PWC MYANMAR WEEKLY BUSINESS INTELLIGENCE - ISSUE 160 10 MAY 2019
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www.pwc.com/mm PwC Myanmar Weekly Business Intelligence Issue 160 10 May 2019
Disclaimer PricewaterhouseCoopers Myanmar Co., Ltd helps organisations and individuals create the value they’re looking for. We’re a member of the PwC network of firms in 158 countries with more than 250,000 people who are committed to delivering quality in assurance, advisory and tax services. Tell us what matters to you and find out more by visiting us at www.pwc.com/mm. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors. © 2019 PricewaterhouseCoopers Myanmar Co., Ltd, a company duly established and operating under the laws of Myanmar. All rights reserved. PwC refers to the Myanmar member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details. The information contained in this publication is for general guidance on matters of interest only and is not meant to be comprehensive. The application and impact of laws can vary widely based on the specific facts involved. Before taking any action, please ensure that you obtain advice specific to your circumstances from your usual PricewaterhouseCoopers Myanmar Co., Ltd client service team or your other tax advisers. PwC | May 2019 2
1. Weekly Key Financial & Business News PwC | May 2019 3
Weekly Key Financial & Business News
Headlines
Property market in Myanmar expected to stay flat till 2020
ADB chief pledges more investments in private sector
Myanmar Tourism Bank starts operating first branch
Housing project for fire victims set to be finished end of this year
Rental transactions rise in Yangon, even as larger market stays muted
PwC | May 2019 4Weekly Key Financial & Business News
Headlines
A Renewable Vision for Myanmar
Myanmar’s economy towards GE2020 and beyond
Contract farming to help farmers deal with challenges
Avoid debt trap when engaging Belt and Road: analysts
Deadline for Yangon sky train land compensation announced
PwC | May 2019 5Newspapers
Myanmar Times
Property market in Myanmar expected to stay flat till
2020
06 May 2019
Myanmar’s property market has been lacklustre Affordable options
since 2015 and this situation is expected to The need for low-cost and affordable housing, if
continue until next year, said U Myo Myint, addressed, could serve as a stimulus for the
general secretary of the Myanmar Construction overall market, Daw Yin Yin Myat added. “The
Entrepreneur Association during an industry drop in demand has dragged the market down
discussion in Yangon last week. with it. This can be attributed to the fact that
“This is the current situation. However, what is many people who need housing simply can’t
good is that there will be no worsening in the afford it,” she said.
conditions or a downturn. We cannot say On the other hand, the market did receive a small
precisely whether the market will climb in 2020 boost over the last year due to the introduction of
as a lot depends on the policies of the long-term home loans by private and government
government,” he said. banks. While still out of reach for many, the loans
The cost of construction is now high due to the are a great help to the middle class although not
strength of the US dollar, so property prices are Developers marketing apartments priced between
not expected to fall from their current levels as K20 million and K120 million have seen some
the dollar price goes up, U Myo Myint added. interest in their offerings thanks to the
Property transactions have decline by 50 percent introduction of the loans, said U Kaung Thu Win,
from their peak five years ago due to low demand. founder of property website Shweproperty.com.in
As foreigners are still unable to own land in sufficient numbers to move the market.
Myanmar, there has been no pick up in the
industry from foreign buying, said Daw Yin Yin Source: Myanmar Times
Myat, central committee member of the Myanmar https://www.mmtimes.com/news/property-
Urban and Infrastructure Development market-myanmar-expected-stay-flat-till-
Association. 2020.html
PwC | May 2019 6Newspapers
Eleven Myanmar
ADB chief pledges more investments in private sector
07 May 2019
WITH BROADER insight into new markets, the countries also supported the greater use of credit
Asian Development Bank (ADB) plans to pour a enhancement instruments.
larger amount into private sector operations in Last year, the bank’s new lending, equity
the next five years, ADB chief Takehiko Nakao investments, and guarantees to private companies
said. amounted to US$3.1 billion (Bt99 billion), a 37-
In his closing address at the 52nd annual meeting per-cent increase from 2017. On top of that, ADB
on Saturday, Nakao said the private sector secured commercial co-financing of $7.2 billion.
operations would account for one-third of ADB’s “We will continue to expand our private sector
total projects by number by 2024. operations. We will also target a substantial
“We discussed the importance of expanding to increase in commercial cofinancing,” he said.
frontier economies and social sectors such as He aimed to achieve the target of every $1
health and education,” he said. financing from ADB for private sector operations
He stressed the need to more closely look at risk being matched by $2.5 of long-term cofinancing.
and pricing, as well as the real impact on The governors encouraged the lender to help
development. make projects bankable.
“We are expanding staff resources for private “We will make greater use of risk management
sector operations and risk management, and will products to help projects become bankable,” he
increase outposting to resident missions,” he said. said.
Nakao said an office would be opened in
Singapore by the end of this year to facilitate
engagement with private sponsors and financiers. Source: Eleven Myanmar
According to Nakao, there was a discussion on the https://www.mmbiztoday.com/articles/bonded-
value of equity investment in addition to loan warehouse-program-provide-boost-myanmar-
operations, and governors from ADB member industries
PwC | May 2019 7Newspapers
Myanmar Times
Myanmar Tourism Bank starts operating first branch
07 May 2019
The first branch of Myanmar Tourism Bank collateral.
