Myanmar listing goes to SGX

Singapore is emerging as the equity market of choice for Myanmar-related financings, as the planned launch of the Myanmar stock exchange looks likely to be delayed from its original target date of 2015.

The US$100m–$200m IPO of Toyo Thai Power Holdings, the Myanmese subsidiary of Thailand-based engineering company Toyo-Thai Corp, is looking to list in Singapore before the end of 2014.

Toyo Thai Corp, a joint venture between Thailand’s Italian-Thai Development and Japan’s Toyo Engineering, is developing a 120MW gas-fired power plant in Myanmar. In addition, it is conducting a feasibility study to develop a US$2bn 1,000MW coal-fired power plant in Myanmar, which could be the precursor to an IPO.

“The Myanmar government is expected to approve the project before the end of this year, after which we will decide on the IPO,” a company source said.

The Stock Exchange of Thailand is said to be trying to convince Toyo Thai Power to list there instead, but Singapore appears to be winning the race to become the preferred venue for Myanmar listings.

Earlier this year, Myanmar-focused Yoma Strategic Holdings raised S$101.2m (US$79.7m) from a placement to fund an 80% stake in Meeyahta International Hotel in Yangon as part of a mixed-use property development in the business district.

The company, which is listed on the SGX, has real estate, agricultural and auto dealership businesses in Myanmar and China, and its share price has gained 80% in the past year.

Going electronic

Since last year, Japan Exchange and Daiwa Institute of Research have been working to develop Myanmar’s own stock exchange. There is an exchange of sorts, with share prices written on a whiteboard, but the plan is to develop an electronic bourse.

Koichiro Miyahara, senior executive officer of Japan Exchange, last month told a news agency that the Myanmar bourse was behind schedule for its targeted launch date of 2015 due to delays with the legal framework.

The Securities Exchange law was signed on July 31, six months later than planned.

While a domestic stock exchange is a matter of national pride, companies in Myanmar might question whether they are better off listing on larger bourses elsewhere when they look at the examples of Cambodia and Laos, the previous two exchanges to launch in Asia.

Cambodian casino operator Naga Corp trades more shares in one day on the Stock Exchange of Hong Kong than the entire Cambodia Securities Exchange did in the past six months – at 4.2m shares versus 1.3m. There is currently only one company listed on the CSX – Phnom Penh Water Supply Authority, which undertook its IPO in April 2012.

Laos introduced trading on its stock exchange in January 2011, but the two companies listed then are still the only stocks there and trading volumes are thin.

While the SGX will welcome the potential new listings, it will want to avoid the kind of governance problems that some “S-chip” listings of Chinese companies have faced. S-chips are Singapore-listed China-linked stocks.

SGX-listed Fraser and Neave underlined the risks of investing in Myanmar on August 29, when it announced that Myanmar Economic Holdings, its partner in Myanmar Brewery, had made a claim on the Singapore conglomerate’s 55% stake in the business.

source: IFRE

http://www.ifre.com/myanmar-listing-goes-to-sgx/21107560.article