ALTHOUGH the launch of the Yangon Stock Exchange (YSX) has been pushed back to the end of November or early December, Myanmar will ensure proper systems for the exchange will be in place by the end of this month, a government official said.
Maung Maung Thein, the deputy finance minister and chair of the Securities and Exchange Commission (SEC), said that more than 80 per cent of the preparations for YSX have been completed so far. The electronic systems to be used in the exchange should be ready two or three months before the official launch.
He said the listing criteria and rules and regulations for selling and buying shares would be unveiled later this month and the final list of service providers would be transparently announced soon.
“YSX will be a good turning point for our economy, as it will change the style of fund-raising for most companies here. In the past, local enterprises sought bank loans for business expansion. After the stock exchange is established, they can raise funds through share offerings. From the investors’ side, buying stocks can be more profitable than saving money at a bank. So it is definitely a win-win situation,” he said.
Maung Maung Thein encouraged local companies to list on the YSX for their long-term growth. He said that prosperity of listed companies will create job opportunities for the people and get more revenue for the government, which would result in further economic growth for the country.
In Asean, only Brunei and Myanmar are yet to have their own stock exchanges. Brunei’s exchange is expected to take shape early 2017.
Kensuke Yazu, chief representative of the Japan Exchange Group (JPX) which advised the YSX, echoed the deputy minister’s view. “We have witnessed a lot of significant changes in Myanmar. For example, if one talked about setting up a stock exchange here in 2011, it was just a dream. Now it’s around the corner,” he said.
Myanmar and Japan started discussing the exchange in 2011, paving the way for the signing of a memorandum of understanding in 2013 to set up a 51:49 joint venture. The Securities and Exchange Commission was established in 2014. “We expect to see a sophisticated stock exchange in downtown Yangon over the next two years.”
Regional exchanges are observing the development closely. The chief of the Stock Exchange of Thailand, Kesara Manchusree, expressed readiness to help.
Meanwhile, Ho Chi Minh City Stock Exchange (HOSE)’s chief expects the exchange to play a vital role in fund-raising for Myanmar conglomerates. At a seminar in Yangon, HOSE director Nguyen Thi Viet Ha, noted that human capital, technology, expertise, and listed companies were crucial to the success of the YSX.
Aung Htun, managing director of Myanmar Investments International, said the Myanmar equity market had huge potential, but transparency was the key to overcome hiccups. “It will not be smooth and there will be many crises. It takes time to develop,” he said.
Though more companies will be encouraged to raise funds elsewhere, Oo Thein Myint, chief compliance officer and deputy general manager of CB Bank, said that the YSX establishment should not have any impact on the nation’s banking business.