Foreign investors have purchased over 38,900 shares of three listed companies on the Yangon Stock Exchange (YSX) over the past three months, according to the statistics released by the exchange. The Securities and Exchange Commission of Myanmar (SECM) has allowed foreigners to invest in the local equity market from 20 March 2020. At present, shares of six listed companies — First Myanmar Investment (FMI), Myanmar Thilawa SEZ Holdings (MTSH), Myanmar Citizens Bank (MCB), First Private Bank (FPB), TMH Telecom Public Co. Ltd, and Ever Flow River Group Public Co., Ltd (EFR) — are available for local investors for trading. Of them, FMI, MTSH and EFR accepted foreign shareholding, and FPB is for block trade only. As of 10 July, foreigners hold over 5,700 shares of FMI, over 27,800 shares of MTSH and 5,380 shares of EFR.
The SECM, under the Ministry of Planning and Finance, issued a notice on 12 July 2019, announcing that foreigners would be allowed to invest in shares listed on the YSX. After opening bank and securities accounts, an investor is able to send buying/selling orders under the stock trading rules stipulated in the Trading Business Regulations, the SECM notified. The YSX held a seminar on ‘Foreign Participation in Myanmar Stock Market’ on 14 December 2019 at the Yangon Stock Exchange. At the seminar, U Than Aung, founder and CEO of Maximax Solution Corporate Advisory and Executive Learning Institute, presented investors’ perspective on foreign participation in the Myanmar stock market. U Thet Htun Oo, executive senior manager of the Yangon Stock Exchange, highlighted how foreign participation would entail better capital inflows, long term and sustainable investment, encourage good corporate governance, and support market orientation. Regarding the share trading, the foreign investors must strictly comply with the rules stipulated by the Central Bank of Myanmar. The security companies will monitor the daily trades of foreigners, in keeping with the rules and regulations, so that they do not exceed the limit set for each listed company. In accordance with Section 42 (a) of the Securities and Exchange Law and Section 4 of the Trading Participant Business Regulations, the YSX has granted trading qualifications to the following securities companies — Myanmar Securities Exchange Centre Co. Ltd. (MSEC), KBZ Stirling Coleman Securities Co. Ltd. (KBZSC), CB Securities Limited (CBSC), AYA Trust Securities Co. Ltd. (AYATSC), KTZ Ruby Hill Securities Co. Ltd. (KTZRH), and UAB Securities Limited (UABSC).
Investors have to send their buy or sell orders to the YSX through the securities companies who have been issued a licence by the SECM as well as a trading qualification by the YSX, according to the stock exchange. The YSX was launched three years ago to improve the private business sector. It disseminates rules and regulations regarding the stock exchange and knowledge of share trading through stock investment seminars.
To boost the trading, the YSX has doubled its stock trade matching time from two to four per day last year. The exchange launched 7 times matching per day on 26 March 2020. In addition to this, it has held promotional events to attract new investors and encourage existing investors to trade more actively. The stock exchange has also sought the government’s support to get more public companies to participate in the stock market and help more institutional investors, such as financing companies, investment banks, and insurance companies, to emerge. A total of 2.4 million shares worth K13.39 billion were traded on the YSX in 2019, a significant increase compared to the previous year, YSX stated in the annual report.—Ko Htet (Translated by Ei Myat Mon)