March 22 - 28 | 2014

ECONOMY EU And Myanmar Reach Investment Protection Agreement

Source : Thura Swiss, (27th March) . The EU-Myanmar Investment Protection Agreement, which was agreed following a meeting between EU Trade Commissioner Karel de Gucht and Myanmars Minister for National Planning and Economic Development Dr Kan Zaw, will offer EU investors in Myanmar guarantees including protection against such matters as discrimination, expropriation without compensation, unfair treatment and will allow for the transfer of capital. The agreement is seen by the EU as key to helping maintain the influx of foreign investment in Myanmar, as it will ensure the confidence of EU businesspeople in investing in Myanmar. One of the key barriers cited by foreign investors apprehensive about investing in Myanmar is the lack of legal clarity and security of their investments, and this agreement should go some way to giving more confidence to potential investors. The EU formerly dropped all remaining economic sanctions against Myanmar in July 2013 and has taken a number of measures to make it an attractive market for EU investors, including reinstating the Generalized Scheme of Preferences (GSP) tariff, which had previously been withdrawn in 1997 over forced labor issues. In 2013, bilateral trade between the EU and Myanmar reached 569 million (US$ 785 million), an increase of 41 percent from 20 12. EU exports to Myanmar increased by 45 percent in 2013, reaching 346 million (US$ 478 million), with key exports being powered aircrafts, pharmaceuticals, electrical machinery and equipment.

INVESTMENT Myanmar Offers Singapore Firms New Business Opportunities

Source : Channel News Asia, (18th March) Singapore companies can benefit from growing business opportunities in Myanmar amid the country's rapid development. New potential partnerships beyond Myanmar's capital Yangon were highlighted on Tuesday at the IE Singapore Global Conversations dialogue. The dialogue was attended by a visiting Myanmar delegation, jointly led by chief ministers for Yangon, Bago and Mandalay. Among the business opportunities is the upcoming Hanthawaddy International Airport in Bago, which is expected to drive demand for aviation-related services such as maintenance, repair and operations engineering, ground handling, catering and air cargo services. Myanmar's second largest city and logistics hub Mandalay also offers prospects for establishing export-oriented manufacturing trading activities with China and India. In the past year, Singapore companies have tapped on business opportunities in the infrastructure, urban development and hospitality sectors in Myanmar. Singapore is Myanmar's third largest trading partner and fourth largest investor,

with bilateral trade amounting S$3 billion in 2013 - a 70 per cent jump from the year before. IE Singapore said overseas investments by Singapore in Myanmar have grown at a compound annual growth rate of 31.7 per cent over the last five years, reaching S$3.7 billion in 2012.

HOTEL & TOURISM Thai Hoteliers Seek Cooperation in Myanmars Hotel, Tourism Industry
Source : Myanmar Business Today, (24th March) Thai hoteliers are seeking cooperation in hotel and tourism industry with Myanmar, officials told a press conference of Yangon HORECA Bizmatch fair last week. The Hotel Restaurant and Catering Business Matching was held in Yangon last week along with a half-day seminar aimed at promoting the hotel supply chain cluster from Thailand to meet with small and medium enterprise (SME) hotel and restaurant entrepreneurs in Myanmar for future business transactions. The business matching event aimed to find solutions to tackle the boom in tourism and hotel industry in Myanmar and the upcoming ASEAN Economic Community (AEC) 2015. The event was attended by 21 companies from Thailand, covering a range of products, equipment, machines, accessories and service. In 2013, Myanmar attracted over 2 million tourists, of whom 1.14 million entered through border gates and 885,476 through airports. Myanmar targets 3 million tourist arrivals in 2014. According to official statistics, bilateral trade between Myanmar and Thailand stood at $4.53 billion in the first nine months (AprilDecember) of the current fiscal year 2013-14. Of the total amount, Myanmars export to Thailand reached $3.55 billion while its import from Thailand stood at $971.46 million. Thailand invested $9.995 billion in Myanmar as of January 2014 since 1988, making it second in Myanmars foreign investor lineup.

Myanmar Halts Bagan Hotel Construction

Source : Myanmar Business Today, (26th March) The Myanmar government will not allow the construction of any new hotels in Bagan in Mandalay region. The government will stop all new development in the ancient city as it moves forward with plans to list the ancient city as a UNESCO World Heritage site, according to a DPA news agency report. Work on existing projects however, will be allowed to continue. We will not allow new hotel constructions there, Soe Thein, minister for the presidents office, was quoted saying. We must keep Bagan as an ancient city, but we cant cancel the hotel deals that the former government allowed. There are currently 17 hotels under construction in four zones adjacent to temple city, but none are situated in the site itself. Over the past two decades, several hotels and other buildings were granted permission to be constructed in the heart of ancient Bagan, such as the Aureum Palace Hotel and the 61-metre Royal Watchtower. The Kingdom of Bagan existed from the 9th to the 13th centuries and was once home to more than 10,000 temples. At least 2,200 of these survive today, although poor restoration techniques have previously been cited as a reason why Bagan is not already on the UNESCO list. It is one of Myanmars most popular tourist attractions, drawing an estimated 400,000 tourists last year. Any new nomination process is likely to take several years to complete.

