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PwC MyanmarWeekly Business Intelligence

Issue 18716 November 2019

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PwC | November 2019

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PwC | November 2019

1. Weekly Key Financial & Business News

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PwC | November 2019

Weekly Key Financial & Business NewsHeadlines

Cabinet to adopt development guideline for Dawei SEZ link

EIA and SIA begin in Kyaukphyu SEZ and Kyaukphyu deep seaport port

Khin Shwe’s National Development maintains 12% dividend as profits fall

Myanmar lags as ASEAN sees record FDI

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Yangon Hotel Rates Remain a Bargain

PwC | November 2019

Weekly Key Financial & Business NewsHeadlines

ADB provides $51.2m for all-weather roads in rural areas

New Zealand discusses with Myanmar to provide technical assistance

Italy-Based ENI to Begin Exploring for Oil in Myanmar’s Mandalay Region

Tourist numbers to Myanmar rise

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Trade war could be ‘silver lining’ for Myanmar

PwC | November 2019 6

EIA and SIA begin in Kyaukphyu SEZ and Kyaukphyudeep seaport port

Environmental impact assessment (EIA) andsocial impact assessment (SIA) have started inKyaukphyu SEZ and Kyaukphyu deep seaport.The project will be implemented after signingagreements including shareholder and other ones,said Deputy Minister Aung Htoo of the Ministryof Commerce.“Kyaukphyu was already negotiated in the time ofthe first government. The contract was changedinto a ratio of 70-30 from 85-15. Then aframework agreement was signed. Now, the EIAand SIA have already begun. If the shareholderagreement and other ones are signed, the projectwill start an operation, said Deputy Minister AungHtoo.Previously, the agreement showed an 85 % wouldgo to China and a 15 % to Myanmar. In the time ofthe current government, the project was re-negotiated and was newly signed back. Theagreement indicated that a 70% would go toChina and 30 % to Myanmar.“In a ratio of 70: 30, a 70 % goes to China and 30% to Myanmar. In a 30 % of Myanmar, it will bedivided in half, that is, 15 % each to the

government and public companies includingethnics, Union Minister Than Myint told the DailyEleven.Concerning Kyaukphyu SEZ and Kyaukphyu deepseaport, Myanmar-China bilateral frameworkagreement was signed by the managementcommittee of Kyaukphy SEZ and CITICconsortium on November 8 in 2018.“The project is aimed at linking regional economicconnectivities in addition to the interest ofMyanmar and China. PPP projects will berevealed and implemented. Internationalinvestors will be invited to Kyaukphyu SEZ andKyaukphyu deep seaport besides local ones.Transparency will be prioritized and plans havebeen already drawn up,” said Deputy MinisterHset Aung of the Ministry of Planning andFinance.

Source: Eleven Myanmarhttps://elevenmyanmar.com/news/eia-and-sia-begin-in-kyaukphyu-sez-and-kyaukphyu-deep-seaport-port

NewspapersEleven Myanmar

10 Nov 2019


Cabinet to adopt development guideline for DaweiSEZ link

The National Economic and Social DevelopmentCouncil (NESDC) will ask the cabinet to adopt itsguidelines on infrastructure development onTuesday, as the government seeks to startworking on the long-awaited link that will connectthe Dawei Special Economic Zone in Myanmarwith Eastern Economic Corridor (EEC).A source said the NESDC wants ministersconcerned to stick with the guidelines whenapproving budgets and projects which will linkMyanmar, Thailand's Central Plains and EEC onthe Eastern seaboard.According to the source, the NESDC's guidelineswere meant to "set the tone" for the infrastructureprojects, with the ultimate aim of turning thethree regions into a hub for border trade,agricultural production, environmentally-friendlyindustries and eco-tourism."The points on railway and motorwayconstruction are central to the NESDC'sguidelines, as once completed, these projects willplay a key role in transporting goods and peoplefrom Dawei in Myanmar all the way to the EEC,"said the source.

He added that the NESDC plans to ask the cabinetto speed up the development of the SpecialEconomic Zone (SEZ) in Ban Namphun Ron -- aborder town in Kanchanaburi -- which will serveas a "gateway" to Myanmar.

Source: Bangkok Posthttps://www.bangkokpost.com/business/1791489/cabinet-to-adopt-development-guideline-for-dawei-sez-link

NewspapersBangkok Post

11 Nov 2019


Khin Shwe’s National Development maintains 12% dividend as profits fall

National Development Company Group, chairedby construction magnate U Khin Shwe, hasannounced that it intends to maintain dividendpayouts to shareholders yielding an annual 12percent for the next three years.The surprise announcement came just monthsafter U Khin Shwe, who also owns localconglomerate Zaykabar, said that he shed tearsand lost sleep over his worrying businesssituation and that other business people werefacing a similar fate because of the need to repaybank loans.“Everyone is worried, including myself. I havearound 400 to 500 workers. I am not able to firethem… Everyday, I cannot fall asleep [because ofthe business woes],” he said in August, quoted bylocal media.Despite reports of his concerns, the tycoon toldNational Development’s annual general meetingon November 6 that shareholders would start toreceive an annual dividend yield of 12pc thismonth because the company had already receivedsufficient gains to cover payouts for the next threeyears.

