Myanmar’s new Yangon Stock Exchange will be open for business tomorrow, although in all likelihood actual trading will not start immediately.
The Asian state, which spent decades under military rule, is currently considered a major growth market, with foreign direct investment reaching $8 billion in the 2014/15 financial year, two years after Western sanctions against the country were lifted.
According to a CNBC report, the new bourse is the result of a $24-million investment in which state-owned Myanmar Economic Bank, Daiwa Securities and Japan Exchange Group participated. The latter two hold a 49 per cent stake in the bourse.
Strict eligibility criteria
Initially, only ten securities companies with conditional licenses will be allowed on the exchange to trade and provide underwriting services. As for companies that want to go public using the exchange, they will have to meet quite strict requirements for eligibility, such as having 100 shareholders, turning in profits for two years, and being compliant with tax legislation, according to one strategy consultant from Frontier Strategy Group, Adam Jarczyk, as quoted by CNBC.
What to Look for in a Liquidity ProviderGo to article >>
the exchange is expected to support local companies’ expansion
Myanmar’s deputy finance minister Maung Maung Thein, the official in charge of the bourse’s creation, however, told Reuters that the exchange will support local companies’ expansion, even if trade does not begin immediately. This, he said, was the right moment for Myanmar to get its very own stock market.
Channel NewsAsia reported that even if some companies from the country’s booming industries qualify at this point for trading on the new bourse, foreign investors will not be initially allowed to buy them. So, at first, the stock market will operate exclusively for local investors.