ASEAN Exchanges: Myanmar Integrates Further
Myanmar’s Deputy Finance Minister, Maung Thein, has announced that the over-the-counter Myanmar Securities Exchange Centre (MSEC) will be replaced with the Yangon Stock Exchange in October 2015. So far, ten companies are expected to meet the criteria for initial listing on the exchange.
The Yangon Stock Exchange Joint Venture Co. is being developed in partnership with two Japanese firms, the Daiwa Institute of Research Ltd, which holds a 30.25 percent stake, and the Japan Exchange Group, with an 18.75 percent stake.
In August 2014, the Securities and Exchange Commission was established to oversee the planned exchange. Its powers are vested in it by the July 2013 SEC Law. The SEC will issue licenses for brokers, consultants, dealers, and underwriters. Applications are to be received until February 27, 2015. Qualifying applicants will be notified by mid-April.
Minimum capital requirements for brokerages are 7bn Kyats (US$6.8m), dealers 10bn Kyats, underwriters 15bn Kyats, and consultancies 30m Kyats.
Given that Myanmar is still somewhat of a financial ingénue, the country has been seeking the advice and assistance of a number of countries and organizations in order to properly develop its capital markets. As such, Memoranda of Understanding (MOU) have been signed with the Daiwa Institute of Research Ltd., Japan Exchange Group, the Ministry of Finance Policy Research Institute, the Stock Exchange of Thailand (SET) and Securities and Exchange Commission of Thailand, and the Korea Exchange (KRX). Additionally, under the ASEAN Bond Market Initiative, Myanmar has been receiving technical assistance from the Japan-ASEAN Fund for Technical Assistance (JAFTA).
Investors have been able to buy Myanmar government treasury bonds since January 2010, when the Myanmar Economic Bank (MEB) and MSEC were appointed as licensed agents.
Greater ASEAN Integration
With the goal of increasing financial integration across the ASEAN region, an MOU has been signed between ASEAN exchanges to facilitate capital market development by allowing companies to raise capital via the Indonesia Stock Exchange (ISX), Bursa Malaysia (BM), Philippine Stock Exchange (PSE), Singapore Exchange (SGX), Stock Exchange of Thailand (SET), Hanoi Stock Exchange (HNX), and Ho Chi Minh City Stock Exchange (HOSE). Over 3,000 companies are listed on the exchanges.
Additionally, the ASEAN Trading Link, launched in 2012, allows securities brokers to offer investors easier access to participating exchanges in Malaysia, Singapore, and Thailand, which account for the majority of the ASEAN exchanges’ market cap with approximately US$1.75 trillion.
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