Myanmar’s stock market needs institutional investors to drive the industry

11 February 2019

U Thet Htun Oo, executive senior manager of the YSX said that Myanmar stock market is currently running with individual investors without established institutional investors, leaving the stock market inactive.

Yangon Stock Exchange (YSX) was officially established in December 9th 2015and the stock trading began in March 2016.

“There are only too many individual investors; no institutional investors. So the market is not active. In international market, the institutional investors are mainly supporters for the market. For example, pension firm, endorsement firm, social security firm, university firm… the bodies like these play a role in the market. And we don’t have the institutional investors as such. So we are working with the government to bring up more of such investors in the country,” said U Thet Htun Oo.

January saw the trade volume of 89576 shares worth K526 million and 80,000 block trades worth of K485 million. In total, over 160,000 shares were traded. That is a drop in trade volume from 1.2 billion kyats of last year.

The Myanmar Stock Price Index, or Myanpix, closed at 396 after January 7 –down from the usual base line. Only five companies have listed so far on the YSX, which has roughly 100 active investors among more than 30,000 account holders.

YSX is currently trading the stock shares of the 5 companies; namely First Myanmar Investment Public Co., Ltd.(FMI), Myanmar Thilawa SEZ Holdings Public Ltd.(MTSH), Myanmar Citizens Bank Ltd.(MCB), First Private Bank Ltd.(FPB), TMH Telecom Public Co., Ltd.(TMH).

Share of FMI goes at K9000, Thialawa K2900, Myanmar CItizen Bank at K7200 with First Private Bank Ltd.(FPB) at K22000 and K2400 for TMH telecom in January. And on a daily basis, we sold stocks worth of about K46 million.

He also commented on the changes of the stock market over the last three years since the inception of the market.

“YSX has sold, since its inception over three years, 3.7 million shares with K116 billion till the end of 2018. “

YSX and Government also launched a new task force -- funded by the Japan International Cooperation Agency -- with a mandate of promoting listings and helping the country’s companies see the benefits of joining the YSX.

“The government is required to oversee the regulations and update the law and policy as necessary. Second point is the tax, the government should consider tax reduction for the listed companies for stock trading to promote the market. According to Union Tax Law, the listed companies who enter the stock market now enjoy 5 % tax reduction but we have been noted that more reduction in tax and support from government is required to promote this culture.

Also, the growth of the capital market is vital for the country’s economic growth and the government should be well aware of it and provide more support, he added.

Recently, it is reported that the regulations to enable foreigners to participate in the local stock market are in the last stage and have been submitted to the Ministry of Planning and Finance.

Arker Kyaw