(MTB), located in Yangon, has started operation For those who are able to provide collateral, the
on Monday offering financial assistance to lending is a maximum of 13pc.
tourism companies. The Myanmar Tourism Bank will decide on the
MTB is one of five sector-specific banks granted a loans to extend depending on the nature of the
banking license by the Central Bank of Myanmar business of the borrowers, said MTB’s managing
(CBM) in 2017. It is founded by a public tourism director.
company. Initiated during U Thein Sein’s The branches at Mandalay and Nay Pyi Taw and
government, K2 billion was raised to finance the other places will be open in next month, U Yan
MTB to help promote the tourism sector, but it Win, a shareholder of the bank, told The
failed to get the necessary approvals from Myanmar Times.
relevant authorities. In addition to giving out loans to tourism
“As a tourism-related bank, we will focus on companies, personal travel loans will also be
lending to this sector. But we also plan to offer issued to those who want to travel, as a way to
financial support to other related sectors and support the development of the tourism sector.
businesses. We will support the inbound and According to the Ministry of Hotel and Tourism’s
outbound tour businesses,” U Saw Bo Bo, statistics, there are more than 2500 travel and
managing director of Myanmar Tourism Bank tour companies by the end of November, but the
told The Myanmar Times. majorities are small and medium-sized
The bank aims to offer low interest loans to assist enterprises (SMEs)
the tourism sector.
The CBM has also relaxed its restrictions on Source: Myanmar Times
collateral this February. As such, loans at rates of https://www.mmtimes.com/news/myanmar-
16 percent are available for borrowers without tourism-bank-starts-operating-first-branch.html
PwC | May 2019 8Newspapers
Myanmar Times
Housing project for fire victims set to be finished end
of this year
08 May 2019
The Thu Khi Tar low-cost housing project The project is being built on 0.6 acres of land and
intended for families, whose homes were the construction cost amounts to K1.5 billion
destroyed by a fire two years ago in Mayangone (almost US$ 100,000).
Township will be finished in the end of this year, The development consists of seven buildings,
said an official of the company undertaking the three of which are now finished and the units will
development. be given to the people in May. Three other
Ma Aye Moe Thu, project engineer from Sun Myat buildings will be completed at the end of July and
Tun Construction Company, said the housing people can move in around August, she said.
project itself will be finished by October. The foundation of seventh and largest building
“Then, we will continue working on paving the located beside the main road were laid at the start
streets and getting electricity into the units. We of this month and arrangements are being made
intend to finish it before this year end,” she said. to finish it at the end of October.
The project is being built along Zeya Khay Mar “The building beside the main road and the one
Street (5) in Ward 6 and will eventually behind it are built as affordable housing and the
accommodate 38 households whose homes were rest are the low-cost,” she said.
destroyed by fire in February 2017, according to The floor area of the units range from 300 square
the Yangon City Development Committee. feet to 629 square feet and the company will sell
Seven affordable and low-cost building with a the units from K20 million to K60 million
total of 90 apartments are included in the project, depending on the floor level.
construction on which started in August 2018.
Among the apartments, 38 units will be given to Source: Myanmar Times
the victims of the fire while the YCDC will receive https://www.mmtimes.com/news/housing-
five units. The construction company has the right project-fire-victims-set-be-finished-end-
to sell the rest of the units, said Ma Aye Moe Thu. year.html
PwC | May 2019 9Newspapers
Myanmar Times
Rental transactions rise in Yangon, even as larger
market stays muted
08 May 2019
The market for rental property, which is the apartments that cost K200,000 or less a month to
lifeblood of the real estate sector in Yangon, rent, according to the Tun Tauk Real Estate
rebounded during first quarter of this year, with Agency. Among the townships in Yangon’s
more units getting rented out rather than sold. downtown area, Sanchaung, Kyeemyindaing and
However, the overall environment of the property Bahan have the highest rents. Meanwhile, in the
market remains muted, industry analysts and rental market for foreigners, condominiums with
leaders said. rents from K700,000 to K1 million a month are
Late in April, the rental of apartments in the seeing the most demand.
country’s main city increased, especially those Although transactions tend to slow down during
being rented for K500,000 (US$328) per month, the three months of the Buddhist lent period as
according to U Nay Min Thu, managing director most Myanmar people traditionally avoid moving
of property website iMyanmarHouse.com. house and trading during the period, the rental
He, however, noted that demand for apartments market for foreigners is largely unaffected, said U
and condominiums that cost more than Aung Kyaw Zin of Master Real Estate Co.
