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Myanmar Stock Exchange still floated, yet investors quiet

Yangon, Myanmar [03 Sept 2021]:  The Yangon Exchange has been hit by a major downturn of the economy caused by the coup and was already weakened by the global pandemic but still trading at a quiet and slow pace. The Chindwin has learned that there is only little impact – having a slight slump to 3% from the previous market year, according to YSX CEO.

The stock exchange in Yangon was opened in 2015 after former President Thein Sein introduced a liberalizing economic policy paving the way for corporations to establish an independent institution for the capital market. During the NLD government led by Aung San Suu Kyi between 2016 – 2020, the said bourse is gradually growing with seven companies listed in the exchange and are fervently offering IPOs on the stock exchange despite the high valuation assumptions of share prices in the initial offerings. The ticker symbols of the listed companies are known as FMI, MTSH, MCB, FPB, TMH, EFR and AMATA.

Despite the official launching of the Yangon bourse in 2015, traders, for the first time, were able to buy and sell securities in March 2016 with only one company offerings. Later, a few firms were listed the same year.

Senior Manager of the bourse, Mr. Thet Htun Oo was quoted as saying that, of course, there is an impact in the trading as people are afraid of the unforeseeable future amidst political instability and turmoils, they felt keeping money in-hands seem more appealing following a substantial drop in share’s price. Also, the banking restriction on cash withdrawal makes the trading harder than before, as quoted by adding that we are not severely affected due to the real-time interbank fund transfer system. That means those who have bank accounts in securities institutes allow trading more easily.

In early 2021, the total market cap is 719 billion (MMK), which dropped to 689 billion (MMK) as equivalent to USD 424 million at the current exchange value. The initial Myanpix index was over 1200 billion Myanmar Kyat. The insider confirms to Chindwin that the daily trading volume currently stands at 15 million (MMK).

The recent announcement of Metro – a retail giant from Germany – about their exit from the country following Telenor – a giant telecommunication company from Norway – left the country oppressed by the junta is signaling that foreign investors are being driven out of the country.

Despite this setback, the Myanmar Stock Exchange surprisingly guarantees foreigners to trade in their listed stocks on the mainboard (MB) by sending buy or sell orders through securities companies holding securities business licenses issued by the Security and Exchange Commission of Myanmar (SECM), as well as trading qualifications provided by YSX.

The Yangon Stock Exchange was officially launched in 2015 after a third successful attempt after two unsuccessful Myanmar bourses: the Rangoon Stock Exchange, established in the 1930s, was closed down as the result of the military coup in 1962 after the nationalization of Myanmar’s public companies. The Myanmar Securities Exchange Centre’s second venture was established in 1996 with the help and in joint venture with Daiwa Security, traded quietly for elite and cronies which listed only two securities was a failure due to unpopularity.

Yangon Stock Exchange is an independent body holding a joint venture company status between MEB (Myanmar Economic Bank) and Japanese partners. YSX is the third stock exchange established in the country so far. The regulators reassure that there is no military influence over the management of the Yangon Stock Exchange as it was a registered independent entity and run by private firms.

Meanwhile, the drastic inflation of MMK’s currency against the USD significantly impacts businesses and markets. This creates uncertainty for the market and businesses unless the political trajectory changes towards democracy for the foreseeable future.

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