Issue 18, June 28, 2012

Thura NewsViews
Companies & Investments

Myanmar Economics and Politics

The new foreign investment law is expected to be passed at the next parliamentary session in late July, the Financial Times reports citing U Thaung Lwin, co-secretary of Myanmar Investment Commission. Meanwhile, foreign investment figures up to end of May 2012 only $133m - show that companies are waiting for this law hesitant of any major financial decision. Another bill that is relevant to foreign investors, the law on special economic zones (SEZ), will also be delayed from the earlier expected date in July to Oc tober, U Thaung Lwin disclosed to FT. Its currently being revised with the help of Japanese consultants, he added. The law will promote three large SEZs in the country giving more incentives to investors there than in the 18 smaller industrial zones. As investors continue their wait, Myanmar officials have repeatedly called on them to help the country build infrastructure and promote its economic growth. The US government is being pressured to move quicker on issuing licenses to US businesses wanting to invest in Myanmar. Two US Senators, a Republican and a Democrat, and the US Chamber of Commerce have called on the US authorities to allow oil and gas companies to invest in the Southeast Asian nation. The US Chamber of Commerce issued a statement related to this on 27 June while Democrat Jim Webb and Republican James Inhofe made a similar appeal addressed to the first US ambassador to Myanmar in 22 years, Mr Derek Mitchell. Ambiguity surrounding US sanctions are adding to general foreign investors hesitance towards Myanmar. Myanmar Securities Exchange Centre has approached at least 22 local companies operating in various industries with an offer to list them on its securities trading floor that will be revived by 2015. The latter is being developed by Tokyo Stock Exchange, the state-owned Myanmar Economic Bank and Daiwa Institute of Research. Two bourses may be set up by 2015, one in Yangon and one in Mandalay, Managing Director of Myanmar Securities Exchange Centre Shigeto Inami has said in an interview to the Wall Street Journal, adding that they were looking for companies that were interested in initial public offerings (IPO). Myanmar Securities Exchange Centre will also help privatize state owned enterprises. Their privatization will help them become more efficient now that the Central Bank of Myanmar has started a managed float of the kyat, the local currency. Prior to this, the official exchange rate was 6 Kyat to 1 dollar which helped mask the state enterprises losses. There are only two local companies the shares of which are traded at the My anmar Stock Exchange, Forest Products Joint Venture Corporation Ltd., and Myanmar Citizens Bank; however, the public interest in buying shares is very strong.

Thura Swiss Ltd. Economic Research Shwe Hinthar B 307 6 1/2 Miles Pyay Road 11 Qtr. Hlaing Tsp. Yangon, Myanmar Phone +95 (0)1 654 730 Fax +95 (0)1 654 733 info@thuraswiss.com www.thuraswiss.com

June highlights Aung San Suu Kyi ends international tour with visit to France

Myanmar in figures
GDP (PPP)- $82.72bn (2011) GDP (official ex.rate) - $50.2bn (2011) GDP growth rate6.7% (FY2012-13 proj.) Population58.4mn people (2009) Inflation8.9% (2011) Foreign trade$16.1bn (FY2011-12 est.) FDI- $40.42bn (2011) Foreign Exports-$9.09bn (FY201112) Kyat/$ = K873/1$ (28/06/12)

Weekly Newsletter

This newsletter was written by Thura Swiss Research. Thura Swiss research is non-partisan and expresses no other views than those of its author(s). These views may be subject to change in the future without any obligation on the part of Thura Swiss to reflect these changes in the current publication. The information contained in this publication has been obtained from public sources and Thura Swiss is not responsible for its accuracy. The information in the publication does not constitute provision of investment advice.