K500,000 a month to rent has remained flat. As the Buddhist lent nears, property owners are
U Nay Min Thu said the number of people who only renting out their units under six-month or
want to rent apartments at less than K500,000 a one-year contracts, avoiding three-month
month has risen so the rents have risen on the contract. They are doing so because they want to
back of the demand. avoid the difficulties of receiving new tenants
“As developers build more medium-cost during the Buddhist lent, said U Nay Min Thu.
apartments in recent years and the population has Source: Myanmar Times
increased, the rental rates have increased,” said U https://www.mmtimes.com/news/rental-
Nay Min Thu. transactions-rise-yangon-even-larger-market-
In the current market, demand is highest for stays-muted.html
PwC | May 2019 10Newspapers
The Irrawaddy
A Renewable Vision for Myanmar
08 May 2019
Myanmar continues to experience a rapid time for the government to act quickly and
increase in economic activity as it transitions into decisively.
an open market system. With that, power demand One solution that can have an immediate impact
continues to increase—for modern amenities like is solar power. It perfectly complements
air conditioning and power for industrial hydropower and gas generation. The very
factories. This is especially true in the economic conditions that drive the demand and cause water
hubs of Yangon and Mandalay. shortages are the conditions that provide the best
In the last few weeks it has come to light that environment for solar generation.
there is now an insufficient power supply. As Other advantages of solar power are that it is a
temperatures soar past 40 degrees Celsius, green and renewable resource, requires no water
depleted water supplies from the country’s major or fuel and emits no pollutants. It can also be built
hydropower dams have resulted in insufficient very quickly using local labor, providing much
power generation and rotating blackouts across needed employment opportunities. Foreign
the country. investors tend to be keen on solar investments,
Myanmar is running out of options for additional further complementing the need for foreign direct
power generation. Liquefied natural gas (LNG) investment (FDI) in Myanmar.
solutions are too expensive and the government Timing is also such that no additional support or
has so far failed to complete a power purchase incentive programs are required from the
agreement. Coal power is opposed by the general government to compete with other fossil or
public, and rightfully so. Hydropower dams take hydropower generation.
too long to complete and have too grave an impact
on the surrounding population and environment. Source: The Irrawaddy
The country cannot afford to wait for five or 10 https://www.irrawaddy.com/opinion/guest-
more years to remedy this power shortage. It is column/a-renewable-vision-for-myanmar.html
PwC | May 2019 11Newspapers
Myanmar Times
Myanmar’s economy towards GE2020 and beyond
09 May 2019
The Myanmar Times is assembling leading figures Ooredoo Myanmar
in trade, investment, banking and policy for a We will also hear from Ma Cherry Trivedi, Interim
major conference in Yangon on May 13. CEO of the Myanmar Institute of Directors, on the
Join us at The Myanmar Times’ economic forum, importance of good corporate governance in
where we will bring together leading industry boosting investor confidence. Sean Turnell,
experts, policy-makers and corporate executives Special Economic Consultant to State Counsellor
to analyse the business and investment prospects Daw Aung San Suu Kyi, will present the latest
in Myanmar and what lies ahead. With the 2020 macroeconomic data and provide some insight on
General Election on the horizon, it is time to look the Myanmar economy.
at where the country is heading towards. Registration and rules
Five business leaders on a panel will discuss their The event will be held under Chatham House
views on the economy and how they'll be Rule. Representatives from media companies are
expanding and positioning their businesses to encouraged to attend and are free to use the
benefit from the opportunities or ward off the information received, but neither the identity nor
challenges in the next few years. the affiliation of the speakers, nor that of any
The panel speakers are: other participant, may be revealed.
Serge Pun, Executive Chairman, Yoma Strategic This event is brought to you by Myanmar
and First Myanmar Investment Co Consolidated Media (MCM) and is supported by
Than Lwin, Senior Consultant, KBZ Bank M Tower, Eneos, Marga Group, Bata and Tun
Aung Htun, Deputy Chairman, Myanmar Commercial Bank.
Investment Holdings
Peter Beynon, Country Chairman, Myanmar and Source: Myanmar Times
Cambodia, Jardine Matheson https://www.mmtimes.com/news/myanmars-
Alok Verma, Acting Chief Executive Officer, economy-towards-ge2020-and-beyond.html
PwC | May 2019 12Newspapers
Myanmar Times
Contract farming to help farmers deal with
challenges
10 May 2019
Contract farming could help solve the various come up with a framework on contract agriculture
problems faced by small-scale farmers, including that will cover nine crops: rice, corn, sugarcane,
lack of capital and technological know-how, said groundnuts, sesame, sunflower, mung bean,
U Hla Kyaw, deputy minister of Agriculture, gram, fermented soybean.
Livestock and Irrigation. The contract agriculture framework will also
Aside from lack of capital and technological include dairy production, he added. The
know-how, small scale farmers also has to framework will cover contract terms, pricing,
struggle with crop quality and marketing quality standards, and arbitration procedures,
difficulties for their produce, among others, among others.
according to agriculture experts and industry “Contract Farming Contracts must be enforceable
executives during a workshop at Nay Pyi Taw on so that the investors will be secured and the
Thursday. farmers don’t suffer losses,” U Ye Min Aung said.
