The expected opening of the Yangon Stock Exchange in October could potentially bring about greater business transparency gradually, Mark Chan, corporate finance partner at law firm Berwin Leighton Paisner, told Myanmar Business Today.
While the Japanese companies have been “very quiet” in their efforts to set up the Yangon Stock Exchange, local companies have been preparing the changes needed to list, even while it is not yet known which companies may be listed.
Those that list will have to abide by some rules regarding transparency and disclosure, but the exact rules are not yet known, and likely to be simpler than the rules of more developed countries.
The transparency will have to come in stages, said Chan, adding that overly strict rules might not be feasible starting out, which could drive companies away from the exchange.
This is unique to Myanmar. The length of a typical prospectus for a company listing on the Hong Kong stock exchange, for example, has gone from ten pages to over three hundred, owing to increasing regulation, said Chan.
There is also the question over which companies could list, and how they will be selected. The companies listed will need to be representative of the range of what to list, and be able to attract investment.
Chan is hardly alone in his concerns over the stock exchange regulations. Current laws prohibit foreign investment in domestic companies, and until the law changes, there will be questions about whether the stock market can attract sufficient investment from Myanmar investors.
