Weekly Business News from Myanmar

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  Government plans to allow foreign insurance providers to operate domestically to compete in the domestic market as insurance industry is progressing at a slow pace

  It has been five years since the government first allowed private insurance businesses to offer their services in Myanmar in 2013. But further liberalisation is needed and the authorities have been saying they are close to allowing foreign insurance providers to operate domestically. In August, U Zaw Naing, secretary of the Insurance Business Regulatory Board (IBRB), which was established by the Ministry of Planning and Finance in 2016, said the board will allow foreign insurance companies to provide life and general insurance policies in the country in 2018-19. He said the board is now considering proposals by international consultants to help it screen and review foreign insurance providers before permitting them to compete in the local market. Liberalising the insurance sector is important not just because penetration rates in Myanmar remain the lowest in the region. Allowing foreign insurance providers to operate here will help the country develop a deeper bond market, enabling the government to raise sovereign debt to plug the budget deficit. Currently, state-owned Myanma Insurance dominates the domestic insurance industry, accounting for more than 45pc of total gross written premiums in 2017, according to the Central Bank.
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  Ministry of Commerce permitted four joint venture investments between foreign and local investors in the domestic retail and wholesale sector in Myanmar

  Six months after allowing foreign investors to register and participate in the domestic retail and wholesale sector in May, the Ministry of Commerce (MOC) has so far permitted four joint ventures between foreign and local investors Under notification 25/2018 issued on May 9, the MOC allowed 100 percent foreign-owned businesses to operate in the retail and wholesale sector in Myanmar. On July 26, the MOC issued standard operating procedures (SOP) for retail and wholesale business registration and a priority list of 24 products and items. Among the four companies is AEON Orange Co Ltd, which is a joint venture between Japanese retailer AEON Co and its local partner Creation Myanmar Group of Companies (CMCG). The JV distributes 15 out of the 24 products on the priority list. AEON Orange opened its first supermarket in North Okkalapa, Yangon, and acquired 14 supermarkets operated by Hypermart Asia Co, an affiliate of CMGC, in 2016.
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  Myanmar Pearl Law has been amended for the second time to allow more foreign direct investment (FDI) in pearl production industry

  The Myanmar Pearl Law has been amended for the second time to allow foreign direct investments (FDI) in the sector, U Min Oo, managing director of the Myanmar Pearl Enterprise, told The Myanmar Times. According to U Min Oo, the pearl production sector is now among the extraction sectors that will be open up to foreign investors. So far, four companies from Japan, Australia, Thailand and Singapore have already invested. The amended 2018 law replaces the 2014 Myanmar Pearl Law.
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  Myanmar- Singapore joint venture company Puma Energy increased its capital injection by USD$ 10.2 million in aviation fuel import, storage, and distribution services

  A Myanmar-Singapore joint venture company has increased its capital injection by 10.2 million U.S. dollars in aviation fuel import, storage and distribution businesses, Xinhua has reported. The National Energy Puma Aviation Services Company is shared by state-owned Myanmar Petroleum Products Enterprises and Singapore-based Puma Energy with the Myanmar enterprise company holding more stake.
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  Five basic areas need to be improved before Myanmar can expect a meaningful boost in foreign direct investment (FDI): business administration, power supply, IP protection, financial reform, and skills development

  Myanmar is raising efforts to draw foreign direct investments (FDI) into the country after its economy took a beating in recent quarters, hit by the slide of the kyat against the dollar. Even though the Central Bank of Myanmar has taken measures to stabilise the local currency, the kyat may be in for further volatility in the coming months if the current geopolitical landscape is anything to go by. Trade tensions between the US and China have intensified, while relations between oil superpower Saudi Arabia and its western allies have soured following the murder of Saudi Arabian Washington Post journalist Jamal Kashoggi in Istanbul on October 5. Things could also get shaky over in Europe, as Italy, already one of the most indebted countries in the world, prepares to push a higher spending budget past the European Commission. Meanwhile, the UK’s withdrawal from the EU could roil markets in the months to come. All that could prompt further capital outflows and exchange rate volatility for Myanmar.
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  Myanmar Investment Commission held its second Myanmar Investment Promotion seminar in Hong Kong to promote more foreign investments from Hong Kong which is the fourth largest investor in Myanmar

