FMI weighed down by lacklustre market

Overall market weakness is the reason why First Myanmar Investment Public Company Limited’s (FMI) shares have performed poorly on the Yangon Stock Exchange (YSX).

The company, among five listed on the YSX, recently posted its full-year ended March 31, 2019 results.

While earnings dropped by almost 42 percent to K14.4 billion for the 12 months ended March 31, 2019 due to a spike in costs incurred to modernise and expand its businesses, FMI nevertheless raked in record revenues of K279.7 billion, which is up 36pc year-on-year.

This was mainly contributed by Yoma Bank, which saw its revenue increase by 36.5pc to K254.5 billion due to a rise in interest income from a growing loan book. Yoma Bank’s agriculture financing program which covers loan facilities and hire-purchase products also saw a steady rise in income.

Meanwhile, Pun Hlaing Siloam Hospitals enjoyed revenue growth of 32.6pc to K24.9 billion, on the back of stronger demand for its ancillary services and an increase in patient volume.

Yet, shares of the company have traded poorly, with little demand by retail investors. FMI executive director U Tun Tun blamed the country’s equities market’s slow development for the lack of interest and consequently the lackluster performance of the company’s shares. The YSX started operations in October 2015 but has faced obstacles in getting more businesses to list.

U Tun Tun told the Myanmar Times that the company has no control over such external factors which have affected not only its share price but also those of the other four companies listed on the exchange.

“We can’t do anything about the share price drop as there are external market factors involved. What we want to see is a more developed capital market because it not only benefits FMI but also the rest,” U Tun Tun added.

He explained that net profit was much lower because of increasing investment and expenses the company had incurred. Gross profit was actually up 52.2pc to K110.7 billion. U Tun Tun noted that the company would be prioritising the City Loft affordable housing project as well as open more hotels in Yangon and Myeik.

However, U Tun Tun does not feel that the current share price levels reflect FMI’s businesses. “Shareholders need to evaluate the value of the company’s shares through the businesses that we have,” he said.

Meanwhile, Central Bank of Myanmar deputy governor U Soe Thein said on June 30 that the government has been considering exemptions to support more businesses to list on the stock exchange as well as spur further development of the country’s capital markets.

“We are holding discussions with the stock exchange on how best to bring more interest into the market and develop the capital markets further,” he said.

At close of trading on July 3, shares of FMI traded at K11,000 apiece on low volume.

Source: Myanmar Times

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