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Foreign funding hopes push surge on Myanmar stocks

Decision to open doors to foreign investors pushes Myanmar Stock Price Index up 10%

Foreign investment is expected to flow into Myanmar after authorities have said that they would ease constraints to allow foreign investors to trade stocks in local businesses.

Despite worldwide unrest, the Myanmar Stock Price Index or Myanpix increased 10 per cent in August on these hopes. Local shareholders are also thinking about how they can profit from the anticipated bubble.

Local investor Ton with holdings in the First Myanmar Investment (FMI) real estate company has informed Nikkei Asian Review that he is contemplating purchase into the other four stocks mentioned on the Yangon Bourse or YSX.

“I expect foreign investors will raise the potential cost of the inventory of the FMI and Myanpix,” the Securities and Exchange Commission of Myanmar stated that it would allow foreign investors to retain, from the beginning of 2015 only, 35 per cent of each business quoted on YSX.

The announcement was a milestone in the economic development of a nation often defined as “the last frontier in Asia,” with a much-needed gunshot on the Myanpix. By April this year, the cpi had dropped two-thirds of its original valuation.

At present, the five listed companies have only approximately 690 billion kyats ($450 million) incomplete capitalisation on the exchange. Due to the small cpi magnitude, liquidity was also low. However, local authorities aim to attract 30 businesses to be listed on the cpi.

Companies are operating tough to draw overseas cash with the present business liberalisation schemes.

“We’ve given many lectures and shows to foreign investors to expect to greet foreign investors,” Serge Pun, Chairman of First Myanmar Investment, advised Nikkei.

He toured the nations of the Southeast Asian Nations Association as well as Japan and South Korea. “They are prepared to invest in Myanmar,” he said.

Kyaw Zai Wai, CEO of Thilawa SEZ Holdings, a YSX registered real estate developer focusing on constructing specific financial regions, said: “We believe that corporate governance is essential to attract foreign investors. We have been trying to enhance business strategy and investment connections.”

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