Myanmar set to open first stock exchange

Myanmar is set to open its first official stock exchange in 2015 in cooperation with Asia's largest bourse as it prepares for an influx of investment following the end of decades of military rule. The Tokyo Stock Exchange said Wednesday that it had struck a deal with Myanmar's central bank to jointly open a bourse in the military-dominated country, along with Japan's Daiwa Securities, after years of discussions.
The move would "contribute to developing capital markets in the country", it said. The announcement came less than a fortnight after Myanmar began a managed flotation of its currency, overhauling its complex exchange rate system in the new government's most radical economic reform yet, to encourage investment.
The country, which languished for decades under a repressive junta, has announced a series of reforms since a controversial 2010 election brought a civilian government to power - albeit one with close links to the military. A stock exchange would be another step towards liberalising the economy of one of Asia's poorest countries, which is rich in oil and other commodities but has suffered from a long period of economic mismanagement.
Abundant natural resources, a strategic position in Asia and soaring tourist arrivals make Myanmar a "goldmine" poised for accelerating economic growth, the Asian Development Bank said Wednesday. It expects Myanmar's economic growth to pick up to 6.0 percent this year and 6.3 percent next year, from 5.5 percent in 2011 and an average of 4.9 percent over the previous four years.
But Craig Steffensen, who oversees the ADB's activities related to Myanmar, said the actual performance could exceed those forecasts "quite substantially" if the country successfully opens up to the outside world. "Myanmar is a goldmine," he told AFP in an interview. But Myanmar has a long list of reforms that need to be carried out in order to develop proper banking, fiscal, transportation, healthcare, irrigation and energy systems, he added.
"Capital market development has its place in time. (But) I'm not sure a stock market at this stage is as important as some of those other things that need to be done." Japanese and Western companies are increasingly eyeing business opportunities in the country formerly known as Burma.
Democracy icon Aung San Suu Kyi's recent election to parliament has been praised as a step towards democracy, and Western nations are beginning to lift wide-ranging sanctions on Myanmar as a reward for reforms that have included the release of hundreds of political prisoners. Also Wednesday, Japan's All Nippon Airways said it would restart direct flights to Myanmar later this year, after a 12-year hiatus. In 1996, Daiwa and the central bank set up the Myanmar Securities Exchange Centre, which allows over-the-counter sales of shares in two firms, a Myanmar timber company and bank.
But the planned bourse would be Myanmar's first official stock exchange. There were no immediate details on its size or how many firms would be listed. The Japanese exchange's move into Myanmar comes as its South Korean rival, one of Asia's largest bourses, has moved to expand its reach across the region, including helping Laos and Cambodia set up exchanges.