Foreigners residing in Myanmar will be permitted to buy shares on the Yangon Stock Exchange (YSX) from August 1, when the Myanmar Companies Law is scheduled to be enforced, U Thet Tun Oo, senior executive manager at the YSX, told The Myanmar Times on Monday.
The Securities and Exchange Commission Myanmar (SECM) will release a notification on the details involved when the Myanmar Companies Law becomes effective on August 1
“Resident foreigners will be able trade the shares of all five firms listed on the YSX. Trading by foreigners will begin with those residing in the country. For overseas foreigners, the procedures involve cooperation with the Central Bank of Myanmar and will be rolled in due course,” U Thet Tun Oo said.
The development should clear questions many have regarding a stipulation under the law allowing foreigners to invest up to 35 percent in the share capital of a Myanmar company.
It also marks a step forward for the YSX, on which trading volumes have been steadily falling. In June, a total of 131,120 shares worth K666 million were traded on the bourse, which is down from 157,666 shares worth K869 million traded in May.
Trade volumes appear to still be on the downtrend so far in July, with the shares of each of the five companies all falling in value. The companies listed on the YSX are First Myanmar Investment Co (FMI), Myanmar Thilawa SEZ Holdings, Myanmar Citizens Bank, First Private Bank and TMH Telecom Public Co.
“In order for these companies to expand their businesses, more capital from shareholders is needed. As such, foreign participation on the YSX is expected to lift share prices to a stronger level,” said U Tun Tun, CEO of FMI.
“With only a few listed firms and limited trading in the share of those firms, allowing foreigners to trade on the YSX can lead to higher trading volumes and liquidity, which in turn, will draw more firms to list, resulting in a deeper capital market in Yangon, said U Htay Chun, member of the SECM.