Few firms ready for March IPO, says SEC

Only two or three companies will be ready to list on the Yangon Stock Exchange by March, when trading is expected to start, according to an official at the Myanmar Securities and Exchange Commission (SEC).

Six companies have been approved to list on Yangon’s new stock exchange, and officials had originally hoped those firms would all be able to start trading on the exchange in February or early March.

The chosen companies are First Myanmar Investment Company, First Private Bank Limited, Great Hor Kham Public, Myanmar Agribusiness Public Corporation (MAPC), Myanmar Citizens Bank and Myanmar Thilawa SEZ Holdings Public.

But Daw Tin May Oo, an official at the SEC, told The Myanmar Times this week that not all the companies would be ready by March. Only two or three would likely qualify to launch in time, she said.

“The companies are still making important preparations, such as due diligence, corporate governance structure and other legal requirements,” she said.

Financial sector sources had also heard that not all the companies would be ready for an IPO by March.

“It will be awkward for the exchange if not all the companies are ready in March,” said U Soe Thein, former deputy director general of the SEC. “But even if the SEC thinks the firms are prepared, orderly development is still important in the initial stages.”

Getting the six companies ready in time was always going to be difficult. Sources at a number of the companies told The Myanmar Times in December they still needed to open offices, hire staff and install the necessary software.

Sources in the wider financial sector had also held out little hope that all six companies would be ready in time. Some of the firms are still in the process of working with advisory firms, law firms and auditors, sources said.

Underwriters are similarly unprepared. Of the 10 companies selected as underwriters, the only one to open an office is KBZ Stirling Coleman Securities. The other nine are still hiring staff, building infrastructure, setting aside the necessary capital and setting up offices, said sources at those underwriters.

Some companies are unlikely to be ready even in 2016, according to people close to some of the firms. U Zaw Zaw, an external auditor for Great Hor Kham, said some of the chosen companies would not conduct an IPO in 2016. U Zaw Zaw did not specify which ones.

KBZ Stirling Coleman Securities is working as an underwriter for Great Hor Kham, and would like to take between nine and 11 months to prepare for the IPO, said U Zaw Zaw. Great Hor Kham however, is eager for a shorter preparation.

U Soe Thein agreed that not all companies would be able to list in 2016. Several do not publish annual reports – an IPO requirement – and others were still working on their prospectuses, he said.

FMI’s chief financial officer, U Tun Tun, said his firm was in talks with several securities companies to help FMI open accounts for its shareholders. But he could not comment on when FMI might be ready to list.

“As a candidate for listing, the timing of our approval depends on the relevant authorities and is not determined by us,” he said. “We are working closely with YSX on the listing examination process.”

One Yangon-based financial consult said there was no issue around having a stock exchange with only a few companies listed. The modern incarnation of Poland’s Warsaw Stock Exchange opened in 1991 with only five companies listed and a first day’s trading volume of just a few thousand dollars, he said.

Source: Myanmar Times

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