Expert backs public firm for sustainable growth

"Establishing public companies plays a crucial role in our country’s development," said Professor Aung Tun Thet, Economic Adviser to the President.

"But we need to take one thing into account -- if such companies were established systematically or not. Currently, the majority of firms which are privately owned, usually by either one individual or by a small group of individuals, want to transform as public companies. They shouldn’t merely change their names. They should turn out to be reliable for all the people.

"One of the shortcomings of privately held companies is that they usually have to run their operations within the possession of the owners," added Aung Tun Thet, who is also a senior adviser to United Nations Resident Coordinator’s Office.

"So they usually have a proper budget limit. Unlike them, the more people become interested in a public company, the more it can invest in their projects. So establishing public companies is an essential mechanism for strengthening private sector development."

The presidential adviser said that the most important individuals in a public company are those who buy its shares.

"Shareholders are also owners of public companies. They have rights as well as responsibilities. In our country, most people usually discuss about their rights only, regardless of their responsibilities," he said.

The adviser added that the main responsibility of shareholders is to choose the Board of Directors, which will then appoint an outstanding individual as chief executive officer.

"The management skills of the CEO and BOD play a pivotal role in a public company. They have to take the interest of the shareholders into serious consideration. They have to ensure guarantees for the shareholders in compliance with the law," said Aung Tun Thet, adding that good corporate governance is essential for setting up a public company.

The professor’s view was echoed by Thet Htun Oo, deputy director at Myanmar Securities Exchange Centre.

"All the high-ranking officials at a public company should improve their skills. And capacity-building programmes such as sending the staff to training courses in their homeland and abroad, conducting workshops, etc. are essential," he said, adding that such a company also needs to invite experts’ opinions, in addition to uplifting the skills of personnel.

"[The] CEO has to design future plans, short-term and long-term plans, set up a profit-sharing policy. Risk management, a feasibility study and corporate strategy are also very important. Protecting company information and insider trading is also crucial. And company officials need to know about the market perfectly well before the initial public offering (IPO)," continued Thet Htun Oo.

The MSEC official added that the capital structure should be finalised before the launch of the IPO.

"Public companies should sell their shares at a reasonable price so that everyone can invest in their projects. If they sell the shares with a very high price, which the general public cannot buy, they may face difficulties when they try to be listed on the stock exchange," said Thet Htun Oo.

Currently, there are about 200 public companies in the Southeast Asian country, most of which hope to become listed on the upcoming Yangon Stock Exchange, according to statistics.