“I could personally even give out a rate of returnof 15pc, not 12pc. We will be making moreinvestments in the future. So, this is why we arepaying the shareholders. They need to havemoney in their hands when we make futureinvestments.”U Khin Shwe added that he plans to increase therate up to 20pc “in the future” but did not give aspecific timeline.National Development is involved in variousenterprises, including investments inKinpunsakhan Hotel on the Yangon-Mawlamyineroad, Myanmar Thilawa SEZ Holding Public Co(MTSH), Small & Medium IndustrialDevelopment Bank, Myanmar TourismDevelopment Public Co and other businesses,according to the annual financial report seen byThe Myanmar Times, which is not availableonline.

Source: Myanmar Timeshttps://www.mmtimes.com/news/khin-shwes-national-development-maintains-12-dividend-profits-fall.html

NewspapersMyanmar Times

12 Nov 2019


Myanmar lags as ASEAN sees record FDI

Foreign direct investment (FDI) into Myanmarstill lags other countries in ASEAN, according to areport issued by the ASEAN Secretariat last week.The report ASEAN Investment Report 2019: FDIin Services showed that FDI into Myanmardeclined despite record-high inflows into othercountries in the grouping.FDI in Myanmar in 2018 slumped 11 percent toUS$3.6 billion, primarily because of a 48 percentdecline in investments in extractive industries.Although the country benefits from over 59percent of investments from ASEAN countries,Myanmar is the only one among the CLMVcountries - Cambodia, Laos, Myanmar, andVietnam - that saw a decrease in intra-ASEANinvestment.Myanmar continues to be favoured by companiesbased in Singapore, though many of them aresubsidiaries of Chinese or Hong Kong entities.In 2018, more than 48 per cent of all intra-ASEAN investments went to Indonesia, making itthe largest recipient of intraregional investment.Globally, the ongoing US-China trade war hasseen combined FDI to the CLMV countries rising

by 4 pc to $23 billion last year, accounting for15pc of FDI in ASEAN, though Myanmar, alongwith Laos, still lagged behind.“Chinese and other Asian multinationalenterprises are shifting production to the CLMVcountries for cost reasons and in some casesbecause of the effect of the United States-Chinatrade tensions,” the report stated.Vietnam took the lead in attracting over US$15billion of FDI among the CLMV.“The highest-ever inflows in Cambodia andVietmam helped the group record the strongerlevel of investment,” said the report.Against this backdrop, FDI into ASEAN reached arecord of US$155 billion in 2018 from US$147billion in 2017, rising for the third consecutiveyear. Global FDI to the region has equallyexpanded from 9.6pc in 2017 to 11.5pc in 2018.

Source: Myanmar Timeshttps://www.mmtimes.com/news/myanmar-lags-asean-sees-record-fdi.html


12 Nov 2019


Yangon Hotel Rates Remain a Bargain

YANGON, 8 November 2019: Yangon will close2019 with at least 400 new rooms in the city’shighly competitive upper-scale hotel segment,according to the latest Colliers InternationalMyanmar report.That pushes the room total from 5,300 in the fourand five-star categories at the close of the secondquarter of this year to 5,700 by year-end.Colliers International Myanmar assistantmanager research, Hpone Myint Thu, told TTRWeekly the hotel count reached 5,500 rooms atthe close of the third quarter of this year.“The citywide average occupancy rate reached44%. In Q3 2019, the average daily rate (ADR)corrected further downwards to USD80,” heexplained.Looking forward, he added: “As far as we havemonitored, we still have another 1,700 rooms inthe pipeline to be launched in the next threeyears.”For travellers searching for hotel bargains, this isall good news. It’s a welcome incentive to visit acity that has for decades been under the radar.Travel planners will discover online booking sites

are posting bargain room rates in high-qualityhotels that are unrivalled in Southeast Asia withperhaps the exception of Kuala Lumpur. Back in2015, market studies showed the average dailyrate peaked at USD158.Despite the slowdown in hotel performance, lastmonth Westin Hotels & Resorts, a five-star hotelbrand owned by US-listed Mariott Internationalconfirmed it signed a management contract for itsfirst hotel in Myanmar due to open in 2021.Mariott International will partner with propertydeveloper Yoma Land to bring the Westin brandto a USD400 million Yoma Central mixeddevelopment project in downtown Yangon. Whencompleted in 2021, Westin Yangon will bring anadditional 281 rooms.More high-end hotels are on the way during thenext three years including, Peninsula Yangon, afive-star luxury hotel which will also be a part ofYoma Central a project…Source: Consult Myanmarhttps://consult-myanmar.com/2019/11/12/yangon-hotel-rates-remain-a-bargain/

NewspapersConsult Myanmar

12 Nov 2019


New Zealand discusses with Myanmar to provide technical assistance

New Zealand, the top spot in the World Bank’sannual ease of doing business ranking for thethird year in a row, is discussing with Myanmar inorder to provide technical assistance to helpincrease ease of doing business ranking anddevelop the implementation of e-Government,said a source from the Ministry of Commerce.Deputy Minister Aung Htoo of the Ministry ofCommerce discussed with Mr. Stephen Marshall,New Zealand ambassador to Myanmar.Both sides focused on promotion of capacitybuilding of the staffers and the plans to beprovided to give short-term and long-termtraining programs to them.Myanmar managed to carry out changes in fivefields. Myanmar escaped from the 20th ease ofdoing business ranking. There are many fields leftto develop its scores, according to “DoingBusiness 2020 and Way Forward” at SuleShangrila Hotel on November 1.Myanmar took the position of 165 in the WorldBank’s annual ease of doing business on October24.The top 10 best places in the world to do business,

