After 50 years of isolation and sanctions, the opening up of Myanmar has been one of the hottest stories and getting lots of intention from international Business Sector.
We witnessed many changes in Myanmar in recent years, one of them being upcoming launch of Yangon stock exchange in first week of December. The original launch schedule has been pushed back on account of November 8t h election. This is a second time for exchange stock share in Myanmar. From the 1930s to 1941 and from the late 1950s to the early 1960s, there was a Rangoon Stock Exchange that operated in Rangoon (old name of Yangon).
The fledgling exchange, operated by seven European firms, was a secondary OTC market with most of the quotes sourced from Calcutta and Bombay exchanges. It closed down at the outbreak of World War II. The RSE was revived in the late 1950s to trade shares of nine public-private joint-venture corporations. But this OTC market too died in the 1960s when all the firms were nationalized by the military government that seized power in 1962. On 23 December 214, two Japanese firms, the Daiwa Institute of Research, the research arm of the Daiwa Securities Group, and the Japan Exchange Group, established a 50- 50 joint venture with the state-owned Myanmar Economic Bank to establish the Stock Exchange.
The Yangon Stock Exchange-Joint Venture Limited will have initial capital of Kyats32 billion (~USD 25 million@ current exchange rate) with Myanmar holding a 51 per cent stake and Japan 49 per cent. The Myanmar Securities Exchange Centre (MSEC) is the country’s only stock exchange, the renovated 80 years old former Central Bank Building, located on Sule Pagoda Road, in the center of Yangon . Listing criteria that laid out 17 points for public companies to meet had been published on August 23th .
One of the criteria to meet is that companies must have at least Kyats 500 million ( US$ 400,000 ) in paid-up capital and companies have also been asked to prove they have paid their taxes for the past five years. The minimum capital requirements for Yangon Stock Exchange participant licens- es are Kyats 15 billion for underwriters, Kyats 10 billion for dealers, Kyats 7 billion for brokers and Kyats 30 million for consultants.
Several companies eye to list on stock share exchange in- cluding Asia Green Development (AGD) Bank under Htoo Group of Companies and First Myanmar Investment, the sister company of Singapore listed Yoma Strategic Holidays. There was a however warning against illegal share sales. Dr. Maung Maung Thein, chair of the Securities Exchange Commission of Myanmar as well as the Deputy Minister of Finance said, “We will issue a warning against the illegal sale of shares when the stock exchange goes online. Under the Stock Exchange Law, an offender can be sentenced to five years in prison. Action will be taken against those who sell their stakes illegally.”
In June 2015, Future Foreign Currency trading over internet Company, Global Growth allegedly cheated US$1.48 million (Kyats 1.65 billion) and fled with customer investor’s fund according to local newspaper 7day Daily. The company reportedly told its clients that it is a branch of Standard Bullion, a member of the Chinese Gold and Silver Exchange Society. Company had operated at Sakura Tower, one of more expensive office buildings in downtown Yangon. Its founder, Mr NG Kwok Fai also allegedly scamed and fled at Vietnam in 2008 and claimed that its parent company was the Canada-headquartered Richmark International Group.
It has opened two separate offices on different floors of Sakura Tower.
Global Growth dealt in contracts for commodities such as gold and foreign currencies and a Special Program called Global Group Investment Program –GGIP. Clients were asked to deposit money to open an account and traded by expert who is supposedly well-versed in Stock Share exchange from foreign. Upon earns profits, experts will get 40 percent and Global Growth clients to the Company’s promotional materials will get 60 percent according. To lure in investors, Global Growth paid commission fees on investments at amazing, rate of up to Kyats 9 laks if customers invest 100 laks and 2 laks for 5 million Kyats of initial investments. Current local banks saving interest rate is 8.25 percent per year.
Global Growth had allegedly cheated around US$1.48 million from customers from Myanmar are short on knowledge and reliable investment opportunities allegedly. At present, about 6 or 7 companies offer free training in foreign exchange and commodities trading. They educated prospective customers about their business models in the offices of the largest business federation in the country and use facebook to advertise their business. Most of them have 3 or 4 package starting from US$ 10,000 for basic investment package. They pitch weekly using of 2 % and 8 % for monthly. Investors must sign a minimum of one year contract. According to current rules by the finance ministry and the Central Bank of Myanmar, business in the deposit taking businesses need to have licensed to do that. Investors, before parting their money, must look for that as a bare minimum due diligence.
