Myanmar Regulatory Update Summary
1. Banking Sector Liberalization
- Foreign Banks Awarded Licenses: Seven foreign banks received preliminary licenses, including subsidiaries and branches from Asian countries.
- Final Licenses: To be awarded within 9 months.
- Kasikornbank (KBank): Approved to buy 35% equity stake in Ayeyarwaddy Farmers Development Bank (ABank).
- License Costs: Branch license - USD 75mn, Subsidiary license - USD 100mn.
- Activities: Foreign bank subsidiaries can start retail banking activities in January 2021 with up to 10 branches.
2. Yangon Stock Exchange
- Foreign Trading: Both residents and non-residents can trade stocks through Myanmar Kyat (MMK) current accounts.
- Account Types: Resident Kyat Account (R-KAS), Non-Resident Kyat Account (N-KAS), Non-Resident Foreign Currency Account (N-FAS).
- Foreign Ownership Limit: Set for each company listed on the YSX.
3. Economic Outlook for 2020
- Growth Projection: +1.8% in 2020, slower due to the COVID-19 pandemic.
- Downside Risks: External conditions, COVID-19 developments, global economic recovery, China's economic slowdown, political climate, and financial stability risks.
- FDI: Expected to continue flowing into the country, especially in manufacturing and infrastructure.
4. Key Takeaways
- Tailwinds: Structural reforms, economic liberalization, long-term FDI inflows, government investment.
- Headwinds: Global economic recovery, China's economic slowdown, COVID-19 developments, political climate, and financial stability risks.