according to the study, are New Zealand (with ascore of 86.8 out of 100), Singapore (86.2), HongKong SAR, China (85.3), Denmark (85.3), theRepublic of Korea (84), the United States (84),Georgia (83.7), the United Kingdom (83.5),Norway (82.6), and Sweden (82).ASEAN economies are Singapore (2nd), Malaysia(12th), Thailand (21st), Brunei (66th), Vietnam(70th), Philippines (95th), Cambodia (144th), Lao(154th) and Myanmar (165th).Myanmar stood at 182nd place in the WorldBank’s annual ease of doing business in 2014,177th place in 2015, 167th place in 2016, 170thplace in 2017, 171st place in 2018 and 2019 and165th in 2020.

Source: Eleven Myanmarhttps://elevenmyanmar.com/news/new-zealand-discusses-with-myanmar-to-provide-technical-assistance

NewspapersEleven Myanmar

13 Nov 2019


ADB provides $51.2m for all-weather roads in rural areas

The Asia Development Bank (ADB) will provideUS$51.2 million to upgrade rural roads inMyanmar to become all-weather and climate-resilient, the bank said in a statement released onTuesday.The bank said in its statement that the fundswould be used for 152 kilometres of roads thatwill benefit villages in Ayeyarwady and Magweregions.The funding consists of a US$45.4 million loanand a US$5.8 million grant. That project willenable the people in project area and itssurroundings to use all-weather roads that willcut down travelling time by car at least 18 minutesalong the route.To increase disaster resilience, the project willraise road surfaces to avoid frequent flooding, andthe surfacing will be constructed with durablematerials such as concrete.“The project will provide rural residents in fourtownships of Ayeyarwady and Magwe withreliable, climate-proof roads, so they can betteraccess markets and job opportunities,” said ADBSenior Transport Specialist for Southeast Asia Mr

Shihiru Date.It will also help Myanmar address the challengesof climate change, which can cause severe damageto deteriorating rural roads, he added.Myanmar has one of the lowest rates of rural roadaccess in Asia, with more than 40 percent of thecountry’s rural population having no access to all-season roads, according to the Rural Access Indexdatabase. ADB studies revealed that over fourmillion people in Myanmar are not connected byroad, and 10 million more are connected by roadsthat are not passable during the rainy season.Only about 6pc of the country’s 95,000km ruralroad network is considered paved, while 28pc hasa gravel or stone surfaces, which are typically inpoor condition.The new project seeks to improve the capacity ofthe Department of Rural Road Development tooperate and maintain the country’s rural roadnetworks.

Source: Myanmar Timeshttps://www.mmtimes.com/news/adb-provides-512m-all-weather-roads-rural-areas.html


13 Nov 2019


Italy-Based ENI to Begin Exploring for Oil in Myanmar’s Mandalay Region

YANGON—ENI, a multinational oil and gascompany headquartered in Italy, will explore foroil and gas in eight townships in MandalayRegion, U Tin Win Hlaing, the chairman of theMandalay regional parliament’s Industry, Energyand Electricity Committee, confirmed to TheIrrawaddy.Exploration will be carried out in PSC-K, anonshore oil and gas block encompassing 1.3million acres (approximately 526,000 hectares)and more than 370 villages in Tatkon, Yamethin,Pyawbwe, Wundwin, Thazi, Myittha, Kyaukse andSingaing townships, he said.ENI Co. explained its exploration plans to theMandalay regional government and parliament inearly November, and plans to hold consultationswith local residents later this month.“First, it will conduct geophysical surveys beforeconducting a feasibility study,” U Hlaing Winsaid.ENI Co. and local company Myanmar PetroleumExploration and Production (MPEP) won a tenderin 2014 to explore onshore block PSC-K. TheItalian company owns 90 percent of the venture,

and the local company 10 percent.“Oil has never been found in Kyaukse—just somegas deposits. We welcome the project if the socialand environmental impacts can be carefullycontrolled. If the site is commercially viable, itwill create jobs and spur development of thetown,” said U Ye Min Tun, a lawmakerrepresenting Kyaukse Township in the Mandalayregional parliament.ENI Co. also operates the RSF-5 onshore blockcovering 300,000 acres in Magwe Region, as wellas offshore blocks MD-2 and MD-4 in the Bay ofBengal and the Gulf of Martaban.

Source: The Irrawaddyhttps://www.irrawaddy.com/news/burma/italy-based-eni-begin-exploring-oil-myanmars-mandalay-region.html

NewspapersThe Irrawaddy

14 Nov 2019


Tourist numbers to Myanmar rise

The Ministry of Hotels and Tourism recentlyreleased data showing that from January toSeptember this year, more than 1.3 millionforeign tourists visited Myanmar.This represents 390,000 more visitors or a 41percent rise compared to the same period lastyear.The ministry said the increase can be attributed tomore visitors coming from Asian countries, suchas Japan, South Korea and China, which havebeen the targets of the government’s “Look-Eastpolicy” for tourism.Tourists from China, Japan and South Korea haveincreased significantly since the governmentrelaxed visa requirements for travellers fromthose countries in October last year, say tourismstakeholders.Currently, visas on arrival are available for morethan 50 countries at Myanmar’s internationalairports in Yangon, Mandalay, and Nay Pyi Taw.The visas allow stays in Myanmar of up to 28days. On October 1, the government alsoextended visas on arrival to visitors fromGermany, Russia, Spain, Italy, Switzerland and

Australia, as part of efforts to attract moretravellers from western countries.However, some travel and tour agencies say theyhave not seen western arrivals to match those inthe past. Industry stakeholders and experts saythe government has to do much more to woowestern tourists and boost the country’s sluggishtourism industry.U Than Naing, a Mandalay-based tour operator,lamented that tour season had already startedwhen the easing of visa requirements for the sixwestern countries took effect.“Travel operators didn’t have much time to makepreparation for this year’s tourism season as theylearned about the visa relaxation for westerncountries just three months in advance,” he said,adding that only backpackers would be able toenjoy the new policy at this time.

