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Danyingone Market Developer Launches Share Sale

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Trading on the Yangon Stock Exchange may be lacklustre, but there is still demand for shares in over-the-counter markets for the right firms. Myanmar Agro Exchange Public Company, a food market and supply chain firm partly owned by local tycoon U Win Aung, is in the process of a share sale and says it is enjoying robust interest from investors.

The company started selling shares to the public on January 16 after receiving approval from the Securities and Exchange Commission of Myanmar (SECM). Myanmar Agro Exchange (MAE) is planning to have over half the firm in public hands, which would mean selling 500,000 shares.

MEA says it has already had enquiries for over half this total in the first two weeks.

“We’ve proposals to buy over 250,000 shares and some people have already paid for theirs,” said U Aung Gyi, MAE’s CEO, adding that the closing date to buy shares is February 10. “We think we can sell the rest of the shares in the coming days.”

The firm is selling the shares – which have par value of K10,000 – at K10,500 each for a total potential capital raise of K5.25 billion. The shares will be allocated to successful investors on February 17, and share certificates dispatched on April 3.

MEA is in the wholesale food market and supply chain business, and received a contract from the Yangon Region government in early 2016 to develop and manage the Danyingone Wholesale Market in Yangon.

U Win Aung’s firm Dagon International is the main shareholder in MEA with 57pc and has the contract to build the fruit, vegetable and flower market, which is a joint project with the Yangon City Development Committee.

Under the agreement YCDC is entitled to 20pc of the 200 total units and 25pc of net profit before tax as a land rent.

MAE in its prospectus document said that part of the funds raised from the share sale would go to developing the Danyingone Market, paying for costs incurred in construction to Dagon International and paying for a K2.5 billion in loans from AYA Bank.

The firm estimates the first phase of the Danyingone market will cost K25 billion to construct.

The company had K15.7 billion in paid-up share capital as of August 31 2016, and the AYA Bank loans gave it total capital of K18.2 billion.

MEA said it has an agreement to borrow another K2 billion from AYA Bank, “upon completion of 24 shop houses”.

KBZ Stirling Coleman, AYA Trust, CB Securities, Myanmar Securities Exchange Centre and KTZ Ruby Hill Securities are acting as securities companies for the sale.

Demand for shares on the YSX, meanwhile, remains meagre. Myanmar Thilawa SEZ Holdings – of which U Win Aung is the founding chair – closed at K4100 yesterday. The price has fallen over 20pc since November.

First Private Bank, the most recent firm to list on the YSX, has watched its shares fall from K39,000 at launch on January 20 to K30,500 at yesterday’s close.

First Myanmar Investment, which listed in March 2016, closed at K14,000 after hitting a new low of K13,500 earlier this week.

 

Source: The Myanmar Times
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