Better late than never. Myanmar has been thinking about opening a stockmarket since the early 1990s. The Asian crisis and a wary military junta stymied the plan. But as the dictatorship began to loosen its grip in the early 2010s, gradually opening up the economy, setting up an exchange became more realistic. Last week, it finally opened, with one company being traded: First Myanmar Investment Co., a local conglomerate.
“The debut is an important milestone” for the economy, says East Capital Management’s Karine Hirn. The military junta isolated the economy from the global system for decades, but it has allowed political and economic liberalisation that looks irreversible, as Wirtschaftswoche points out. Aung San Suu Kyi’s democratic opposition to the junta won a free election last November. The Asian Development Bank reckons that the country will need $80bn of investment in power, transport and technology projects by 2030 to modernise its economy.
Bolstered by a flood of foreign direct investment – thought to have jumped from zero to $8.1bn in the past six years – the economy grew by 8.5% last year. It has plenty of potential. Natural resources range from oil and gold to jade and copper.
With only 3.1 million visitors in 2014, there is vast scope for tourism to expand: Thailand received 24.8 million in 2014. Its 51-million-strong, young population constitutes a huge labour pool and a big domestic consumer market. “Given its location, young population and low wages, Myanmar is perfectly positioned to develop a low-cost export industry,” says Bloomberg.
There is a long way to go. The state dominates the economy, ethnic tensions remain, and infrastructure is basic. But the government is working on allowing foreign investors access to the exchange. One way in is via a Singapore-listed vehicle that invests in Myanmar, Yoma Strategic Holdings (YOMA). Aim-listed Myanmar Investments International (MIL) is also worth a look.