Source: Myanmar Timeshttps://www.mmtimes.com/news/tourist-numbers-myanmar-rise.html


14 Nov 2019


Trade war could be ‘silver lining’ for Myanmar

Myanmar has to move to tap into opportunitiescreated by trade tensions between the world’s twolargest economies, said a senior Singaporeanacademic.The US-China trade war has provided “silverlinings” for many countries, such as Vietnam. inthe Southeast Asia region, said Simon Tay,Chairman of Singapore Institute of InternationalAffairs (SIIA), in the opening speech at theMyanmar-Singapore Business Summit yesterday.Vietnam saw a record high of foreign investmentlast year, owing partly to manufacturersrelocating away from China to avoid the tradetariffs.The question for Myanmar is whether the countrycan materialise these “silver linings”, Prof Tayadded.“We expect Singapore investors to enter into realestate, infrastructure and financial sectors ofMyanmar in coming years,” U Thant Zin Lwin,head of the Directorate of Investment andCompany Administration (DICA) and secretary ofthe Myanmar Investment Commission (MIC) toldThe Myanmar Times at a sideline interview.

The official added he expects further investmentsin the real estate market and in industry and thatthe city-state will support Myanmar in takingsteps towards intellectual property rights reform.Organised by the Singapore Association ofMyanmar and the Singapore Institute ofInternational Affairs with support from theSingapore Embassy, the summit was themed“Singapore: Myanmar’s Gateway to the World”.Speaking at a panel, Yasuo Tanabe, chiefexecutive officer of Global Link Lab Inc., said theMyanmar government needs to continue toimprove the transparency and efficiency of theregulatory environment.The country also needs to expand its energy andtransport infrastructure, scaling up the reliabilityand supply of electricity, in order to attract moreinward investments.Many businesspeople see the lack of reliablepower supply as the primary challenge to attractmanufacturers.Source: Myanmar Timeshttps://www.mmtimes.com/news/trade-war-could-be-silver-lining-myanmar.html


15 Nov 2019

PwC | November 2019

2. Weekly Key Policy News

16

PwC | November 2019

Myanmar’s Image ‘Severely Damaged’ by Int’l Legal Cases Over Rohingya: Govt

Weekly Key Policy NewsHeadlines

Reforms behind Myanmar’s climb up the ease of doing business index

Scrutiny needed to ensure Belt and Road projects are viable, says think-tank

Myanmar Govt to Combine Two Key Economic Ministries

17

Govt Promises to Meet Myanmar’s Rising Electricity Demand


Reforms behind Myanmar’s climb up the ease of doing business index

In an endorsement of ongoing efforts to reformthe economy, Myanmar has been named one ofthe top-20 most-improved countries in the WorldBank’s 2020 ease of doing business index.The index – part of the “Doing Business 2020”report – lists the economies that have recordedthe greatest improvement in their ease of doingbusiness score. The bank identified five recentlyimplemented initiatives that have strengthenedthe business environment.In terms of regulatory and legal measures, thereforms cited include the city of Yangon’s decisionto impose stricter qualification requirements forarchitects and engineers, along with a newcompanies law that strengthens minority investorprotections and boosts transparency bymandating fuller disclosure of transactions.To streamline bureaucratic processes, thegovernment, via the Directorate of Investmentand Company Administration, launched an onlinecompany registration platform, simultaneouslydigitising and merging several previously existingprocedures.The reforms helped Myanmar boost its ranking to

165th out of 190 countries in the 2020 ease ofdoing business index, up six places from 171st in2019.At the launch of the “Doing Business 2020” reportin Yangon in early November, Vivek Pathak, theInternational Finance Corporation’s director forEast Asia and the Pacific, emphasised the positiverole that both the insolvency and securetransactions law will have on the financialservices sector, specifically by mitigating againstthe negative consequences of poor non-performing loan ratios in the banking sector.The improved ranking comes amid concertedgovernment efforts to reform the economy,ongoing since 2011, encouraging liberalisationand greater private sector activity.A number of sectors have undergone reforms thathave expanded access to foreign companies.

Source: Myanmar Timeshttps://www.mmtimes.com/news/reforms-behind-myanmars-climb-ease-doing-business-index.html


11 Nov 2019


Scrutiny needed to ensure Belt and Road projects are viable, says think-tank

China’s Belt and Road Initiative (BRI), seen mostvisibly in Myanmar through a proposed“economic corridor” between the two countries,requires government and media scrutiny andregulations to ensure projects are done in asocially and environmentally responsible way, aninternational think-tank says.Transnational Institute, an Amsterdam-basedthink-tank focused on building a just, democraticand sustainable planet, released a briefing paperthis month on the Belt and Road Initiative (BRI)in the Myanmar context.The paper examines four major infrastructureprojects in Myanmar: the interconnection ofMyanmar and Chinese electricity grids; aproposed railway from Kunming to Kyaukphyu; aland and waterway passage between the twocountries, and industrial hubs.“These cases highlight a lack of transparency andmeaningful consultation, as well as thequestionable financial viability and potentiallyharmful social, economic and environmentalimpacts of such projects,” the research paperstated.

