A stock exchange must be established to help protect ignorant investors, Deputy Finance Minister Dr Maung Maung Thein said in the Amyotha Hluttaw on June.
“If we do not establish a stock exchange, people may be cheated out of their money by others posing as public companies,” said Dr Maung Maung Thein.
“During the rule of the previous government, the money of the people was misappropriated by people acting falsely as saving and loans co-operatives,” he said.
The deputy minister said there were an estimated 200 companies in Myanmar with the potential to list on the stock exchange due to open in October 2015.
But only five or six companies would meet the conditions for listing, which included transparency, international accounting standards and tax compliance.
“We will initially only sell the shares of only five of six reliable companies,” Dr Maung Maung Thein said.
He said two companies had already signed a Memorandum of Understanding to float on the stock exchange, a joint venture to be owned 51 percent by the Myanmar Economic Bank and 49 percent by Japan’s Daiwa Securities Group and the Tokyo Stock Exchange.
U Nyan Linn (Union Solidarity and Development Party, Ayeyarwady Region) told the Amyotha Hluttaw that it would be necessary for the people to understand the risks involved in buying shares, as they were not yet familiar with how a stock market would function.
The benefit of a stock market was that it would enable those with surplus cash to buy shares in companies, and they in turn would be able to raise capital by selling shares rather than having to borrow funds from banks on which they would have to pay interest, U Nyan Linn said.
Source: Mizzima News Myanmar