RESIDENTIAL Yangon Condo Prices To Fall As More Condos Enter Market

Source : Myanmar update, (19th March) Condominium prices in Yangon would fall this year as new condos under construction would be completed, offering more rooms into the market, according to a Flower News report. More condo rooms will enter the market soon and big name construction companies are investing more in condominiums, according to market sources. Currently there are no significant changes in the condo prices in Yangon, according to the sources. Khin Maung Aye of Shwe Kan Myay Real Estate Agency said, There are more new condos in the market. There are more vacant rooms. The prices would be stable as the condo rooms would be at the fingertips of the buyers, said the agent. As more high-profile condos will enter the market, the condo prices could fall, he predicted.

Authorities Invite Foreign Investments in Housing Sector

Source : Myanmar Business Today, (24th March) The construction ministry is planning to invite foreign investors in Myanmars housing sector as the government struggles to fund its ambitious low-cost housing projects to provide accommodation for the lower income bracket of Yangons population, an official said. About 30 percent of Yangons residents are living in sub-standard homes because of the rising population in the city. We decided to take up low-cost housing projects as a solution, Aye Aye Myint, director at the Department of Human Settlement and Housing Development (DHSHD) under the Ministry of Construction, told an infrastructure summit in Yangon. She said a total of 36,000 housing units were built between 2005 and 2010 in Yangon, but the demand is over three times the supply. Among those, about 30 percent were government projects and the rest were built by the private sector. So, it makes sense to invite foreign companies to invest in this sector. As urban migration is on the rise in Yangon, so are the housing needs. So, we need to invest a lot in this sector, she said, adding that the government is currently working on its housing financing mechanism and legal framework. The DHSHD and Yangon City Development Committee (YCDC) are planning to launch seven low-cost housing projects with 11,868 units, seven affordable housing projects with 26,142 units and 37 projects under Public-Private-Partnerships, the director said.

GENERAL PROPERTY Myanmar Sees More Real Estate Advertising Online As Internet Users Grow
Source : The Myanmar Times, (24th March) Online advertising is increasingly becoming the way to advertise property, industry professionals said. Though print advertising still dominates the market, improving internet speed and expanded access to mobile phones are encouraging customers to go online. Banking is also more developed, said Michiel Bakker, country manager at online estate agents house.com.mm. A website that is completely free, always accessible from your phone and easy to use in Myanmar and English is a clear revolution for the Myanmar market, he added. U Hein Moe Myint Lwin, CEO of Estate Myanmar, said viewing properties via websites could be the future of real estate. Adver tising properties online is quite supportive for the business, he said. Since the traffic got so bad, we cannot reach as many customers. Still, there are many customers who enjoy looking at a real house. So we cant count on online advertising very much. I expect advertising online will be really widespread in the next couple of years, depending on connection speed, he added. Several agencies are venturing online, setting up or upgrading websites. More than 50 new websites have appeared, he said.

INDUSTRIAL First Thilawa SEZ Factory Construction To Start In May

Source : The Myanmar Times (24th March) Construction on the first factories to be built in the multi-billion dollar Thilawa Special Economic Zone (SEZ) will begin in May, the chief executive for the project announced last week. Takasahi Yanai, president and chief executive of Myanmar-Japan Thilawa Development Co, announced the SEZs latest plans during a speech at Yangons Sedona Hotel on March 18, adding that some of those factories could be operational before the end of 2015. The announcement comes after more than US$21 million worth of shares of SEZ went on sale earlier this month, while land leasing for the SEZ is still expected to go forward before May. The large-scale project worth at least $3.28 billion has drawn 17 foreign companies thus far across the manufacturing, garments, processed foods and electronics industries. Though the names of those firms have yet to be released, Mr Yanai said some that the interested parties hail from Australia, China, Japan and Hong Kong. Were in a better position than we expected, he said.

REFORMS Foreign Currency Management Law Required For Foreign Money Loans
Source : Eleven Media, (19th March) Private banks will be able to offer loans in foreign currency only after the government passes the foreign money management law, Khin Saw Oo, vice governor of Myanmar Central Bank, said on Monday (March 17). The Central Bank official was speaking at the parliament in response to a question by MP Nay Win Tun on whether private banks should be allowed to offer foreign money loans. Meanwhile, the Myanmar Central Bank has already drafted rules to be applied to the states foreign currency management. The Attorney-Generals Office also contributed suggestions for amending the bill. It will soon be signed into law, the vice governor said. Licensed foreign currency dealers will also be allowed to offer foreign money loans to local residents in accordance with the law, she added. Licensed banks may raise capital in foreign currency. They may accept foreign money in deposits and get foreign loans from local and international markets. The central bank will lay down the rules to monitor and control interest rates for the loans. It is critical for the banks to have sufficient resources of foreign currency, Khin Saw Oo noted. Banks still cannot loan in foreign currency. This lack of connectivity between bankers and business people creates several disadvantages. Some importers find difficulties in their work because of insufficient foreign money, and sometimes also because of insufficient capital in local currency. They need credit services from banks. If banks can arrange foreign money loans, it will be so advantageous, said MP Nay Win Tun.

YANGON (MYANMAR) H2 2013 PROPETY MARKET REPORT

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