Stephanie Olinga-Shannon, the paper’s author,said the BRI is a “branding exercise” for activitiesto address the crisis in Chinese capitalism. Incontrast to the pervasive perception of theinitiative as a predetermined grand strategy led byBeijing, the scheme in practise consists of a widerange of business- and provincial government-driven projects.Individual Chinese companies, state-owned andprivate, are left to decide whether to brand theirinvestment activities as part of the BRI, MsOlinga-Shannon added. The host government hasthe choice to greenlight project proposed.State Counsellor Daw Aung San Suu Kyi stressedthat BRI projects should complement nationalpriorities and take into account the welfare oflocal communities when speaking at the official2017 BRI Summit in Beijing.Daw Aung San Suu Kyi also highlighted the needto ensure responsible business practices.Source: Myanmar Timeshttps://www.mmtimes.com/news/scrutiny-needed-ensure-belt-and-road-projects-are-viable-says-think-tank.html


14 Nov 2019


Myanmar Govt to Combine Two Key Economic Ministries

YANGON—The Myanmar government plans tocombine the positions of Minister of Industry andMinister of Planning and Finance into a singleposition, according to the Union Parliamentagenda for Friday.According to the agenda, a Union-levelrepresentative from the government will explainthe plan to parliamentary lawmakers in order toseek their approval.According to a proposal by President U WinMyint, the two ministries will be merged entirelyand named the Planning, Finance and IndustryMinistry, if lawmakers endorse the plan.In late July, the President’s Office appointed USoe Win, the Union minister for planning andfinance, to concurrently serve as industry ministerafter U Khin Maung Cho was shuffled out of theposition due to performance problems.In August, the Myanmar President’s Officeappointed former World Bank economist andpoverty specialist Dr. Min Ye Paing Hein asdeputy industry minister.The Ministry of Planning and Finance isresponsible for monetary services, bank services,

public finance management, revenue systems,economic plans, investment, human resourcedevelopment and coordination andcommunication with local and foreignorganizations in the country.The Ministry of Industry is responsible for state-owned enterprises and ensuring that they arecommercially viable. The ministry promotes theinvolvement of the private sector in state-ownedenterprises and works to enhance private sectordevelopment to uplift the socioeconomicstandards of citizens by developing small andmedium-sized enterprises. The ministry alsosupports growth in labor-intensive industries,develops export-oriented industries and promotesvalue-added industries.In a bid to reduce government expenditure, theNLD began its tenure in power in 2016 with 19ministers heading 21 ministries.

Source: The Irrawaddyhttps://www.irrawaddy.com/news/burma/myanmar-govt-combine-two-key-economic-ministries.html


14 Nov 2019


Govt Promises to Meet Myanmar’s Rising Electricity Demand

Yangon — The Ministry of Electricity and Energyis hoping to expand electricity access to half of thepopulation by December, according to DeputyMinister U Khin Maung Win.Of 10,877,832 households in Myanmar, 5,140,061– or 47 per cent of the population – had access toelectricity by October.The deputy minister told the Upper House onThursday that the ministry was looking to boostthat to 50 per cent by next month.Myanmar saw record high temperatures duringthe recent hot season, resulting in frequent poweroutages as hydropower failed to meet demand.Power outages have hit factories and transportand pushed up the cost of basic commodities,parliamentarian U Tun Tun Oo said.“As electricity bills increased since July, peoplewill want to have electricity around the clock nextyear. They want value for money,” said U Tun TunOo.The deputy minister replied that the ministrycould generate around 3.8 gigawatts (GW) thisyear, rising to 4.5GW next year.U Khin Maung Win said seven power projects,

with a combined capacity of almost 1.2GW, werebeing implemented.Those projects included liquefied natural gaspower plants, gas turbine power stations and acombined cycle plant in Yangon, Ayeyarwady,Tanintharyi and Magwe regions and RakhineState.The ministry was negotiating power purchaseagreements with operators of the power plantsand was installing power cables to link the outputto the grid, he said.The ministry was also renovating existing suppliesto enable them to run at full capacity, said thedeputy minister.Electricity production increased from 17.3 billionunits in 2016 to 19.4 billion in 2017 and 22 billionin 2018, he said. The ministry hoped to generate23.2 billion in 2019 and up to 27 billion in 2020.

