MTSH falls upon trading ex-dividend, spurs rumours of share sale

Shares of Myanmar Thilawa SEZ Holdings Public Limited (MTSH), which is listed on the Yangon Stock Exchange (YSX), have plunged since trading ex-dividend on August 9.
MTSH has proposed a dividend of K260 per share for the financial year ended March 31, 2017. Shareholders will be asked to approve the dividend at the company’s 4th Annual General Meeting (AGM) on September 9.

The record date, or deadline for determining MTSH shareholders’ entitlement to a dividend, was August 11.

At the close of September 5, MTSH closed at K3,400 per share, down from a high of K4,200 per share on August 8 and K3,700 on August 9.

Market rumours

The sharp drop in MTSH’s share price sparked rumours that MTSH president U Win Aung had sold his shares in the company.

Those rumours are untrue, U Win Aung told The Myanmar Times on September 4. “I didn’t sell my shares. To do so, I will have to resign from the Board of Directors at the AGM in accordance with company regulations and procedures. If I am elected again at this year’s AGM with majority votes, I will continue to serve in accordance with the company regulations,” he said.

U Win Aung owns more than 5 percent in the MTSH, or 2.1 million shares, according to YSX statistics.

In total, the MTSH Board of Directors, which includes prominent business tycoon Mr Serge Pun, owns close to 40pc in the company. MTSH has a total of 38.93 million listed shares, according to YSX data.

Dividend stock

U Thein Han, managing director of MTSH, attributed the drop in share price to investors cashing out after the stock started trading ex-dividend: “Those who bought shares before or on August 8 will be entitled to a dividend but those who bought the shares after that date will only receive a dividend if they are still holding the shares next year. That explains the spike and subsequent drop in MTSH’s share price,” he told The Myanmar Times.

“This shows investors view the company as a dividend stock. In Myanmar, investors seem to be buying stocks for their dividends,” he added.

In fact, MTSH shares are also the most highly traded among the four listed companies on the YSX. More than 70pc of the volume of shares traded on the YSX stock market last year were MTSH shares. In terms of value, MTSH contributed some 35pc to the total amount traded, according to U Win Aung’s message to shareholder in the company’s Annual Report.

The company was established in 2013 by a nine-member consortium with the purpose of investing in the development of the Zone A Project , an industrial park within the Thilawa Special Economic Zone (SEZ). Located on the outskirts of Yangon, Thilawa is the first international-standard SEZ to be approved and built in Myanmar.

MTSH began selling shares to the public in 2014. Over 2.1 million shares were sold at K10,000 a share. After listing on the YSX in May 2016, its share price rose to K70,000 a share. However, due to poor trading volumes on the exchange as a whole, the share price fell to K42,000 in August 2016. Under a 1:10 share split in September 30, 2016, the par value of each share was change from K10,000 to K1,000.

Growth potential

During the financial year ended March 31, 2017, the company managed to divest 94.6pc of the Zone A Project, just around three years since the development began. In the company’s Annual Report, U Win Aung noted that full divestment of the project had initially been targeted over a period of ten years.

As a result, for the 12 months ended March 31, 2017, MTSH reported profits of K22.3 billion, which is up 8pc from the same period last year. That includes profits of K16.75 billion contributed by its subsidiary, Thilawa Property Development.

As at March 31, 2017, the company had cash reserves totaling K26.36 billion before paying dividends totaling K10 billion for the financial year.

Now, new prospects are opening up for MTSH, including investments in the development of the Zone B project across a 700-hectare site in Thilawa SEZ. Some 25pc of the total saleable area has already been leased and reserved.

“MTSH as a three-year-old company is now out of the incubation stage. We are no longer a start-up company,” U Win Aung said in his message to shareholders.

Moving forward, many more investors may choose to stay onboard with MTSH.

Source : Myanmar Times