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Myanmar Business Today is Myanmar’s first and the only bilingual (English-Myanmar) business newspaper, distributed in both Myanmar and Thailand. MBT covers a range of news encompassing local business stories, special reports and in-depth analysis focusing on Myanmar’s nascent economy, investment and finance, business opportunities, foreign trade, property and real estate, automobile, among others. MBT also provides detailed coverage of regional (ASEAN) and international business stories. For more information please visit www.mmbiztoday.com.
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Myanmar Business Today is Myanmar’s first and the only bilingual (English-Myanmar) business newspaper, distributed in both Myanmar and Thailand. MBT covers a range of news encompassing local business stories, special reports and in-depth analysis focusing on Myanmar’s nascent economy, investment and finance, business opportunities, foreign trade, property and real estate, automobile, among others. MBT also provides detailed coverage of regional (ASEAN) and international business stories. For more information please visit www.mmbiztoday.com.
Facebook: www.facebook.com/MyanmarBusinessToday Twitter: @mmbiztoday
Google Plus: https://plus.google.com/107379179269023670071/posts
Linkedin: http://www.linkedin.com/company/myanmar-business-today
Myanmar Business Today is Myanmar’s first and the only bilingual (English-Myanmar) business newspaper, distributed in both Myanmar and Thailand. MBT covers a range of news encompassing local business stories, special reports and in-depth analysis focusing on Myanmar’s nascent economy, investment and finance, business opportunities, foreign trade, property and real estate, automobile, among others. MBT also provides detailed coverage of regional (ASEAN) and international business stories. For more information please visit www.mmbiztoday.com.
Facebook: www.facebook.com/MyanmarBusinessToday Twitter: @mmbiztoday
Google Plus: https://plus.google.com/107379179269023670071/posts
Linkedin: http://www.linkedin.com/company/myanmar-business-today
mmbiztoday.com mmbiztoday.com June 26-July 2, 2014| Vol 2, Issue 25 MYANMARS FIRST BILINGUAL BUSINESS JOURNAL Myanmar Summary Myanmar Summary Contd. P 9...(IMF) Contd. P 9...(IMF) Inside MBT IMI Lps GP Iorecust to S.gpc espite Inutionury Pressore Prescribes broad-based policy reforms and better economic management Tom Stayner T he International Monetary Fund (IMF) has revised its forecast for Myanmars economic outlook for this hscuI yeur, predIcLIng LIe countrys rapid economic expansion to continue despILe InuLIonury pres- sures. The Paris-based lender said Myanmars economic expansion will reach 8.5 percent this year, after gross domestic produc- tion (GDP) rose to 8.25 percent over the 2013-14 hscuI yeur LIuL ended In March. In January, the IMF predicted Myanmars eco- nomic growth rate would steady at 7.7 percent by March 2015. IMF Resident Repre- senLuLIve In Myunmur, Yu Ching Wong said increas- es in gas and agricultural production have helped Myanmar build on the countrys economic mo- mentum. A Iow Lo medIum growth average of 7-8 percent is sustainable for a developing country if they can maintain their economic stability and manage macroeconomic poIIcy Lo conLroI InuLIon- ury pressures, Yu CI- ing Wong told Myanmar Business Today. M suId InuLIon Is ex- pected to remain at 6.5 percenL wIIIe cupILuI ow from foreign investments and local production con- tinues to increase. However, LIe M`s Myanmar mission chief, Matt Davies, warned that without proper economic management Myanmars favorable economic out- look could be undercut. IscuI und exLernuI buers remuIn LIIn und demand-side pressures on InuLIon und Iurge cupILuI Inows wIII sLruIn the still-infant macro- economic management LooIs, DuvIes suId. ~_ ._ _ ._ . q:. ._ ~. q,..