First Private Bank may mull delisting from the YSX

First Private Bank (FPB) appears to be mulling a delisting from the Yangon Stock Exchange (YSX) at a time when many more companies are needed on the bourse to boost trading and develop more robust capital markets.

Among the 11 general resolutions passed during the company’s 26th Annual General Meeting on August 27 was one delegating authority to the Board of Directors (BOD) to delist FPB’s shares for the purpose of protecting its shareholders “if and when it becomes necessary.”

The statement comes just nine months after FPB became the fourth company to list on the YSX.

“It means getting the approval of shareholders for the mandate to the BOD. An actual delisting will depend on market conditions. At present, we cannot say anything,” FPB senior executive director and joint secretary of BOD U Zaw Myint told The Myanmar Times during the Yangon Stock Exchange Expo held on September 10.

While no confirmation was given, FPB may well be planning to delist if its share price continues to fall. On the face of it, FPB’s listed status has not been very beneficial to its shareholders so far.

Shares of FPB closed September 13 at K24,000 each, down about 30 percent from its listing price of K34,000 on January 20. Before listing, FPB shares were priced at K39,000 each.

Currently, FPB has over 8,400 shareholders, K100 billion in authorised capital, K24.72 billion in paid-up capital and 34 branches.

YSX blow

If FPB files for a delisting, it would be a huge blow to the YSX, which opened on December 9, 2015 and commenced share trading in March 2016. However, it has only managed to attract four listings so far. What’s more, the market value of all four companies listed has fallen owing to a lack of trading interest and liquidity.

U Maung Maung Win, chair of the Securities Exchange Commission of Myanmar (SECM), said it is necessary to have more listed companies on the YSX to deepen the capital market in the country.

The stock exchange has been trying hard to attract more companies to list, announcing measures reducing corporate taxes for listed firms to just 5pc from 20pc before and offering exemptions and forgiving fines.

“Compared to our neighboring countries, we have far fewer traders and listed firms. Raising the number of firms listed on the stock exchange is the main requirement for further equity market development,” U Maung Maung Win said.

If FPB is delisted, it will further tarnish the reputation of the YSX. It is now trying to develop stock market.” If one listed company is delisted, it can severely affect the YSX image. It will be like taking a step backwards at a time when the nation’s economy has been slowing. A delisting will not help the other companies listed, nor will it be beneficial for investors,” said Dr Maung Maung Thein, YSX pioneer and former deputy minister for the Ministry of Planning and Finance.

A major shareholder of FPB, who was present at the YSX Expo, told The Myanmar Times, “We will accept what the BOD decides. Either listed or not, we will have to trust in the company’s decision.”

Source : Myanmar Times