Foreigners are expected to be permitted in the near future to participate in trading on the Yangon Stock Exchange (YSX) upon the commencement of a new Companies Law, according to Htay Chun, a member of the Securities and Exchange Commission of Myanmar (SECM).
Myanmar is now on its way to enact a new law that will replace the existing decades-old company-related legislations. Deputy Minister for Planning and Finance Maung Maung Win submitted a bill to the upper house of the country’s parliament on July 20.
It is currently impossible to allow trading by foreigners on the YSX, since the 1914 Myanmar Companies Act being used as the major legal set-up for company administration in the country considers a company foreign even if only one share is held by a foreign partner. But, when the new Companies Law comes into force, foreign investors are likely to be authorised to trade on the YSX as foreigners’ investment is seen necessary for development of the stock market, according to Htay Chun. SECM and YSX are cooperating to frame a system that would pave the way for foreigners to participate in the market.
However, well-devised proactive measures are needed to prevent the foreigner domination of the entire market, industry observers said. Further progress of the Exchange can be expected by allowing the limited participation of foreign investors who outpace local investors in experience, financial situation and technical skills, said Htay Chun.
The YSX, the first and only bourse in Myanmar, was officially launched on December 9, 2015 and started trading on March 25, 2016.