“To get over these challenges, we need to have It was noted that one of the reasons why foreign
better cooperation among businesses, the farmers investors are reluctant to put their money in the
and various government organisations,” U Hla agriculture sector is because of the lack of a
Kyaw said. “We also need to start practicing framework related to contract farming as foreign
contract farming.” companies want protection for their investments.
The deputy minister urged relevant government
agencies and agriculture experts to come up with
guidelines to regulate contract farming and make
it more effective in improving the livelihoods of
the local farmers. Source: Myanmar Times
U Ye Min Aung, general manager of Myanmar https://www.mmtimes.com/news/contract-
Rice Federation, said there is already a plan to farming-help-farmers-deal-challenges.html
PwC | May 2019 13Newspapers
Myanmar Times
Avoid debt trap when engaging Belt and Road:
analysts
10 May 2019
At the second Belt and Road forum held in Beijing “The government should not agree to implement
in April, State Counsellor Daw Aung San Suu Kyi projects by taking loans as it may not be able to
acknowledged that infrastructure development recover its investment on the infrastructure
under China’s Belt and Road Initiative (BRI) is project. Such developments involve heavy capital
important to facilitate trade, create jobs and expenditure and cost a lot to upkeep. As such,
enhance connectivity. raising funds through debt may not be in the
However, local analysts say Myanmar should country’s best interests. It would be better to go
avoid accepting loans from China, which typically for BOT arrangements,” said U Zaw Pe Win, a
come with high interest rates. “Instead of local analyst.
agreeing to every project that China wants to For development that is sustainable and
carry out, we should consider which projects most beneficial for both countries under the BRI
benefit the Chinese and negotiate for better terms project, long-term financial plans and a good
of implementation,” said U Ye Tun, a former system to ward of regional financial dangers are
Pyithu Hluttaw MP. important, the State Counsellor said.
For infrastructure development, local projects “BRI projects need to be in accordance with the
with long term benefits such as better priorities and development projects of the
international connectivity should be prioritised, participating countries. The project feasibility
while the terms and conditions of use should be should consider not only economical but also
well-negotiated, said Dr Zaw Oo, economic social and environmental responsibility.
adviser to the former president of Myanmar.
Analysts agreed that the government should push
for more build, operate and transfer (BOT) Source: Myanmar Times
arrangements when implementing infrastructure https://www.mmtimes.com/news/avoid-debt-
projects. trap-when-engaging-belt-and-road-analysts.html
PwC | May 2019 14Newspapers
Myanmar Times
Deadline for Yangon sky train land compensation
announced
10 May 2019
Land for the Yangon Urban Mass Rapid Transit the land that has to be acquired for the project,” U
(YUMRT) route will have to be acquired and the Yan Shin said. The cost of the Yangon Sky Trainp
Yangon regional government has set the deadline Project will be covered by overseas development
for claims of resettlement and other assistance from the Japanese government,
compensation as May 6, the Yangon City Japanese Ambassador to Myanmar Ichiro
Development Committee (YCDC) announced Maruyama told The Myanmar Times. The first
earlier this week. phase of the project of about 18 kilometres from
Any modifications, extensions and new Hlaing Thar Yar Station to Parami Station across
construction done on land demarcated for the Hlaing River will require a 29m wide stretch
acquisition after the deadline, will not be entitled of land along Yangon-Pathein Road, 22m wide
to land compensation, resettlement and along Parami Road. The Hlaing Thar Yar Station
compassionate grants, the YCDC stated. will be built on a 21.8 hectare site and will require
“Work on the project is being planned in such a the acquisition of 11m of land on both sides of the
way as to minimise the impact to the areas along centre line of the track along the Yangon-Pathien
Parami road. Only a partial area of land will be road and Parami Road. In accordance with norms
affected by the project. Land in plots or block for international financial organisations, a survey
won’t be acquired. In Bangkok and Singapore, will be conducted in the project area by Japan
the tracks for mass-transit routes are nearly in International Cooperation Agency from now until
contact with neaby buildings,» said Mayangone June 30 to draw up environmental and social
MP U Yan Shin. impact assessments for the project.
