Trading on Myanmar’s new exchange has launched, with only a single stock appearing on the board.
Trading on the Yangon Stock Exchange (YSX) opened March 25 with a single firm – First Myanmar Investment (FMI), a holding company operating in the financial services, real estate and health care sectors, debuting on the exchange.
FMI did not issue any new shares in its float, instead transferring its existing stock, which had previously been available through over-the-counter (OTC) trading, to digital accounts.
Early exchange fluctuations
Early trading in FMI’s shares saw a high degree of volatility, with strong gains in the first few days offset by subsequent declines.
Having opened with a market capitalisation of MMK610bn ($515m), FMI saw its valuation rise to MMK845bn ($717m) before slipping somewhat on profit taking.Ahead of the opening of trading, Serge Pun, chairman of FMI, said he was confident that, given time, the YSX would mature and develop.
“We are, in a way, fortunate being a late starter in developing a capital market, in that we can adopt the key success and avoid the failings of others in front of us,” he told regional media in March.
The development of Myanmar’s capital markets will offer alternative access to funding for companies, according to Linus Goh, head of global commercial banking and executive vice-president of Oversea-Chinese Banking Corporation.
“The establishment of the YSX will eventually offer equity-related or quasi-debt financing options, although its initial opening will be more symbolic than substantive in terms of offering a channel for Myanmar-based companies,” he told OBG earlier this year.
The YSX is 51% owned by the Myanmar Economic Bank (MEB) and 30.25% owned by Japan’s Daiwa Securities, with the remainder held by the Japan Exchange Group.
MEB and Daiwa are also partners in the country’s only other capital market, the Myanmar Securities Exchange Centre (MSEC), which was established in 1996.
To date the MSEC has gained little traction, with just two equities listed. Expectations are higher for the YSX, however, with additional firms expected to list in the coming months.