Officials in Myanmar have stated that the recently opened Yangon Stock Exchange (YSX) will start trading next year.
Yangon Stock Exchange
I wrote on the Htet Tayza blog that Myanmar’s government announced it would establish a Yangon Stock Exchange in December 2015. The bourse (stock exchange) officially opened on Wednesday 9th December with six companies listed. Mizzima, an online Myanmar news agency, reported that these companies are First Private Bank, Myanmar Agribusiness Public Co. Ltd, Myanmar Citizens Bank, Myanmar Thilawa Public Company, First Myanmar Investment and Great Hor Kham Public Co. Ltd.
At the opening, the country’s deputy finance minister, Dr U Maung Maung Thein, commented that these firms are the “best of the best” that the nation has to offer. He added that now they’ve been listed, these firms will begin trading on the YSX in early 2016. Thein said that “we will start with six public companies. Upon completion of the formalities, they will start trading in February or early March next year.”
The YSX is likely to have a significant effect on Myanmar’s economy. However, this effect will be limited by the fact that currently, the bourse is only open to investors and businesses that are based in Myanmar. Yet this is set to change. Finance minister U Wein Shein explained that Myanmar’s government is currently passing enabling legislation.
When this comes into effect, foreign companies, foreign ventures and foreign investor will be able to participate in the exchange. The YSX is designed to open Myanmar up to foreign investment and boost the country’s economy. The enabling legislation will allow foreign investors to trade Myanmar stocks within “a few months” of the exchange’s opening.
Htet Tayza comments
The impact of the YSX on Myanmar’s economy will depend on how quickly this legislation is passed. Figures from the Asian Development Bank suggest that Myanmar’s economy grew by 7% in 2014, and will expand by 8.3% this year. This economic growth was spurred by foreign investment; the deputy finance minister has previously revealed that foreign direct investment in Myanmar rose by US$8 billion in the fiscal year to March 2015; this is US$3 billion more than expected.
Although the opening of the YSX was largely ceremonial, it has initiated the start of something new for Myanmar’s economy. When the bourse is opened up to outside parties, their participation may allow the exchange to lift Myanmar’s economy to new heights.