New reports show that a second company has now listed its shares on the Yangon Stock Exchange (YSX). Htet Tayza examines how the YSX is faring, six months on from its creation.
In December 2015, the government of Myanmar announced the creation of the YSX. They said that it would initially feature six companies, First Myanmar Investment (FMI) Co Ltd, First Private Bank, the Myanmar Citizen Bank, the Myanmar Thilawa Special Economic Zone (SEZ) Holdings Ltd, the Myanmar Agricultural Business Public Corporation and Great Hor Kham.
The YSX launched its first shares (for FMI) on 25th March 2016. FMI’s shares were set at an issue price of K26,000 each, but this value increased by 19% when trading commenced. Commenting on the launch of the YSX Dr U Maung Maung Thein, the Chair of its Securities and Exchange Commission (SEC) said: “We will start with just one company, as it is a complicated process. The second company [Myanmar Thilawa SEZ] will follow a few days or weeks later.”
Second company launches
Regional news portal Deal Street Asia reports that Myanmar Thilawa SEZ launched its shares on the YSX on 20th May 2016. Myanmar Thilawa SEZ is a nine-shareholder consortium with companies operating across a range of sectors from industrial, to logistics to transport. Total investment in Myanmar Thilawa SEZ to date equals US$423m.
Demand for Myanmar Thilawa SEZ stock was high on the first day of trading. The firm, who enlisted the aid of CB Securities to list and trade its shares on the bourse, saw its stock open at K40,000 (US$34) per share and close at K50,000 (US$42) per share. Deal Street Asia notes that as of 20th May 2016, there were 3,892,000 outstanding shares in Myanmar Thilawa SEZ. The firm’s paid up capital has reached around K38bn (US$32.3m).
Demand for order volume for Myanmar Thilawa SEZ hit around 590,000 shares. After listing, the sales offer for Myanmar Thilawa SEZ registered at around 5,000 shares. Speaking out on the YSX’s second listing, its Executive Securities Manager Thet Htun Oo said: “As the second listing came into effect, a lot of interest is seen in people. The demand for the volume reached about 100 times than the supply.”
Htet Tayza’s commentary
It is too soon to determine how this second listing will perform on the YSX long-term. It is worth noting that shares in FMI, the bourse’s maiden listing, fell below their initial public offering price after rising significantly in the first few days of trading. Regional news site Irra Waddy writes that FMI’s shares have stayed at between K5,000 and K10,000 below their initial peak ever since.
However, national news agency The Myanmar Times reports that FMI shares rose by 17% to K31,000 on 20th May. It is interesting to note that the YSX also rolled-out a new Index, the Myanmar Stock Price Index, which will represent market price movements, on 20th May. Weighted by market capitalisation, this means that moves in larger firms will now carry greater weight on the YSX. With these developments, we will need to wait and see how the YSX will operate long-term.