“The width required for the sky train route is Source: Myanmar Times
between 20 to 21 metres so it will not require the https://www.mmtimes.com/news/deadline-
acquisition of entire plots of land. Compensation yangon-sky-train-land-compensation-
or compassionate grants will also be given for the announced.html
PwC | May 2019 152. Weekly Key Policy News PwC | May 2019 16
Weekly Key Policy News
Headlines
Pwint Thit Sa 2019: Five things you need to know
Authorities aim to strengthen investment facilitation in related ministries
Letter: Corporate governance goes beyond disclosure
Belt and Road forum marks subtle shift in China-Myanmar ties
Myanmar produces first corporate governance scorecard
PwC | May 2019 17Newspapers
Myanmar Times
Pwint Thit Sa 2019: Five things you need to know
06 May 2019
The fifth Pwint Thit Sa (Transparency in Many large companies have established a
Myanmar Enterprises) report has been released “foundation” which make donations. However the
by the Myanmar Centre for Responsible Business legal, tax and charitable status of such entities are
(MCRB) and Yangon-based consulting firm Yever. unclear, as is their governance. Part of the
City Mart tops the league table, followed by First problem is that Myanmar does not have laws
Myanmar Investment (FMI), Max Myanmar, regulating political donations. “Foundations can
Shwe Taung and United Amara Bank (UAB). The be used in a way which contravenes good
report reveals that public companies in Myanmar corporate governance, for example through
- whose shares can be bought by the public - lag donating to activities connected to Politically
behind privately-owned businesses in disclosure Exposed Persons, or to gain favour with the
and corporate governance. government,” the report said. This was a
What else do you need to know about this year’s widespread practice under the old regime, in
report? Here are our five key takeaways. return for car import permits, construction
1. Information disclosure has improved overall. contract, land deals and other benefits. The use of
Some leading companies are rising to the donations by tycoons is particularly prominent in
challenge in disclosing corporate governance Rakhine State. The Union Enterprise for
information and reporting performance. Humanitarian Assistance, Resettlement and
City Mart, FMI, Max Myanmar and Shwe Taung Development in Rakhine (UEHRD), established
have all tried harder to enhance disclosure, by the civilian government, is tasked with
particularly in corporate governance and non- development work with the support of local
financial reporting. Leading companies are strong tycoons.
in shaping their corporate profile but weaker in Source: Myanmar Times
corporate governance and reporting. https://www.mmtimes.com/news/pwint-thit-sa-
2. Donations remain a grey area. 2019-five-things-you-need-know.html
PwC | May 2019 18Newspapers
Myanmar Times
Authorities aim to strengthen investment facilitation
in related ministries
07 May 2019
The Ministry of Investment and Foreign with the UK-funded DaNa Facility.
Economic Relations has pledged to strengthen The event attracted over 50 officials from 16
investment facilitation in related ministries. government agencies, providing the officials with
Speaking at a training workshop in Nay Pyi Taw, an understanding of the requirements of foreign
U Aung Naing Oo, the ministry’s permanent investors, the often negative impacts of
secretary, stressed the importance of investment bureaucratic rules and regulations on investors,
facilitation and the role of all investment-facing and ways to support DICA in responding to them.
government agencies in the process. Other similar workshops will be held in Yangon
“Investment promotion and facilitation are two and Mandalay later this month.
sides of the same coin. In particular, without Participants also reviewed recent developments in
facilitation, there will be no effective investment responsible and inclusive business, in financial
promotion,” he said. inclusion, in states and regions business
“The Myanmar Sustainable Development Plan environments, and in Private Sector Development
highlights the importance of investment in (PSD). These developments will strengthen the
enhancing socio-economic development, reducing enabling business environment and empower the
poverty and creating employment. Facilitation, private sector to create jobs and improve the
involving coordination, harmonisation and incomes of men and women in Myanmar,
synchronisation, is critical to achieve our especially the poorest people in the remoter areas
investment attraction plans and targets.” of the country.
The one-day workshop, which focuses on
investment promotion and facilitation, was Source: Myanmar Times
organised by the Myanmar Investment https://www.mmtimes.com/news/authorities-
Commission and Directorate of Investment and aim-strengthen-investment-facilitation-related-
Company Administration (DICA) in collaboration ministries.html
PwC | May 2019 19Newspapers
Myanmar Times
Letter: Corporate governance goes beyond disclosure
07 May 2019
SIR - Your coverage on corporate governance and transparency and needs effective governance. The
transparency in Myanmar over the past few days - Pwint Thit Sa report includes recommendations
“Myanmar public companies trail behind private which Myanmar companies, government, the
firms in corporate disclosure” and "Pwint Thit Sa Anti-Corruption Commission, lawmakers and
2019: Five things you need to know" - shines light institutional investors should all take note.
on areas in the economy which are often Particularly relevant to large companies and
overlooked. public companies is that good governance
The report by the Myanmar Centre for requires a professional Board of Directors, fully
Responsible Business and Yever rightly refers to empowered by the shareholders, as well as an
the ASEAN Corporate Governance Scorecard. The equally professional audit committee and
region offers good lessons for policymakers in independent directors. To put it simple, a “check
Myanmar to take note. and balances” system within a business
For example, the Thai government has digitalised organisation is necessary.
company information of every Thai legal entity The regulations currently required for companies
recently, which covers shareholding structure, to be listed on the Yangon Stock Exchange merit
income statements and financial ratios. This is changes. The authorities should consider easing
very useful for both practitioners and prospective regulations for smaller companies while providing
business partners and investors to undertake due more support for businesses to reform and
diligence. The same tools have been available in prepare for listing.
European jurisdictions for some years already,
and are proven to enhance the transparency of Source: Myanmar Times
business operations. https://www.mmtimes.com/news/letter-
While the report focuses more on information corporate-governance-goes-beyond-
disclosure, corporate reform goes beyond disclosure.html
PwC | May 2019 20Newspapers
Frontier Myanmar
Belt and Road forum marks subtle shift in China-
Myanmar ties
08 May 2019
China acknowledged criticism of its Belt and Road addressed an open letter to Chinese President Xi
Initiative at last month’s forum in Beijing, at Jinping saying that a dam on the Ayeyarwady
which the Myitsone dam was off the agenda (at River was unacceptable to the people of
least publicly) at talks with Myanmar. Myanmar.