Source: The Irrawaddyhttps://www.irrawaddy.com/news/burma/govt-promises-meet-myanmars-rising-electricity-demand.html


15 Nov 2019


Myanmar’s Image ‘Severely Damaged’ by Int’l Legal Cases Over Rohingya: Govt

YANGON – Myanmar’s image has been “severelydamaged internationally,” said governmentspokesman U Zaw Htay in his response to a seriesof international rights groups’ efforts to prosecutethe country and its leadership at the InternationalCriminal Court (ICC), the UN’s InternationalCourt of Justice and a court in Argentina thisweek.He reiterated that Myanmar stands firm in itsposition on the ICC, as of its statement on April13, 2018, which rejected the court’s claims.The spokesperson stressed that Myanmar has thepolitical will to take action against theperpetrators if its own Independent Commissionof Enquiry (ICOE) finds human rights violationsby the security forces in northern Rakhine State.“We have the willingness to do so. That’s why weare investigating,” he said, adding that the ICOEinvestigation is ongoing, while the military’s courtof inquiry is also doing its part.He said these moves by the internationalcommunity “have disturbed Myanmar’s ownefforts on the investigation” and, as aconsequence, “Myanmar’s image has been

severely damaged internationally.”The ICC on Thursday approved a prosecutionrequest to investigate crimes against humanityagainst more than 730,000 Rohingya Muslims,who fled from Myanmar to neighboringBangladesh after a 2017 crackdown by Myanmar’smilitary following the Arakan Rohingya SalvationArmy’s coordinated attacks on security outposts.UN investigators say the Tatmadaw, Myanmar’smilitary, acted with “genocidal intent,” a claimMyanmar denies.Judges at the ICC, the world’s only permanentwar crimes court, said that although Myanmar isnot a member, the court has jurisdiction toexamine alleged crimes that partially took placeacross the border in Bangladesh, which is amember.

Source: The Irrawaddyhttps://www.irrawaddy.com/news/burma/myanmars-image-severely-damaged-intl-legal-cases-rohingya-govt.html


15 Nov 2019

PwC | November 2019

3. Weekly Investment News

23

PwC | November 2019

Weekly Key Investment NewsHeadlines

Yoma Strategic to buy 10% additional stake in Myanmar’s Wave Money

Thai businesses considering moving to Myanmar - DICA

Ooredoo said to mull reducing stake in $4b Myanmar arm

24

DHL scales up operations in Myanmar with new warehouse

Ayala buys into Pun’s listed companies for $238M


Yoma Strategic to buy 10% additional stake in Myanmar’s Wave Money

SGX-listed Yoma Strategic Holdings (YSH) hasagreed to acquire an additional 10 per cent stakein Digital Money Myanmar (Wave Money) fromYangon-listed First Myanmar Investment (FMI)for $6 million.The transaction will comprise 100,000 ordinaryshares and 3.5 million redeemable preferenceshares, YSH said in a statement. Theconsideration of $6 million was based on a totalequity value of Wave Money at $59.92 million.The transaction value will not exceed $10 millionin case a third-party investor acquires an interestin Wave Money at a higher valuation within 12months, it added.Wave Money, licensed under Myanmar’s MobileFinancial Services Regulations, is 51 per centowned by Telenor. YSH had increased its stake to34 per cent last year after buying shares from FMIfor a $19.4 million. Yoma Bank holds another 5per cent.“The proposed acquisition will strengthen thecompany’s financial services pillar since WaveMoney has a proven track record of beingprofitable and is fast growing,” YSH said.

According to the company, Wave Money is thelargest mobile payment services provider inMyanmar. Wave Money’s CEO, Brad Jones, toldthe Nikkei Asia Review recently that transactionsvia its platform exceeded 2 trillion kyat ($1.3billion) for the first time in 2018, and would likelyreach up to $5 billion by the end of 2019.The acquisition will be funded by proceedsgenerated from the disposal of certain non-coreassets, YSH added.The company also disclosed it will sell a 12.5 percent stake in telecom towers company edotcoSingapore to Sojitz Corp for $57.5 million,compared to a book value of the shares at $54.49million by 30 June 2019.The announced transactions are “in line with itslong-term strategy of growing its core businesses,while actively working to dispose of certain non-core assets to strengthen its balance sheet,” theMyanmar-focused investment firm said.

Source: Deal Street Asiahttps://www.dealstreetasia.com/stories/yoma-strategic-wave-money-161799/

NewspapersDeal Street Asia

11 Nov 2019


Thai businesses considering moving to Myanmar -DICA

While labour wages are rising in Thailand, someof its enterprises are discussing moving theirbusinesses to Myanmar, according to U Thant SinLwin, Director-General of the Directorate ofInvestment and Company Administration (DICA),state media reported.“At present, Thailand investors are enteringMyanmar as cheap labour wages are attractingthem,” he said. “As labour wages in Thailand haverisen, the kingdom’s business firms areconsidering moving their businesses toMyanmar,” U Thant Sin Lwin, was quoted assaying.The businesses are engaged in manufacturingLEDs, auto parts and accessories, among otherthings.Last October, Thailand-based Amata Group’sYangon Amata Smart and Eco City Ltd wasawarded the contract to develop and operate asmart and eco city on 2,000 acres of land nearLaydaunkkan, near East and South Dagontownships, with investments of US$274.680million, according to DICA.

