Advertisement

Myanmar opens for business

Last week, Myanmar's stockmarket finally opened, with one company being traded: First Myanmar Investment Co., a local conglomerate.

Better late than never. Myanmar has been thinking about opening a stockmarket since the early 1990s. The Asian crisis and a wary military junta stymied the plan. But as the dictatorship began to loosen its grip in the early 2010s, gradually opening up the economy, setting up an exchange became more realistic. Last week, it finally opened, with one company being traded: First Myanmar Investment Co., a local conglomerate.

Advertisement - Article continues below

"The debut is an important milestone" for the economy, says East Capital Management's Karine Hirn. The military junta isolated the economy from the global system for decades, but it has allowed political and economic liberalisation that looks irreversible, as Wirtschaftswoche points out. Aung San Suu Kyi's democratic opposition to the junta won a free election last November. The Asian Development Bank reckons that the country will need $80bn of investment in power, transport and technology projects by 2030 to modernise its economy.

Bolstered by a flood of foreign direct investment thought to have jumped from zero to $8.1bn in the past six years the economy grew by 8.5% last year. It has plenty of potential. Natural resources range from oil and gold to jade and copper.

With only 3.1 million visitors in 2014, there is vast scope for tourism to expand: Thailand received 24.8 million in 2014. Its 51-million-strong, young population constitutes a huge labour pool and a big domestic consumer market. "Given its location, young population and low wages, Myanmar is perfectly positioned to develop a low-cost export industry," says Bloomberg.

There is a long way to go. The state dominates the economy, ethnic tensions remain, and infrastructure is basic. But the government is working on allowing foreign investors access to the exchange. One way in is via a Singapore-listed vehicle that invests in Myanmar, Yoma Strategic Holdings (YOMA). Aim-listed Myanmar Investments International (MIL) is also worth a look.

Advertisement
Advertisement

Recommended

Bullish investors return to emerging markets
Stockmarkets

Bullish investors return to emerging markets

The ink had barely dried on the US-China trade deal before the bulls began pouring into emerging markets.
27 Jan 2020
Beware the hidden risks when investing in emerging markets
Investment strategy

Beware the hidden risks when investing in emerging markets

Emerging markets look cheap compared with developed countries, but earnings may be less trustworthy.
23 Dec 2019
How long can the good times roll?
Economy

How long can the good times roll?

Despite all the doom and gloom that has dominated our headlines for most of 2019, Britain and most of the rest of the developing world is currently en…
19 Dec 2019
The British equity market is shrinking
Stockmarkets

The British equity market is shrinking

British startups are abandoning public stockmarkets and turning to deep-pocketed Silicon Valley venture capitalists for their investment needs.
8 Nov 2019

Most Popular

House price crash: UK property prices are falling – so where next?
Property

House price crash: UK property prices are falling – so where next?

With UK property prices falling for the first time in eight years, are we about to see a house price crash? John Stepek looks at what’s behind the sli…
2 Jul 2020
The end of the bond bull market and the return of inflation
Inflation

The end of the bond bull market and the return of inflation

Central bank stimulus, surging post-lockdown demand and the end of the 40-year bond bull market. It all points to inflation, says John Stepek. Here’s …
30 Jun 2020
How “support” and “resistance” can help you spot trading opportunities
Sponsored

How “support” and “resistance” can help you spot trading opportunities

Technical analysis can help traders manage risk and decide where to enter and exit a trade. One simple form of technical analysis is the concept of “s…
6 Jul 2020