WHEN THE Chinese embassy in Yangon posted a This civil society event was held just four days
Xinhua article about State Counsellor Daw Aung before Aung San Suu Kyi left for the Belt and
San Suu Kyi’s meeting with Chinese Premier Mr Road Forum in Beijing, from April 25-27. The
Li Keqiang to Facebook on April 26, the solitary forum brought together dozens of world leaders
comment below the post was, “How about to discuss Xi’s signature – and controversial –
Myitsone dam?” foreign policy, the Belt and Road Initiative.
It summed up the singular lens through which But when Aung San Suu Kyi returned from
many in Myanmar have come to view bilateral Beijing, the tone had clearly shifted. Media
relations over the past six months, and the coverage trumpeted the 1 billion yuan ($148
growing concern that the Myanmar government, million) grant that China had promised for
under pressure from China, might agree to economic and technical assistance. A Ministry of
proceed with the US$3.6 billion megadam in Foreign Affairs statement released on April 29
Kachin State, which was suspended in September said this would be for “livelihood improvement,
2011. feasibility study for major projects and
These concerns reached a crescendo on April 20 humanitarian assistance for the IDPs in northern
when hundreds of civil society leaders gathered at part of Myanmar”.
Yangon’s Novotel Hotel and announced a “one
dollar campaign” aimed at collecting $1 from Source: Frontier Myanmar
every citizen to raise funds to compensate China https://frontiermyanmar.net/en/belt-and-road-
for scrapping the Myitsone Dam. They also forum-marks-subtle-shift-in-china-myanmar-ties
PwC | May 2019 21Newspapers
Myanmar Times
Myanmar produces first corporate governance
scorecard
10 May 2019
Myanmar companies need to improve their stakeholders, improving companies’ disclosure,
business practices to become more competitive in transparency, governance structures, and board
local and regional markets, a new report shows. composition along with board accountability for
The Myanmar Corporate Governance Scorecard company decisions.
2018 is the first report of its kind in the country “Good corporate governance is a critical
and assesses the performance of 24 companies in component for the sustainable development of
the country. It is published by the International any organisation,” said U Maung Maung Win,
Finance Corporation (IFC), the Securities and chair of Securities and Exchange Commission of
Exchange Commission of Myanmar, the Yangon Myanmar. “It is important for Myanmar
Stock Exchange and the Directorate of Company companies to improve their corporate governance
Investment and Company Administration (DICA). practices whether they are seeking to expand their
The report, which assesses companies on the business, foster stronger ties with international
basis of the Association of Southeast Asian partners, or develop a smooth succession plan.”
Nations (ASEAN) Corporate Governance The scorecard identifies the areas which should
Scorecard, reveals that Myanmar firms scored an be prioritised not only by the companies but also
average of 30 percent, compared to the ASEAN by Myanmar regulating bodies, commented
average of 69pc. Some Myanmar players are Nicolas Delange, managing partner of Myanmar-
observed to be performing significantly above the based consultancy firm Yever.
average and listed companies are outperforming
public and private ones.
While noting the assessment was undertaken Source: Myanmar Times
before the new Companies Law came into effect, it https://www.mmtimes.com/news/myanmar-
recommends companies should focus on key produces-first-corporate-governance-
areas including rights of shareholders and scorecard.html
PwC | May 2019 223. Weekly Investment News PwC | May 2019 23
Weekly Key Investment News
Headlines
New Yangon port to be constructed as trade volumes rise
Bonded Warehouse Program to Provide Boost to Myanmar Industries
Myanmar’s logistics startup Kargo raises $800K in pre-Series A round
Ring road construction to start in 2020: commerce ministry
Yangon Business Forum Spurs New Investment
PwC | May 2019 24Newspapers
Myanmar Times
New Yangon port to be constructed as trade volumes
rise
05 May 2019
Adani Yangon International Terminal is 150,000 twenty-foot equivalent units (TEU), or
developing a container terminal in Ahlone twenty-foot containers, when it is completed
township, which is by the Yangon River, in within the targeted 12 months.
anticipation of higher trade volumes in the Phase 2, which will take an additional six months
coming years. to construct, is expected to take the port’s total
The company, which is registered in Myanmar capacity to a maximum of 800,000 TEUs.
and incorporated in Singapore, received approval The Yangon River has a draft of nine metres,
from the Myanmar Investment Commission on allowing for vessels of 167 metre in length and
April 26 to develop, operate and maintain the 15,000 tonnes in weight. This includes containers
Ahlone International Port Terminal (2) (AIPT) ships of between 1100 TEUs and 1500 TEUs.
under a 50-year Build, Operate and Transfer When complete, the new terminal will be able to
agreement with the government, according to the handle container ships of this size, said Sunil
Directorate of Investment and Company Seth, CEO of Adani Myanmar.
