Singapore investors pile funds into Myanmar as interest in Myanmar rises

Yoma Strategic, an affiliate of Yangon Stock Exchange-listed First Myanmar Investments Company (FMI), has successfully closed a placement of shares that will enable it to raise S$82.2 million in fresh funds in Singapore, where it is listed on the Mainboard of the Singapore Stock Exchange.

In a November 5 statement, Yoma Strategic said the placement, which was oversubscribed, received interest from both existing and new investors.

Under the placement, a total of115 million new shares were issued at 53 Singapore cents each, representing a discount of 9.4 percent to the volume weighted average price of 58.5 Singapore cents per share for trades done between November 2 and November 3. The new shares will represent 8.2pc of the enlarged share capital of the company.

The proceeds will be used to accelerate growth in the company’s core real estate, automotive and heavy equipment as well as consumer-related businesses. At least half of the S$82.2 million in proceeds after deducting fees and expenses will be channeled into Yoma Strategic’s real estate business. This includes the building of rental properties and development properties at Pun Hlaing Estate and StarCity as well as the further development of two Dulwich International Schools in Yangon.

Meanwhile, up to 20pc of the proceeds will be invested in the automotive and heavy equipment business, including capital expenditure for Yoma Fleet and New Holland tractors. The company is seeing high demand for its tractors and other heavy equipment from the Myanmar agriculture sector. During the recent July-September quarter, it sold 600 tractors under a contract with the Ministry of Agriculture and Irrigation (MOAI).It is due to deliver another 151 tractors to the MOAI.

The Group will also invest 15pc-20pc of the proceeds to expand its chain of KFC stores in Myanmar, where KFC is currently available in Yangon, Mandalay and Taunggyi. The company opened its 16th KFC store on September 30.

For the six months to September 30, 2017, Yoma Strategic announced revenues amounting to S$59 million, representing an increase of 38.6 percent year-on-year (yoy). As a result, earnings for the period rose 8.9pc yoy to S$10.5 million. 

Yoma Strategic is run by Myanmar tycoon Serge Pun and his son Melvyn. Mr Pun also controls FMI.

Raising funds

Yoma Strategic isn’t the only Singapore-listed company raising funds for expansion in Myanmar. In August, Singapore Myanmar Investco (SMI) announced a placement of 15.4 million new shares at 48 Singapore cents each, representing a discount of 8.5pc to its last traded price before the announcement was made. SMI is an investment and management company focused on the business of travel and fashion retail, food and beverage, auto services and construction and logistics services in Myanmar. 

 The proceeds of S$7 million were channeled to the construction and fit-out of retail shops, F&B outlets and service centers for the auto and construction businesses in Myanmar. In March, SMI secured. 65pc of the commercial space in Level 1 of Junction City shopping mall pn Bogyoke Road in Yangon , where luxury brands like Coach, Aigner, Pandora, Bering, Versace, Love Moschino and Furla have since commenced business.

SMI has also signed an agreement to occupy 6,700 sq m of retail space at the new terminal of Yangon International Airport, where it is now running the duty free business consisting of 30 lifestyle brands. The duty free merchandise for the multi-brand and multi-category store is supplied by DFS Venture Singapore based on a 10 year exclusive supply agreement signed by SMI in 2015.

SMI is also responsible for bringing F&B brands like Chinese restaurant Crystal Jade, Japanese ramen outlet Ippudo and cafe chain The Coffee Bean & Tea Leaf to Yangon.

 As a whole, Singapore is now the largest foreign investor in Myanmar. For the first six months of the 2017-18 fiscal year, total approved foreign direct investments (FDI) from Singapore totaled $1.7 billion, overtaking China at $829 million. In 2016-17 approved FDI from Singapore totaled $2.96 billion. 

Since 1988-89, Singapore has been involved in a total of 265 approved projects worth $18.9 billion in Myanmar, according to the Myanmar Investment Commission.

(The Myanmar Times: https://www.mmtimes.com/news/singapore-investors-pile-funds-myanmar-interest-rises.html )

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