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Hong Kong top FDI source for Myanmar this fiscal year

Hong Kong has emerged as the top source of approved foreign direct investments (FDI) into Myanmar in the first seven months of fiscal 2019-20, accounting for around 32 percent of the overall commitments.

From October 2019 to April 2020, the total number of FDI commitments from 39 entities registered in Hong Kong amounted to US$1.3 billion, according to data from the Directorate of Investment and Companies Administration (DICA). This amounted to 23pc of the government’s FDI target of $5.8 billion.

The projects approved from Hong Kong companies are related to electricity and power, garment manufacturing and property development.

Hong Kong businesses are also active in logistics, tourism and insurance and finances, according to the Hong Kong Trade Development Council (HKTDC), the city’s trade promotion body.

HKTDC’s Thailand and South Asia director Sunny Chau said Myanmar has the potential to attract more investment from the East Asian financial hub as infrastructure improves.

But Mr Chau, who is also secretary general of the Myanmar-Hong Kong Chamber of Commerce and Industry (MHKCCI), noted that despite the high growth in investments into Myanmar, the number is still low compared to Vietnam. Last year, $7.9 billion of Hong Kong capital – mainly in manufacturing and beverage – was channeled into Vietnam.

Hong Kong is one of the two major hubs through which Chinese and international investments enter Myanmar. The MHKCCI is led by multinationals including British conglomerate Jardine Matheson, the city’s flagship carrier Cathay Pacific, insurer AIA and Myanmar International Terminals Thilawa, which is owned by Hutchison Group.

The two major investors this year are Hong Kong-listed energy firm VPower and i-Land Industrial Park, an industrial zone developer in Bago Region, which started operations in 2018.

During the year, i-Land Industrial Park saw three companies committing to investing more than $11.7 million in its zone. The developer’s CEO, Ivan Tam, observes that more labour-intensive manufacturers are moving from China and Hong Kong to take advantage of industrial parks in Myanmar.

Meanwhile, VPower is backed by state-owned CITIC Group, the developer of Kyaukpyu port, and has partnered with state-owned China National Technical Import & Export Corporation to develop three out of the four emergency power projects it won last year. The four power projects alone involve investments of up to $700 million.

Since 1988, over 200 Hong Kong-based enterprises have committed more than $9.5 billion of FDI in Myanmar. This is expected to grow. Mr Chau expects FDI commitments in Myanmar to rise as the country’s energy, infrastructure and manufacturing requirements expand to meet higher demand.

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Source : Myanmar Times

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