Thura NewsViews

28.06.2012

Myanmar Economics and Politics

Four major Myanmar business conglomerates including Kanbawza Group, Htoo Group of Companies, Max Myanmar Group and Shwe Taung Group intend to enter the domestic insurance market, a local journal, Eleven Media Group, reports. While the first three groups will provide insurance services under the auspices of their respective banks (Kanbawza Bank, Asia Green Development Bank and Aeyarwady Bank), Shwe Taung will set up a separate insurance company. The government has recently invited private domestic companies to apply for insurer licenses. The application process will be closed on 29 June and companies that receive licenses will start operating around the end of 2012, U Sein Min, Deputy General Manager of Myanmar Insurance, the state monopoly company, has said. These companies will provide only certain types of insurance such as life insurance, car insurance, money transfer insurance, money safety insurance and fraud insurance. Indonesias largest cement producer, PT Semen Gresik, has announced that it will build a new cement plant worth $159m in Myanmar next year. The plants capacity will be 600,000 to 1m tons of cement a year, the companys CEO Dwi Soetjipto said. The company plans to set up a JV with a local partner for this project and finance 20% of it with own funds while raising the remaining amount from external sources possibly through a global bonds issue, Mr Soetjipto added. The construction of a new cement plant in Myanmar is justified by the increase in construction and further expected boom in the sector. Japans All Nippon Airways will resume direct flights between Tokyo and Yangon in September 2012 after a 12 years absence. The airline will operate flights from Tokyo to Yangon three times a week and will add charter flights in the same direction as well as to Nay Pyi Taw Yangon-Hanoi -Tokyo. September will also be the month when South Korean businessmen will no longer have to fly through another country to reach Myanmar. Korea Air will fly from Seoul to Yangon four times a week. And South Korean tour ists will also have a choice as Myanmar Airways International will start operating flights to Seoul by year -end. It will also start flying to Vientiane and Hong Kong.

Three private companies will start providing domestic express courier services. Magnate Group Logistics, United Courier Services and Kispanadi Express will provide delivery services under a private -public partnership agreement with Myanmar Posts and Telecommunications. The express service has previously been a monopoly of MPT.

Banking

Weekly Newsletter

Stephen Groff, Asian Development Banks vice president for East Asia, Southeast Asia and the Pacific, has started a 4-day visit to Myanmar on 26 June. He is expected to meet Myanmar President U Thein Sein. The meeting may help re-launch ADBs lending to the Southeast Asian nation although this has to be decided by the banks member countries after evaluation of Myanmars reform process. The latter also has to clear its debt arrears to ADB which amount to $500m. The Krungthai Bank of Thailand has recently opened a representative office in Myanmar. This has brought the number of foreign banks representative offices to 20. The Siam Commercial Bank, another Thai bank, also plans to set up a similar office in the country. Foreign banks are not yet allowed to provide financial services and representative offices just serve to gather information. They are also a good point of entry into the market of Myanmar.

This newsletter was written by Thura Swiss Research. Thura Swiss Research is non -partisan and expresses no other views than those of its author(s). These views may be subject to change in the future without any obligation on the part of Thura Swiss to reflect these changes in the current publication. The information contained in this publication has been obtained from public sources and Thura Swiss is not responsible for its accuracy. The information in the publication does not constitute provision of investment advice.

Thura NewsViews

28.06.2012

Economy
In a move to support the domestic agricultural sector, the Ministry of Finance and Revenues has announced a 9 -month tax exemption period to be granted for import of chemical fertilizers, insecticides, farm machineries and tools starting on July 1st, 2012, and up to March 31st, 2013. Local producers of fertilizers, insecticides, tools and machineries will also be exempted from commercial tax on manufacturing and sales of these prod ucts. The usual tax rate for these products is 5 percent.

Myanmar Economics and Politics

Tenders

Myanmar Investment Commission is inviting bids for renovation of four colonial -period buildings into hotels without destroying their original architecture. The following is the list of these buildings: (1) Former Ministry of Hotel and Tourism Building. No. (77/09), Corner of Sule Pagoda Road and Maha Bandoo la Road, Pabedan Township, Yangon. (2) Former Ministry of Oil and Gas Enterprises Building. No. (604/608), Merchant Road, Yangon. (3) Former Myanmar Trade Corporation (No.5) Building. No. (19/43), Bo Son Pat Road, Pabedan Township, Yan gon. (4) Former Import/Export Office (4-Storeyed Building). No. (569/577), Corner of Merchant Road and Maha Ban doola Road, Kyauktadar Township, Yangon. Proposals should be submitted to the Myanmar Investment Commission, Office No. (32), Naypyitaw, before 7 July 2012. For further information please contact Myanmar Investment Commission at 95 -67-406184, 406334.

The Department of Air Transport and the Ministry of Transport would like to invite interested individuals, either domestic or foreign, to participate in the construction of Hanthawaddy International Airport, and operation of domestic and international airports on B.O.T and JV terms. There will be a conference on the procedure for private participation that will start at 10 am on 2 July 2012 at the Meeting Hall of the Aeronautical School, Department of Air Transport (on the Yangon International Airport Highway).

Weekly Newsletter

This newsletter was written by Thura Swiss Research. Thura Swiss Research is non -partisan and expresses no other views than those of its author(s). These views may be subject to change in the future without any obligation on the part of Thura Swiss to reflect these changes in the current publication. The information contained in this publication has been obtained from public sources and Thura Swiss is not responsible for its accuracy. The information in the publication does not constitute provision of investment advice.