Source: Mizzimahttp://mizzima.com/article/thai-businesses-considering-moving-myanmar-dica

NewspapersMizzima

13 Nov 2019


Ooredoo said to mull reducing stake in $4b Myanmar arm

Qatari carrier Ooredoo QPSC is consideringreducing its stake in its Myanmar unit amid fiercecompetition in one of the world’s newest mobile-phone markets, people familiar with the mattersaid.Ooredoo has been gauging interest from potentialinvestors including state-owned ChinaTelecommunications Corp. about taking a stake inits Myanmar business, according to the people. Adeal could value the unit at as much as $4 billion,the people said, asking not to be identifiedbecause the information is private.A transaction could involve a partner investing inOoredoo’s Myanmar business in return for a stakeof around 40%, the people said. Ooredoo wouldlower its exposure to a country where it facessteep price competition from Mytel SA, a newplayer backed by Vietnam’s Viettel GlobalInvestment JSC, and Norway’s Telenor ASA.Ooredoo has been seeking cash to fund next-generation network rollouts in other markets,according to the people. No final decisions havebeen made, and talks could still fall apart, thepeople said. Other investors for Ooredoo’s

Myanmar unit may still emerge, they said.A representative for Ooredoo declined tocomment. China Telecom Group “currently has noplan” to acquire enterprises in Myanmar,according to a representative for its listed unitChina Telecom Corp. The representative wouldn’tcomment on any potential minority stake investment.Ooredoo Myanmar’s revenue in the first ninemonths of the year dropped 19% to 807 millionriyals ($220 million) due to price competition andlocal currency depreciation, according to itswebsite. Earnings before interest, tax,depreciation and amortization for the period rose30% to 226 million riyals and its customer basereached 10 million customers at the end ofSeptember.Ooredoo has been in Myanmar since 2013, whenthe country opened up its telecommunicationsindustry.

Source: Deal Street Asiahttps://www.dealstreetasia.com/stories/ooredoo-myanmar-162624/

NewspapersDeal Street Asia

14 Nov 2019


DHL scales up operations in Myanmar with new warehouse

DHL Supply Chain, one of the global marketleaders for contract logistics solutions, announcedthe opening of its first multi-user warehouse inMyanmar, last week.The company has invested approximately K1.58billion (€1 million) in the facility located in DagonSeikkan Industrial Zone in Yangon, and istargeting to add more than 200 full-timeemployees to its team by 2021.“Our investment in Myanmar showcases ourcommitment to ensure that we are consistentlyoffering the best end-to-end logistics solutions tocustomers in the region, to help them capitaliweon growth opportunities. Over the years, we havewitnessed tremendous growth in Indo-Chinaincluding Myanmar, and have scaled our offeringsaccordingly to meet our customers’ needs. Today,our customers can count on us to provide a fullsuite of integrated end-to-end supply chainsolutions, pegged to the highest global standardsof excellence,” said Kevin Burrell, CEO DHLSupply Chain, Thailand Cluster (Thailand,Vietnam, Myanmar and Cambodia).The warehouse caters to the needs of the

expanding local customer base, mostly from theconsumer and technology sectors.“Our experience and expertise in supply chainmanagement globally combined with our deepunderstanding of the local business environmentand its distinct culture provide the perfectplatform for us to build intimate knowledge of ourcustomers’ requirements and optimize ouroperations in Myanmar,” said ShisanupongPitidhanyasawasdi, Country Manager, DHLSupply Chain Myanmar.DHL first entered Myanmar back in 1982 with itsExpress division and has expanded its portfolio toinclude the full range of logistics solutions,powered by its Supply Chain and GlobalForwarding divisions. DHL Supply Chain remainsthe only 100 per cent foreign-owned logisticscompany to have acquired an investment permitfrom the Myanmar Investment Commission.

Source: Myanmar Timeshttps://www.mmtimes.com/news/dhl-scales-operations-myanmar-new-warehouse.html


13 Nov 2019


Ayala buys into Pun’s listed companies for $238M

Philippine conglomerate Ayala Corporation willtake 20 percent stakes in two of Serge Pun’s listedcompanies for a total of US$238 million, makingthe Myanmar tycoon the first to benefit fromrecent market liberalisation allowing significantforeign ownership of listed holdings.Ayala, with investments in real estate,telecommunications, energy and infrastructure,will acquire stakes in Singapore-listed YomaStrategic Holdings and Yangon-listed FirstMyanmar Investment, becoming the second-largest shareholder in both.The deal, announced on Thursday, will be worth$238 million in total and values the twocompanies at about $1 billion combined. Bothsides said it was the Philippines’ biggest privateinvestment in Myanmar.The deal involves share issues of S$0.45(US$0.33) per share by Yoma Strategic andK15,000 (US$9.90) by FMI, representing apremium of 37.7pc and 36.5pc over the averagetraded price on November 12 and 13 respectively.Ayala president and chief operating officerFernando Zobel de Ayala will sit on the boards of

the two companies.“This partnership reflects Ayala’s faith in thefuture of Myanmar and validates the YomaGroup’s business model in the country,” said MrPun, who chairs both Yoma Strategic and FMI.The Philippine conglomerate’s chair and CEOJaime Augusto Zobel de Ayala said the investment“gives Ayala a unique opportunity to participate inMyanmar’s growth story.”The deal represents the first major foreigninvestment in a company listed on the YangonStock Exchange since Myanmar’s securitiescommission announced in July that non-Myanmar individuals and entities would bepermitted to acquire up to 35pc of listed firms.Ayala will provide a $82.5 million convertibleloan to FMI allowing it to take an equity holdingof up to 20pc.FMI chief operating officer Tun Tun said the pairare “looking towards” converting the loan intoequity “within the shortest practical time period.”Source: Myanmar Timeshttps://www.mmtimes.com/news/ayala-buys-puns-listed-companies-238m.html


15 Nov 2019

PwC | November 2019

3. Weekly New Tenders

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PwC | November 2019

No applicable Tenders announced for the week ending 16 Nov 2019.

