Japan-backed Myanmar stock exchange opens trading


Myanmar’s first stock exchange, which was set up with Japanese support, officially started trading Friday, more than three months after its official opening, though only one listed company was available for transactions.

On the Yangon Stock Exchange (YSX), First Myanmar Investment (FMI) hit a closing value of 31,000 kyats (around $26) at the end of the trading day, up 19 percent from its opening price.

YSX is being operated by a joint venture of the Daiwa Institute of Research; Japan Exchange Group Inc., which operates the Tokyo Stock Exchange; and the government-affiliated Myanma Economic Bank.

Myanmar has been working to set up financial and securities markets since a civilian government was established in 2011 after years of military rule. The Japanese Finance Ministry had cooperated with Myanmar in formulating the relevant laws, and Daiwa Securities Group Inc. had offered advice to local companies seeking to go public.

The Southeast Asian nation is in the midst of a dramatic transition from a graft-soaked backwater to a vibrant emerging economy, with Aung San Suu Kyi’s party days away from forming a government.

Twenty years after it was first conceived, the Yangon exchange officially opened for trading with the clang of a bell and cheers from a business elite who are hungry for investment.

Maung Maung Thein, head of Myanmar’s Securities and Exchange Commission, said it marked a “great day” for the country, which has now left the tiny club of nations without a functioning stock exchange.

“We can now proudly and mightily proclaim to the world that we are no longer a backward nation,” he told an assembled crowd of business leaders at the YSX’s restored colonial-era building in downtown Yangon.

Suu Kyi’s incoming government will in the coming week replace a transitional administration of retired generals who oversaw five years of political and economic reforms that pumped life back into the resource-rich country of 51 million people.

But significant hurdles lie ahead in a nation that still lacks a credit rating and is grappling with entrenched corruption and widespread poverty.

First Myanmar Investment is one of the country’s largest companies, with stakes in financial services, real estate and the aviation and health industries. The company is also involved in joint ventures with leading international firms, including Mitsubishi of Japan.

With its sister firm Yoma Strategic Holdings listed in Singapore, and with around 6,800 shareholders through an in-house system, FMI already has experience in stock trading and open investor relations, a rarity in Myanmar.

“We look forward to a buoyant economy, and we look forward to a robust Yangon Stock Exchange that will help many companies in Myanmar access capital and build their companies,” said Myanmar tycoon Serge Pun, who runs FMI, at the opening ceremony.

Several other firms have been granted provisional approval to list, including the Japan-backed Thilawa Special Economic Zone, but have yet to finalize their preparations.

The bourse is currently open only to domestic investors and firms, although there are plans to allow foreign involvement in the future.

Officials hope to attract between 30 and 50 firms to list in the next five years.

The bourse has been greeted with enthusiasm by local investors.

But with little practical experience of shareholding, dozens of people every week have flocked to classes run by YSX to learn about the risks and rewards of trading.

“I have learned a lot from books because I think that a stock market is good for our country,” said Soe Myint, 64, a retired officer from the Ministry of Energy who had arrived at the YSX hoping to buy FMI shares.