Daiwa liquidates advisory subsidiary

A subsidiary of Daiwa Securities called Myanmar Corporate Strategic Advisory will be liquidated in order to allow the Japanese group to focus on its role as an underwriter and broker on the Yangon Stock Exchange, a company official said yesterday.

MCSA, which is fully owned and controlled by Daiwa Securities Group, has been operating as a listing advisory firm since it was founded in late 2014.

It has contracts with three companies – First Myanmar Investment, Myanmar Agribusiness Public Corporation Limited (MAPCO) and Asian Green Development Bank, and has also provided advisory services for local companies on mergers and acquisitions, dual listing on foreign markets and other capital raising activities.

Daiwa Securities’ sister company Daiwa Institute of Research partly owns the Yangon Stock Exchange, and the group’s decision to set up a securities firm with its Myanmar partner raised the eyebrows of some. They were concerned that it was trying to play too many roles on the exchange, possibly leading to a conflict of interest among the different branches – though Daiwa officials refuted these claims.

The move to dissolve MCSA could be seen as a sign that Daiwa is trying to streamline its role in the bourse, which saw its first listing last week, a company spokesperson said.

News that the company would be wound up was circulated via an internal announcement in March, after First Myanmar Investment, the first company to trade on the exchange, received permission to list.

“Our initial objective has been completed, therefore Daiwa has decided to dissolve this company and concentrate our efforts on our joint venture,” said director U Tin Min Htut.

Myanmar Securities Exchange Centre (MSEC) is a joint venture between state-owned Myanmar Economic Bank and Daiwa Securities Group.

“We initially planned to run our advisory business separately from MSEC, which takes the role of a broker and underwriter, and so this company was formed,” he said.

“However, the situation has changed, and Daiwa will focus more on MSEC, so we will transfer our function to MSEC to be more efficient.”

MEB, a financial institution under the Ministry of Finance, remains on the US Treasury’s Specially Designated Nationals List, though it is allowed to carry out certain financial transactions under a general licence.

“We don’t know what will happen under the new government, but we understand that MSEC will continue working together with Daiwa,” U Tin Min Htut said.

Shinsuke Goto, MCSA managing director and director of Daiwa Securities Group, will leave Myanmar within a month for a new assignment in the group’s investment banking division in Tokyo, the company said. MCSA’s team of 13 will be dissolved, with junior members of staff employed until March 31.

Mr Goto has been instrumental in helping develop Myanmar’s stock exchange and preparing companies to list, since he first visited the country in 2012, the company added.

Daiwa has a long history in Myanmar, and has been involved in the Myanmar Securities Exchange Centre – the country’s over-the-counter market – since 1996.

Source: Myanmar Times

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