Myanmar listing goes to SGX

EQUITIES: Power firm makes listing choice, as Burmese bourse runs behind schedule

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

Thailand-based engineering company Toyo-Thai Corp plans to list Myanmar-focused subsidiary Toyo Thai Power Holdings on the Singapore Exchange through a US$100m–$200m IPO before the end of next year.

Toyo Thai Power, a joint venture between Thailand's Italian-Thai Development and Japan's Toyo Engineering, is conducting a feasibility study to develop a US$2bn 1,000MW coal-fired power plant in Myanmar.

"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 company is currently developing a 120MW gas-fired power plant in Myanmar.

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 chase 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.

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 or not they are better off listing on larger bourses when they look at the examples of Cambodia and Laos, the last 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 at launch are still the only stocks there and trading volumes are thin.

While the potential new listings will be a welcome boost to the SGX, it will want to avoid the kind of governance problems that some "S-Chip" listings of Chinese companies faced because Myanmar is still a frontier market.

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: http://www.news.myanmaronlinecentre.com/2013/09/14/myanmar-listing-goes-to-sgx/