Tenders (Myanmar)List

Note: tenders information are collected from http://www.mmtimes.com/, https://tender.yangon.gove.mm, http://consult-myanmar.com/, and http://www.myanmar-opportunities.org/mm/tenders http://www.buildersguide.com.mm/en/ .

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http://www.mmtimes.com/

https://tender.yangon.gove.mm/

http://consult-myanmar.com/

http://www.myanmar-opportunities.org/mm/tenders

http://www.buildersguide.com.mm/en/

PwC | November 2019

Tenders (Multilateral organizations) List

Note: tenders information are collected from https://wbgeconsult2.worldbank.org, www.devex.com, www.adb.org, https://www.ungm.org

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ADB: TA-9600 REG: Regional Clean Energy Specialist - RCES 3 Regional Coordinator TRM (52096-001), Closing date: 21 Nov 2019

ADB: TA-9074 MYA: International Social Safeguard Adviser - Expert on Social Safeguard (49297-001), Closing date: 20 Nov 2019

ADB: LOAN 46422-003 MYA: Greater Mekong Subregion East–West Economic Corridor Eindu to Kawkareik Road Improvement Project - EK-CS2 External Monitoring Expert for Social Safeguards –International, Closing date: 27 Nov 2019

ADB: TA-9600 REG: Southeast Asia Energy Sector Development, Investment Planning and Capacity Building Facility - Distribution Automation Expert - AREP (52096-001), Closing date: 22 Nov 2019

https://wbgeconsult2.worldbank.org/

http://www.devex.com/

http://www.adb.org/

https://www.ungm.org/

PwC | November 2019

4. MIC Permitted Projects

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PwC | November 2019

MIC Permitted Projects (Meeting 17, 2019)

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No. Name of Company Type of Investment Form of Investment

1 Gold Delta Company LimitedContract Farming, Milling and Sales of White Rice and Rice Products; Providing Agricultural Services

Wholly Myanmar-owned

2 Yangon Amata Smart and Eco City LimitedDevelopment and Operation of Smart andEco City and Related Business

Joint Venture

3 ShweGon Development Group Co., Ltd.Construction, Leasing and Management ofResidential, Serviced Apartment, Officeand Commercial Complex

Wholly Myanmar-owned

Source: DICA

PwC | November 2019

5. Upcoming Events

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PwC | November 2019

Upcoming Events (November 2019) List

Date Location Name of Event Sector Price Focus Points

28-30 Nov Yangon MyanbuildBuilding and Construction

TBC

“Myanbuild is an international building andconstruction industry exhibition andconference which showcases a wide range ofindustry-related products and services fromvarious international brands. The event alsoprovides the attendees with a comprehensiveplatform to showcase construction brands inthe Myanmar market.”

28-30 Nov Yangon MyanwaterWater &Wastewater

TBC

“Myanwater event is an international waterand wastewater technology show whichdiscusses various technologies relating towater and wastewater management. “

28 -30 Nov Yangon

GREENPOWER MYANMAR -International Solar and Renewable Energy Industry Exhibition

Power andEnergy

TBC

“In the business of building up Myanmar’sElectrical and Power sector, GREENPOWERExpo aims to meet the increasing demand byintroducing a greater variety of products andservices that will help boost the industrythrough new and promising businesspartnerships and enterprises.”

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Note: Events information are collected from https://www.go-myanmar.com/events-and-conferences and https://10times.com/myanmar .

https://www.go-myanmar.com/events-and-conferences

https://10times.com/myanmar

PwC | November 2019

Upcoming Events (November 2019) List (cont’d)


28-30 Nov Yangon MyanenergyPower and Energy

TBC

“Myanenergy event is an international powerand electrical engineering show whichprovides the attendees with the mostcomprehensive platform to showcase theirbusiness to the Myanmar market.”

29 Nov- 01 Dec YangonElectricity & Energy Expo

Power andEnergy

TBC

“Electricity & Energy is the largest andlongest running regional electricity & energyconference and exhibition in South EastAsia, making it a well-known and trustedbrand. The event boasts both a strategicconference and a large trade exhibition.”

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PwC | November 2019

Upcoming Events (December 2019) List


02-03 Dec Yangon

Asia IoT Business Platform (AIBP Myanmar)

IT andTechnology

1,200 USD

“The Asia IoT Business Platform Myanmaraims to address key issues facing theadoption of Internet of Things technology inASEAN. It focuses on localtelecommunication companies, governmentbodies, and verticals. Please Register toattend via the official event site.”

05-07 Dec Yangon Agrilivestock MyanmarAgriculture and Forestry

TBC

“Agrilivestock Myanmar serve as Myanmar’spremier international B2B platform forshowcasing a variety of the latest productsand solutions for the improving the locallivestock sector. It is also a great opportunityfor overseas companies to meet, network andform mutually beneficial relationships withlocal industry professionals and keydecision-makers.”

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© 2019 PricewaterhouseCoopers Myanmar Co Ltd. All rights reserved. In this document, “PwC” refers to PricewaterhouseCoopers Myanmar Co Ltd, which is part of the network of member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity.

www.pwc.com/mm

PwC Myanmar Weekly Business Intelligence Publication

For further information please contact:

Mark RathbonePwC Capital Projects and Infrastructure Leader, Asia+65 6236 [email protected]

Jennifer TayPartnerCapital Projects & Infrastructure, PwC Singapore +65 8876 [email protected]

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