The Global New Light of Myanmar’s monthly market commentary for January 2023 provides insights on gold market movements, the resumption of cross-border posts and bridges and a key economic event regarding the Directorate of Investment and Company Administration’s new policy on nominal directors.
Gold market outlook
The pure gold price in early January 2023 hit over K2.7 million per tical (0.578 ounce or 0.016 kilogramme) in the domestic markets. On 4 January, as a celebration of the 75th Independence Day (Diamond Jubilee), new designs of 1 tical and 0.5 tical gold coins have been on sale at the respective shops in Nay Pyi Taw, Yangon and Mandalay of the MGE from 5 January 2023, along with other old coins.
The sales price is K2.5 million per tical. The 1 tical gold coin is valued at K2.58 million per tical, including making charges of K80,000. The final price of gold is K1.292 million per 0.5 tical with making charges of K42,000. For 0.25 tical, the market value is K647,000 including making charges of K22,000.
Afterwards, the global gold spot price rallied to above US$1,940 per ounce in the second week of January. Consequently, the yellow metal price peaked at over K2.8 million per tical in the domestic market. As a result of this, the reference price set by Yangon Region Gold Entrepreneurs Association (YGEA) was raised to K2,287,000 per tical.
YGEA calculated the price depending on the Central Bank of Myanmar’s reference exchange rate of K2,100, with some addition, while the US dollar is exchanged at K2,860 in the unofficial forex market.
There is a price difference of over K500,000 per tical between the YGEA’s reference price and market price.
The YGEA released a statement on 11 January that the actual market price settled in gold transactions was below K2.7 million per tical. Those unscrupulous traders are manipulating the market with malicious rumours to drive the price higher or lower for personal gains, as per the statement.
The market is quite slow-moving yet the price continues rising. The YGEA called for concerted efforts to control price fluctuation, as mentioned in the statement.
At the end of January 2023, global gold spot prices stood at US$1,915 per ounce while YGEA set reference price at K2,256,500 per tical and pure gold price touched a high of K2,852,000 per tical in the domestic markets.
Reopening of land borders and cross-border bridges
The bridges in border areas were shut down amid the COVID-19 negative consequences.
Operations at Myawady-Maesot Friendship Bridge I were resumed on 12 January 2023 after nearly three years of closure and the authorities from Thailand and Myanmar counterparts formally reopened the bridge at 8:30 am on 12 January 2023.
That bridge is the major border trading route between Myanmar and Thailand. The border crossing ceased amid the COVID-19 cases on 23 March 2020.
Efforts were made to reopen the bridge. However, it has been closed down for nearly three years amid coronavirus infections in both countries. The bridge has been reopened for now. It will bring about job opportunities for the local community and freight forwarders.
Therefore, people can enter the Maesot side by passing that bridge with the border pass as before.
For a border pass document, Myawady residents can apply for it by presenting a citizenship scrutiny card, household registration and three pictures of the licence photo size.
The licensed private cars are entitled to go over the bridge and the passengers need to present COVID-19 vaccination certificates. Furthermore, border crossings with passports are also allowed and Myanmar migrant workers can also return home via the bridge as before.
Similarly, Mang Weing linking to Muse border post, which is a major crossing point between Myanmar and China, was reopened on 14 January (7 a.m.) 2023 in presence of the officials of the two countries after a nearly two-year hiatus from 30 March 2021.
However, only six-wheel trucks driven by Myanmar drivers are allowed to pass the Mang Wein crossing. Other trucks are still not given the green light. Passengers are not entitled to pass it as well.
Additionally, other goods except for agricultural products (watermelon, muskmelon), minerals and fisheries products are allowed to be sent to China through that border point. Meanwhile, China gives the go-ahead to the imports of construction goods, electrical appliances, medical devices, industrial equipment, consumer goods, household goods and food products only through that border post, U Min Thein elaborated.
Additionally, Nantaw and Sinphyu checkpoints at the Muse trade zone were reopened on 25 January 2023.
At present, those residents holding Muse’s household registration are allowed to pass the border points by making a border pass at the district’s immigration office. Those from other regions and states are still not entitled to pass the border points. Negotiations are still underway. The ban is yet to be lifted. Motorcycles and small vehicles are also given the go-ahead to pass the Sinphyu border point.
Alternate directors and shareholders not allowed
Alternate directors and shareholders will not be allowed, according to a notification released by the Directorate of Investment and Company Administration (DICA) dated 17 January 2023.
By exercising the power conferred by Sub-section 462 (A) (II) of the Myanmar Companies Law, the DICA hereby notified that alternate directors and shareholders shall not be permitted.
According to Chapter 18 stipulated in the Myanmar Companies Law, regarding the rights of the directors and officials, those who direct corporate affairs are considered directors even if the position of the director is not appointed. Additionally, the appointment of alternate directors is allowed under the existing law. Electing alternate directors is not officially approved.
Furthermore, any person who holds the shares has to submit the registration to a registrar and make entries in the register of the participants of the companies, stipulated in the Myanmar Companies Law.
At present, some countries permit the registration of alternate shareholders and practice a system in which the beneficial owner is separately disclosed.
However, company registration with alternate shareholders is not allowed in Myanmar. Those registered persons and legal entities kept in the company file and registered with the registrar are considered actual beneficial proprietors.
Furthermore, the information of beneficial owners can be observed at a prescribed fee under Section 421 of the Myanmar Companies Law.
This notification has come into effect from 17 February 2023.
Following that notification, the owners of foreign companies have to stay in the country instead of the alternate director. Yet, it could pose problems and challenges to some foreign firms during the pandemic and in the state of political turmoil, Myanmar Enterprise Solutions indicated.
Under the Myanmar Companies Law, each company must have at least one director who must reside for more than 183 days in the State. Thus, foreign firms usually appoint Myanmar citizens or foreigners who stay more than 183 days in the country as alternate directors. Alternate directors are officially permitted in other foreign countries as well.
Myanmar Enterprise Solutions elaborated that it would be more appropriate if alternate directors are allowed and only alternate shareholders are unconstitutional. — NN/EM