Two Japanese firms and Myanma Economic Bank on December 23 signed an agreement to establish the Yangon Stock Exchange, which is set to be opened late 2015.
The agreement between Daiwa Institute of Research, an arm of Daiwa Securities Group, as well as Japan Exchange Group and state-owned Myanma Economic Bank, is the result of discussions that have been ongoing since May 29, 2012, when a memorandum of understanding was initially signed.
The partners will now set up a joint-venture firm called Yangon Stock Exchange-Joint Venture Limited with K32 billion capital (US$31 million). There will five total directors, with three Myanmar directors and one from each of the two Japanese firms – though officials declined to comment on respective ownership stakes.
“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,” a press release said.
The government’s self-imposed 2015 deadline to open the exchange has come under the microscope, with some claiming it will be difficult to meet.
Asked whether the exchange is on track, Daiwa sent a statement saying: “Although enactment of related laws and rules takes more time than we expected, Myanmar government seems to be eager to open stock exchange in 2015. [Daiwa Institute of Research] would like to support them with utmost effort with Japanese Government and [Japan Exchange Group].”
Daiwa, which is one of the largest and oldest Japanese securities companies, has also established some of the information technology infrastructure required for a modern stock exchange in offices at MICT Park in Hlaing township, though Myanmar government officials have said it will be run out of the former headquarters of Myawaddy Bank near Sule Pagoda. Daiwa said the location of the YSX will be revealed after a formal decision is made.
From a technical point of view, the YSX and securities companies will need to be equipped with mutually connected computer systems. “[Daiwa Institute of Research] has already started to develop the computer system for YSX,” Daiwa said in a statement to The Myanmar Times.
Daiwa is also a partner in the Myanmar Securities Exchange Center, an over-the-counter market on the second floor of Myanma Economic bank near Sule Pagoda. Founded in 1996, it has two companies listed on the exchange, both of which are seldom traded.
The exchange center will continue to conduct business in the future, and is currently in the business of matching stock orders. In the future, the YSX will be an organisation where investors’ orders are gathered together and securities trading is executed in an organised fashion, Daiwa’s statement said.
The other Japanese partner in the YSX is Japan Exchange Group, the operator of the Tokyo Stock Exchange along with a smaller market in Osaka.
Source: MYANMAR TIMES