  YANGON— One week after the government announced their 20-year foreign investment promotion plan, Myanmar Investment Commission (MIC) has held an event seeking more investment from Hong Kong, which already stands as one of the largest investors in the country. MIC held their second Myanmar Investment Promotion seminar on Tuesday in Hong Kong. The first seminar was held there in June. More than 150 Hong Kong companies and an official of Hong Kong SAR’s government, Secretary of Commerce and Economic Development Edward Yau, attended the seminar, according to a press release issued by the event organizers. Chairman of MIC, U Thaung Tun said the investment body is ready to create an investor-friendly environment and is already making investment regulations more efficient and effective for investors.
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  Myanmar authorities expect to raise investments and growth in mining industry after the government permitted local and foreign investments in Myanmar’s mining blocks

  Myanmar’s mining industry is expected to expand in next year on the back of higher foreign and domestic investments. And as more permits for small-scale mining in the regions and states will be approved, mineral exports will also improve during the year, U Than Soe, deputy permanent secretary of the Ministry of Natural Resources and Environmental Conservation (MONREC), told The Myanmar Times. Growth in the sector is expected after the government permitted local and foreign investments in Myanmar’s mining blocks under the new Myanmar Mining Rule enacted in February. Under the new legislation, foreign companies will now be able to invest in large-scale sites of more than 500,000 acres (202,000 hectares) as well as medium scale sites of up to 247.1 acres. MONREC will also allow investments in small-scale mining sites for gold and other precious metals of up to 4 acres, sites of up to 10 acres for other minerals and sites for raw industrial materials and precious stones of up to 20 acres.
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  Myanmar government plans to hold a Summit targeting foreign investors from East Asia before the end of the year

  YANGON—Looking to arrest a two-year decline in foreign investment, the government plans to hold a summit targeting investors from East Asia before the end of the year, a senior economic official said. “We are open to all countries are who eager to invest in Myanmar. But our main focus this time is East Asian countries,” U Than Aung Kyaw, deputy director general of the Directorate of Investment and Company Administration (DICA), told The Irrawaddy. The Myanmar Investment Commission (MIC) and the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI) expect to hold the summit in December, according to DICA. “Our investment policy has turned to the East,” U Than Aung Kyaw said. Among the East Asian countries and regions Myanmar is wooing are China, Hong Kong, Macau, Japan and South Korea—some of which are already among the largest investors in the country.
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  Myanmar and China signed a MOU on feasibility study of a railway linking Muse with Mandalay Region in order to reduce transportation cost and contribute to socio-economic development

  China and Myanmar signed a memorandum of understanding (MoU) on Monday to conduct feasibility study of a railway linking Muse, a border town in Myanmar's northeastern Shan state, with Mandalay, the country's second largest city in the north. Under the MoU, inked between China Railway Eryuan Engineering Group Co. Ltd and state-run Myanma Railways, the feasibility study will be conducted within two years covering environmental and social impact assessment. The project is expected to reduce transportation cost, contribute to socio-economic development while conforming to environmental conservation, Myanmar Transport and Communication Minister U Thant Zin Maung said during the signing ceremony.
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  Myanmar real estate market could be more stabilized due to the rising demand for home loans at a specified interest rate from the private banks

  Housing loans and repayments of those loans in monthly instalments have begun to flourish in Myanmar’s real estate market since the beginning of this year, as more construction companies and real estate developers collaborate with banks to make home ownership more accessible. These days, banks are offering home loans at a specified interest rate and tenures of 15 years for ordinary apartments and 25 years for condominiums. In the past, payments were mostly made in cash. The government has been building low-cost or affordable housing, but the homes can sometimes still be beyond the reach of those who need them the most, said U Nay Min Thu, managing director of property website iMyanmarHouse.com.