerate and boost its economic growth.
“If we want to raise our economy, we need finance. Government financing cannot be enough for the private sector. With the set-up of the capital market, only then the private sector can get what they want in terms of finance. There are a lot of public local companies which are coming up with public shares. Some are good and reliable, some are not so reliable but we have to start (somewhere), that’s the important thing,” he said.
However, many industry players said they are skeptical on whether a stock exchange can actually be operational so soon.
They are also concerned on whether or not there are enough local companies which actually qualify to be listed. Some even expressed reservations and said they will still consider their options even if they qualify to be listed.
Dr Sein Maung, chairman of First Private Bank, said: “I’ve been asked to register. Right now, I have no problems selling my shares and I have control over my shareholders. I’m thinking twice now whether I should go ahead. If I need funds, then I might go for it.
“The other problem is that once I register, it’s very hard to control. A lot of speculators will be buying and selling my shares and there will be a lot of speculation on my shares. I can’t control the price. Now I can control my price, I can choose my shareholders so I have to think. Whichever is good for my bank, I’ll do it.”
Dr George Soe Win, senior advisor at Livestock & Fisheries Development Bank, said: “The locals don’t know about the corporate culture and also they don’t have much experience about corporate governance or something like that. They need at least two to three years to take time to catch up to all those corporate culture.”
The Myanmar government has already identified a site – the old central bank located in downtown Yangon – to set up the stock exchange.