Administration (DICA). “Our focus will be on bringing modern
AIPT (2) will be developed across 50 acres of land technologies that will raise productivity and
owned by Myanmar Economic Corporation, which shorten the turnaround time of vessels that call at
is currently operating AIPT (1), according to our port. We will set new benchmarks to
DICA. The company will enjoy income tax throughput time and serve all the major shipping
incentives for the first three years of operations, lines that service Yangon,” he said.
said Daw Mya Sandar, director of DICA.
Construction of the US$290 million port, which
will be built from scratch, is expected to begin in Source: Myanmar Times
September. Phase 1 of development will involve https://www.mmtimes.com/news/new-yangon-
enough capacity to handle between 100,000 and port-be-constructed-trade-volumes-rise.html
PwC | May 2019 25Newspapers
Myanmar Business
Today Bonded Warehouse Program to Provide Boost to
Myanmar Industries
07 May 2019
The Customs Department, Ministry of Planning income for the country. The significant cases are
and Finance, and the DaNa Facility, a UK aid found in the garment exporting countries, where
funded program, have launched the Developing shorter lead-time is a competitive factor.
Custom Bonded Warehouse programme. The “The Customs warehousing business has
program is to introduce Customs officers and improved accompanied with increased job
relevant stakeholders to the potential of a bonded opportunities. Especially, opportunities for CMP
warehouse system in supporting local industry, manufacturing could increase in areas such as
and to highlight the key components of a bonded delivering goods to customers in real time, saving
warehouse programme in Myanmar. costs of transportation and manufacturing,
Bonded warehouses are specifically designed to allowing higher competitive capacities to enter
support industry, particularly those which import international markets. Furthermore, oversea
high value and/or high import duty goods. owners may specify our country as a buffer place,
Through bonded warehouses, these industry increasing not only jobs at Bonded Warehouses
sectors will have the ability to defer their import but also collections of duties and taxes.
duties and taxes until they themselves find Additionally, trade with neighbouring countries
customers willing to buy the goods or identify would be more developed if customs and bonded
export markets, meaning that they can improve warehouses are situated at border points.” Said U
productivity and better manage their cash flows. Aung San Tun, Deputy Director General of the
This system allows for exported finished goods to Customs Department.
be more competitively priced in regional and
global markets as this export pricing does not Source: Myanmar Business Today
include embedded duty and tax charges. This https://www.mmbiztoday.com/articles/bonded-
system also enables export through such an warehouse-program-provide-boost-myanmar-
enhanced competitive process brings in important industries
PwC | May 2019 26Newspapers
Deal Street Asia
Myanmar’s logistics startup Kargo raises $800K in
pre-Series A round
07 May 2019
Myanmar-based logistics startup Kargo on Founded in 2016, Kargo was the winner of
Tuesday announced that it has raised $800,000 Seedstars Yangon 2017 and was backed by Seed
in a pre-Series A financing round led by Myanmar that targets early-stage technology
Singapore-based venture capital fund Cocoon companies. The following year, it raised a six-digit
Capital. The latest round was joined by two dollar grant from the GSMA Ecosystem
unnamed angel investors. Kargo is a B2B logistics Accelerator Innovation Fund. Prior to raising the
platform that provides both short- and long-haul latest financing, Kargo had bagged $130,000
trucking delivery services by connecting truck through Yoma Bank’s unsecured SME financing
owners and businesses or individuals through a scheme. Last year, Cocoon Capital launched its a
mobile application. It plans to use the fresh $20-million second fund that targets seed-stage
capital to further develop its platform and expand tech startups in Southeast Asia.
outside Myanmar in the next 12 months. “The
Myanmar freight market is expected to grow by
300% in the coming years. With such a
fragmented logistics market our platform
simplifies trucking through one simple dashboard
that manages shipments both across Myanmar to
other markets in the region,” said Kargo founder
and CEO Alexander Wicks. As part of the
financing, Cocoon Capital managing partner
Michael Blakey joins Kargo’s board of directors.
“Myanmar is the fastest growing economy in Source: Deal Street Asia
Southeast Asia and logistics is a key industry to https://www.dealstreetasia.com/stories/kargo-
support this growth,” he said in a press statement. cocoon-capital-133588/
PwC | May 2019 27Newspapers
Myanmar Times
Ring road construction to start in 2020: commerce
ministry
09 May 2019
Phase one of the proposed Yangon elevated Last Thursday, MOC held a pre-bid conference for
highway will begin construction in July 2020, investors and announced that they need to submit
according to the Ministry of Construction (MOC). proposals of the project this June for bidding
The project is expected to be completed within purposes.
three years. The winning consortium will be announced in
The ministry together with the Yangon regional July or August.
government adopted the public-private The construction ministry started inviting both
partnership model for the Yangon Elevated local and foreign businesses to submit Expression
Expressway (YEX) project. The proposal is a of Interest (EOI) last May.
priority under the incumbent administration, In December 2018, MOC had selected ten local
which seeks to alleviate the severe traffic and foreign consortiums as prequalified bidders
congestion in the commercial capital and improve for the phase one of YEX.
connectivity for businesses and communities. The 10 companies shortlisted as prequalified
The highway project includes a four-lane elevated bidders include VINCI Highways from France and
road of 47.5km which will link the south of China Communications Construction Company as
Yangon, which includes Yangon Port and Thilawa well consortiums comprising firms and joint
Special Economic Zone, to the north side of the ventures from Myanmar, Thailand, Japan and
city, where the Yangon International Airport, China. Notably, four Chinese companies have
Mingaladon Industrial Park and the Yangon- been included in the shortlist.
