Myanmar looks at stock market to attract capital

Monday, 24 January 2011 00:48 - - {{hitsCtrl.values.hits}}

BANGKOK (Reuters): Myanmar is in talks with South Korea’s bourse operator about opening a stock market, the latest in a series of steps by its military rulers aimed at drawing much-needed foreign capital to the country.

Korea Exchange is already involved in running the newly opened Laos Securities Exchange and is setting up a long-delayed stock market in Cambodia, which is due to open in July. Both are joint ventures with the respective governments.

“We had a discussion (with Myanmar) before,” Lee In-pyo, Project Director for the Cambodian exchange, told Reuters on Thursday. “Anything is possible, anything can happen,” he said, when asked if the company was keen to work in Myanmar.

A spokesman for Korea Exchange in Seoul said representatives had visited Myanmar twice. “But nothing has been decided,” the official said.

Myanmar is rich in natural resources but its development has been held back by five decades of economic mismanagement under military dictators and by Western sanctions.

But reforms are under way. The authorities have privatised hundreds of state assets in the past year and are seeking to expand the banking, telecommunications, shipping and agricultural sectors.

The country is on a drive to attract investment from its neighbours, promoting tourism, timber, gemstones and its vast oil and gas reserves, which are already being tapped by China and Thailand, its biggest investors.

Analysts warn that doing business in Myanmar is fraught with problems because of graft, cronyism and an unclear regulatory framework.

The privatisation process to date has been highly opaque, with most assets transferred to businessmen with close ties to the junta.

Myanmar held its first elections in two decades in November, and many countries in Asia now consider it a democracy. Western countries are not convinced much will change and expect the junta to pull the strings from behind the scenes.

Parliament, which will be dominated by serving or retired soldiers, will convene for the first time on 31 January and a president tasked with appointing a civilian government will be chosen in the weeks after.