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Roundup: Myanmar's Yangon Stock Exchange draws interest from local investors

Xinhua, April 20, 2016 Adjust font size:

Myanmar's Yangon Stock Exchange (YSX) has drawn interest from local investors as its weekly sale stood at over 20 billion kyats (about 20 million U.S. dollars) by the first week of this month before the water festival.

Trading on YSX has closed for the long water festival holidays until next week.

Even on the first trading day, March 25, the first listed company, First Myanmar Investment (FMI) received more market order volume than its sale offer. The market order reached over 37,000 while sales offer stood at over 22,000 with the value of 26,000 kyats (21.5 U.S. dollars) at the opening stage.

After the first trading period of the day, the company's trading volume reached 42,610 shares.The highest volume of shares were traded on March 29 with 210,752 shares worth 8.641 billion kyats (about 7.3 million U.S. dollars). The per share value on that day hit as highest as that of the previous days with 41,000 kyats.

Before YSX's opening, local investors were traditionally investing their money into real estate, foreign currencies, precious metals and increasingly into bank saving accounts.

A large number of investors have come to know the significance of injecting in the capital market when YSX was launched, said Aung Thura, a local finance expert.

The local real estate sector has declined recently due to the strong interest of investors in YSX. Moreover, YSX's attraction to investors makes it possible for Myanmar's currency to remain strong as U.S. dollar investors in the black market are rushing to sell their dollars.

Meanwhile, Myanmar's biggest public company, Myanmar Thilawa SEZ Holdings Public Limited (MTSH), will start trading on YSX as a second listed company on April 29. Other listed companies such as Myanmar Citizens Bank and First Private Bank will follow MTSH as soon as possible, according to Man Man Thein, president of the country's Securities and Exchange Commission (SECM).

"We welcome other listed companies to be part of YSX. The more listed companies on YSX, the more chances for investors to choose. It will encourage the market to develop," U Tun Tun, Director and Chief Financial Officer of FMI, told Xinhua.

Although the securities trading on YSX stood highest in early days, it had decreased before Thingyan water festival. The lowest volume of shares were traded on April 7 with 18,019 shares worth over 576 million kyats ( about 480,000 U.S. dollars).

It was due to the halt of most business during the water festival, said some local experts. The YSX will reopen on Thursday.

Aung Thura said that it was a normal status for a capital market. The highest trading in early days were due to people's interests as a new market.

The YSX officially began trading on March 25 with only one listed company, First Myanmar Investment (FMI) , being available for transactions. YSX was launched last December with six listed companies, two securities companies and one fund settlement bank although it was not ready for trading by then.

If Myanmar's new Company Act, which allows foreign investors to join YSX, is submitted to the new parliament, YSX's presence will be at a larger stage, according to Man Man Thein.

Dur to the fact that the majority of the people are not so familiar with the capital market yet and its banking sector is still under-developed, Myanmar's financial sector is far more weak as compared with other countries in Southeast Asia.

At present, there are five securities companies providing services as underwriters on YSX while another five firms are waiting to be awarded licenses.

Under an agreement signed on Dec. 23, 2014, YSX is owned by Tokyo Stock Exchange and Diawa Securities Group with 49 percent, and the state-owned Myanmar Economic Bank with 51 percent. Endit