Securities Commission chief: 'It’s not nuclear physics'

U Maung Maung Thein, chairman of Securities and Exchange Commission Myanmar (SECM), talks with Frontier about plans to open Myanmar’s first stock market in December.

How many companies submitted their expression of interest (EOI) to be listed by the October 23 deadline?

Ten companies submitted the EOI but I extended the deadline until the end of October. I can’t disclose the names yet. I can’t say whether these 10 companies are qualified or not; that’s why I can’t disclose their names.

Previously, you mentioned that you will start the Yangon Stock Exchange with around five companies, but now 10 companies have submitted EOIs. How will you decide on the final number?

Now, we have 10 [applicants] but these companies won’t be listed at one time. I think that listing them one by one makes more sense. If we have all these companies listed at once, I think the demand for the shares might go down.When we open the YSX in December, we will announce the listed companies and when their IPO’s will be issued. I still can’t say which company will hit the bell for the very first time. [He is referring to the tradition of ringing in the opening of share trading with a bell, already installed at the YSX.]

How about the securities companies. Haven’t 57 companies submitted applications for service provider licenses?

During the initial stage, we will give licenses to 10 companies as underwriters. But they are still being shortlisted and I can’t guarantee that all 10 companies will get the licenses. We will allow other licenses gradually.

You face the challenges of a lack of human resources. How did you overcome this problem?

We are providing training both locally and abroad continuously. We have foreign trainers providing local training and we send local staff abroad for the trainings every month. We still have a human resources problems, but less than before. Stock exchange subjects are not that difficult, not like Nuclear Physics. I would also like to mention here that there are many private courses pretending to offer training for the YSX. These are fakes. Please be careful about these fake trainings.

Some analysts raised the questions on the involvement of Daiwa in setting up the YSX. They helped draft the SE law, and they are a shareholder in the YSX. They are also the first licenced securities company. Isn’t there any conflict of interest here?

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The experts who helped draft the SE Law draft were sent by the Japanese government. You can’t say they were from Daiwa. They came from Japan but they had different duties. The shareholders of YSX – Daiwa and the securities company – are not same. It’s hard to imagine there will be a conflict of interest. For now, there is no way to make a profit from YSX. And Daiwa is not the only one who will get a securities license. Others will also get one.

In Myanmar, some enterprises’ stability depends on political developments. For instance, a Global Witness report came out last week that mentioned the involvement of Kanbawza Bank (KBZ) in the jade trade. KBZ is the settlement bank of the YSX. So the question is – how can you protect the YSX from politics-related instability? 

I don’t know yet what Global Witness wrote in their report. There might be accusations about companies listed on YSX, but we abide by domestic laws. We don’t know if [this alleged involevment] violates the country’s laws or not. There can be an impact if they violate the country’s law. It is another matter if they violate international laws. I still don’t see any companies [connected to the YSX] that are violating our laws.

Other countries’ stock exchanges have welcomed. A couple of days ago, I went to New York Stock Exchange and they showed me a hearty welcome. Other regional stock exchanges such as from Vietnam and Thailand have done the same.

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