2 Aug 2019
MYANMAR: Trading on Stock Exchange Opened-Up to Non-Locals
Foreign nationals and overseas entities – including locally-registered wholly foreign-owned enterprises as well as joint-ventures with local businesses – are to be permitted to buy shares on the Yangon Stock Exchange (YSX). Although the change has been approved by the country’s market regulator, the Securities and Exchange Commission of Myanmar (SECM), formal approval from the YSX is required before the proposal can move forward. In the three-month period before this expected to be forthcoming, it is unclear as to whether non-local investors will be permitted to make any such purchases.
The change is in line amendments to the Companies Law of 2017, which allow overseas investors to own a 35% stake in a Myanmar-registered business without prior government approval. Under the terms of the latest SECM regulations, however, companies listed on the YSX will be required to declare the percentage of their shares that are available to overseas buyers in advance. They will also be required to obtain prior approval from the SECM for the specified percentage of shares, while the YSX will be obliged to determine the date when such a trade may occur.
At present, only five companies are listed on the YSX, representing a combined market capitalisation of just US$400 million. The move to liberalise trading is intended to boost the country’s capital market and spur trading activity, while also making it more attractive for companies to list on the YSX.