Mandalay Expressway are located.
For phase one of YEX, a 27.5 km four lane ring
road will involve connecting east and west of Source: Myanmar Times
Yangon, as well as the Yangon International https://www.mmtimes.com/news/ring-road-
Airport. construction-start-2020-commerce-ministry.html
PwC | May 2019 28Newspapers
The Irrawaddy
Yangon Business Forum Spurs New Investment
10 May 2019
YANGON—Seeking to spur new investment, the will only grow in the coming years,” he added.
Myanmar government touted Yangon’s strategic The forum’s tagline, “Yangon Region is an ideal
location, infrastructure development and hub for doing business in Asia,” aims to attract
emerging workforce on Friday, when it showcased both foreign and local investors, focusing
more than 80 projects to local and international particularly on infrastructure projects, industrial
investors. parks, new city development and city expansion,
“Yangon today is a premier investment location,” and housing. Value-added agriculture and
said Union Minister for Myanmar Investment and tourism development are also at the top of the
Foreign Economic Relations U Thaung Tun, list. The forum, itself part of a government effort
during his opening speech at the Yangon to revive significantly declining foreign
Investment Forum 2019, held at Yangon’s Lotte investment, saw about 1,200 foreign and local
Hotel. delegates in attendance, according to Yangon
Despite being the smallest among the 14 states Region Chief Minister U Phyo Min Thein.
and regions of Myanmar, Yangon Region receives Under the “Look East” policy, government
more than 50 percent of all foreign investments officials have been touring Asia, beating the drum
and represents almost a quarter of Myanmar’s for the country’s economy, but, under the
total GDP. The city is also home to every major National League for Democracy government,
Myanmar bank and financial institution. foreign investment has been in decline for more
Yangon, a major trade and logistics hub—with than two years.
airports, rail, and seaports—accounts for 85
percent of the country’s exports, U Thaung Tun Source: The Irrawaddy
said. https://www.irrawaddy.com/business/business-
“With the construction of new airports such as the forum-sparks-new-investment-in-yangon-
Hanthawaddy Airport, we expect that this percent region.html
PwC | May 2019 293. Weekly New Tenders PwC | May 2019 30
Tenders (Myanmar)
List
No applicable Tenders announced for the week ending 10 May 2019
Note: tenders information are collected from http://www.mmtimes.com/, https://tender.yangon.gove.mm, http://consult-myanmar.com/, and
http://www.myanmar-opportunities.org/mm/tenders http://www.buildersguide.com.mm/en/ .
PwC | May 2019 31Tenders (Multilateral organizations)
List
ADB: GRANT-0516 REG: Greater Mekong Subregion Health Security Project - ICS13 Health
Researcher (48118-002), Closing Date: 16 May 2019 (Individual)
Note: tenders information are collected from https://wbgeconsult2.worldbank.org, www.devex.com, www.adb.org, https://www.ungm.org
PwC | May 2019 324. MIC Permitted Projects PwC | May 2019 33
MIC Permitted Projects (Meeting 6, 2019)
No. Name of Company Type of Investment Form of Investment
Development, operation and maintenance
of Ahlon International Port Terminal (2)
1 Adani Yangon International Terminal Co., Ltd Wholly Foreign Owned
and Container Yard on Build, Operate and
Transfer Basis
Source: DICA
PwC | May 2019 345. Upcoming Events PwC | May 2019 35
Upcoming Events (May 2019)
List
Date Location Name of Event Sector Price Focus Points
“Mandalay International Livestock and
Agriculture Show (MILAS) successfully held
for the past 2 years since 2016. The 1st
Mandalay International edition in 2016 showcased over 48 brands
28-30 May Livestock and
Mandalay Livestock and Free and companies from 14 countries with total
2019 Agriculture
Agriculture Show 60 booths. We had 1300 + local and foreign
visitors in 2016. The 2nd edition in 2017
showcased over 60 brands and companies
from 15 countries with total 87 booths.”
Note: Events information are collected from https://www.go-myanmar.com/events-and-conferences and https://10times.com/myanmar .
PwC | May 2019 36www.pwc.com/mm
PwC Myanmar Weekly Business Intelligence Publication
For further information please contact:
Jovi Seet
Senior Executive Director
jovi.seet@sg.pwc.com
Brandon Lye
Director
brandon.ys.lye@sg.pwc.com
© 2019 PricewaterhouseCoopers Myanmar Co Ltd. All rights reserved. In this
document, “PwC” refers to PricewaterhouseCoopers Myanmar Co Ltd, which is part
of the network of member firms of PricewaterhouseCoopers International Limited,
each of which is a separate and independent legal entity.
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