Stock exchange won't be delayed

The involvement of the Japan Stock Exchange means that the task will proceed as planned, Shinsuke Goto, a director of Daiwa Securities Group Inc told the KPMG Myanmar Business Forum. Daiwa Securities has provided assistance to set up the exchange.

“If you have been to Japan, you will be amazed by its transportation system. Every train and every bus comes on time. As this is the project initiated by Japan, there are no worries about it. The train will arrive on time,” said Goto at the forum called “Getting Ready for the 2015 Yangon Stock Exchange”.

“Every preparation for the stock exchange is on schedule. We have many challenges, and we still have many miles to go, but I can definitely say that the stock exchange will be opened next year.”

According to Goto, the bourse will start operations in October. In the first six months, from October 2015 to March 2016, about five companies are expected to be listed. 

To date, two companies have committed to list on the bourse. 

MAPCO and AGD Bank said they will list on the YSE, and Daiwa has almost reached agreements with other companies. Goto said that Daiwa is taking both formal and substantial requirements into serious consideration, when choosing listed companies in the initial stage.

When talking about formal requirements, Goto said, “For example, number of shareholders must be more than 100. The capital amount of a public company should be at least Ks 500 million. The firms have to issue new shares so that 20 per cent [of the shares] will be owned by minority shareholders.”

He added that sustainability, corporate governance, and reputation of the firms will be seriously considered as substantial requirements.

There are concerns that the 2015 schedule would not be met given lack of infrastructure and human resources. 

To pave the way for a capital market, the Securities Exchange Law was enacted last July. However, the Securities Exchange Commission, which is a regulatory body for the market, has not yet been established. The SEC will issue the licences for the stock exchange, and securities companies. The SEC is expected to be formed by mid-July, said Goto.

Myanmar’s only other experience with a stock market was the Rangoon Stock Exchange, which operated in the 1930s and was shut the next decade during World War II. Stock trading was revived in late 1950s but was later shut again due to internal political strife.

The YSE will be the youngest exchange in Asean. Several member states in the region – chiefly Malaysia, Singapore and Thailand – are in the process of integrating into the Asean Exchange. 

With help from Korean Exchange (KRX), the Cambodia Securities Exchange was officially opened in February 2010. Also with help from the Korean Exchange, the Lao Securities Exchange was officially opened in October in the same year.

To date, there are only three companies listed on the bourse in Laos and only two in the bourse in Cambodia.

Panellists at the KPMG forum remained confident that the YSE would be a success, given that the economy has been driven by private companies. Private companies are being urged to run a test as to whether they are ready for the initial public offering.