FMI plans to list on Yangon exchange

First Myanmar Investments intends to be one of the first to list on the Yangon Stock Exchange shortly after it opens in 2015, according to its chair Serge Pun.

The Myanmar public company aims to increase its access to capital to fund its project pipeline and has signed an engagement letter with Daiwa Securities of Japan to help it prepare to list.

“The stock exchange will be a watershed moment for the country,” Mr Pun said in a speech at FMI’s annual meeting on November 23.

First Myanmar Investments (FMI) will be “one of the first companies” to list on the exchange, he added.

The Yangon exchange is planned for late 2015, though questions surround whether this is an achievable timeline. However, several other companies have announced intentions to list, include Asia Green Development Bank and Myanmar Agri-Business Public Company.

Myanmar currently has over one hundred public companies that are permitted to sell shares on an over-the-counter basis, though rules and oversight is relatively lax, and the public companies themselves differ significantly in quality.

FMI is one of the longest running public companies in the country, having operated for 22 years. It is involved in a range of businesses, frequently collaborating with private company SPA and Singapore-listed Yoma Strategic Holdings, both of which are also chaired by Mr Pun.

“There are a lot of exciting projects in the pipeline and we need to raise capital for this to happen,” he said during the speech.

Listing the company will likely require revaluing assets, as many are being held on the company books at historical costs, he added.

FMI and Serge Pun are often associated with large-scale real estate projects, such as the Star City project, but the firm is branching out into different areas.

Mr Pun said FMI plans to concentrate on four core businesses going forward – financial services, aviation, health care and real estate.

The company will participate in businesses outside these areas, such as agriculture, but often not as an industry leader.

FMI will increase its share of Yoma Bank from 35.6 percent at present to 51pc, enough to give it control of the financial institution. Yoma Bank has a tumultuous history in Myanmar – it was one of the leading banks in the country until the 2003 banking crisis. While other banks failed, Yoma survived, though it had a restricted licence until August 2012, forcing it out of many business areas and requiring it to concentrate on domestic remittances.

However, Mr Pun said now that the bank has received its full licence, it is continually upgrading, highlighting a financing agreement inked with the International Finance Corporation as indicating support of the bank’s quality. He also unveiled new branding for the bank, having changed its slogan to “The responsible bank”.

“It is our intention not to be the largest bank in the country, but to be the biggest SME bank in Myanmar,” he said, adding the financial sector is perhaps the most important part of the economy.

“The banking sector is to the economy as blood is to the body.”

Yoma Bank and Telenor are also cooperating in mobile banking, Mr Pun and Telenor Myanmar CEO Petter Furberg revealed in an exclusive interview with The Myanmar Times on November 19.

The aviation industry also has lots of potential, according to Mr Pun.

Though the sector is increasingly crowded, with a number of airlines taking to the Myanmar skies in recent years, the number of passengers is still small.

While Thai airlines flew 40.7 million passengers in 2013, only 1.8 million flew with Myanmar carriers. Mr Pun said he predicts this ratio will change, as more tourists and businesspeople fly in Mynamar.

FMI Air is planning to start flying its 3 Bombardier jets after receiving the necessary accreditation. It has been flying to Nay Pyi Taw from Yangon, but also plans to add Mandalay, Heho and Bagan, along with other destinations.

Overall, FMI claimed revenues of K3.6 billion (US$3.4 million) for the 2014 financial year, a 78pc increase year-on-year. Net profits increased to K3 billion, a 107pc increase on the previous financial year.

The firm also conducted a private placement of 2.75 million shares at K10,000 a share, raising K27.5 billion for the company.


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