Tight restrictions will be imposed to prevent foreign investors from controlling the stock bourse before the Yangon Stock Exchange (YSX) opens in October, said chairperson of the Securities and Exchange Commission of Myanmar (SECM).
Presently, the SECM won’t give permission to foreign funds and institutional investors to invest instantly in the YSX.
“We will use Company Act to control foreign investment. If we allow foreign investors to invest freely on the stock market, they will pour a lot of capitals into the bourse and take control of the small market and damage the macro economy," said Dr Maung Maung Thein, the SECM chairperson.
The YSX is expected to open this October and has attracted foreign investors already.
"We are concerned that local investors will lose their place in YSX when foreign investors come. For this reason, we will allow foreign investors to invest in YSX in the second phase. The third phase will include the forming of state-owned corporation. We have also considered dual listing," said the chairperson."
Through dual listing, a company listed on YSX can sell their shares in a stock market in another country that is linked with YSX.
Neighbouring countries such as Laos and Cambodia still have the slowly-developing money markets, therefore, people have set their eyes on the merits of YSX.
"The growth of stock exchange depends on the country’s economic development," said Dr Maung Maung Thein.
Experts anticipate Myanmar has a great potential for economic development as there are abundance of natural resources and 30 million working population out of the total of 52 million people while the country is strategically located among China, India and Asean countries.