~e~._. (IMF) . , .~ -_ ., .:. . .. :..q. ~..' e._:.q...~~~ ., . , ..~ ~:. _., ._ . ... . _.. .-...:..q.e_e..._ .._~..e:....:.q.,..: ._ . .~ .~ ~ .~~ . ._~:. .,.,.:.._. Aothorities to Spend $,6o,ooo to Re-embunk Inle Luke May Soe San I nIe uke wIII see a K750 million ($767,000) renova- tion to its embankment and shores this year thanks to a grant from the Shan State government. The regional govern- ment received K1.5 billion ($1.5 million) from fees collected over the past year from the visitors to the lake. U Win Myint, Inntha Ethnic Minister of Shan SLuLe, suId, TIe money will be granted to a tender winner [who will carry out the project]. The State Finance Ministry will dis- burse the fund in four- monLI InsLuIImenLs. In the past the military collected the foreign en- try fee charged to visit the lake but locals were unaware of how much money was being used Ior LIe sLuLe. However, new HIuLLuw represenLu- tives elected in 2011 have established controls over the proceeds. To increase revenue from the lake the price per foreign entry visit, for the almost 150,000 peo- ple who visit the lake each year, was doubled from $5 (K5,000) to $10 in last October. TIe Iuke Ius suered from recent deforestation with silt deposits and un- conLroIIed gurbuge Inow forming deposits in the lake. ~ ....~, .~ ~, .~ e _e . ~ .~~ .q.~~ ~ .:....._ ~..,. ~ ~:. ..... ~.,_e e. . . ~~ .~ .~ . ..:.._..:.,q_._._..~ ~. ._.q, . . :.._~:. q . . _._ ,e ~. .q~e ~ .~ .q . .:..q.q:~,_~. .~._.~ .. ~ ._.:._. ~~,~~, . . . ~ ~ .... ~,. .:.q:~._ ._.:. .:.-_ ._ .:. . .~:~ e qq._ .~.~..e.qq ._~,~. ~..,. ~ ~ ~ ....~, e _e ..q.~~ ~ ~.._.q, ._..~.:.... ._ _e. ._~: . q . ._._ ,e ~. .q ~e. .q._. ~ ....~, -.q.~.q. ...~ .. .~:_.,.~...:. ._~: ~, ~~ .. .. .. .:. .:_..~_.~._~..,....:. .:._ _ ..,:.:.. q. .,q._ . A man pushes a cart past shipping containers stacked at a shipping terminal in Yangon. Myanmars GDP will grow 8.5 percent this year, the IMF said. D a r io
P ig n a t e lli/ B lo o m b e r g Government to Impose Property Tax to ConLroI und PrIces P-q DruIL Compuny IsLIng RequIremenLs Ior TIe Yungon SLock ExcIunge ReveuIed P-6 Export Strategy Draft Complete, Awaits Parliamentary Approval P-7 June 26-July 2, 2014 Myanmar Business Today mmbiztoday.com 2 LOCAL BIZ MYANMARS FIRST BILINGUAL BUSINESS JOURNAL Board of Editors Editor-in-Chief - Sherpa Hossainy Email - sherpa.hossainy@gmail.com Ph - 09 42 110 8150 Deputy Editor - Aundrea Montao Email - aundrea.montano@gmail.com Editor-in-Charge - Wai Linn Kyaw Email - linnkhant18@gmail.com Ph - 09 40 157 9090 Regional Editor - Tom Stayner International Editor - David Ross Reporters & Contributors Htun Htun Minn, May Soe San, Kyaw Min, Wai Linn Kyaw, Aye Myat, Aung Phyo, Zwe Wai, Phyo Thu, David Mayes, Sherpa Hossainy, Aundrea Montao, Tom Stayner, David Ross Art & Design Zarni Min Naing (Circle) Email - zarni.circle@gmail.com Ph - 09 7310 5793 Ko Naing Email - nzlinn.13@gmail.com Ph - 09 730 38114 DTP May Su Hlaing Translators Wai Linn Kyaw, Phyu Maung, Bone Pyae Sone, Aye Chan Wynn Advertising Seint Seint Aye, Moe Hsann Pann, Htet Wai Yan, Zin Wai Oo, Nay Lin Htike Advertising Hotline - 09 420 237 625, 09 4211 567 05, 09 31 450 345, 09 250 411 911, 09 2500 18646 Email - sales.mbtweekly@gmail.com Managing Director Prasert Lekavanichkajorn pkajorn@hotmail.com 09421149720 Publisher U Myo Oo (04622) No. 1A-3, Myintha 11 th Street, South Okkalapa Township, Yangon. Tel: 951-850 0763, Fax: 951-8603288 ext: 007 Shwe Naing Ngan Printing (04193) Printing Subscription & Circulation Aung Khin Sint - aksint2008@gmail.com 09 20 435 59 Nilar Myint - manilarmyint76@gmail.com 09 4210 855 11 Khaing Zaw Hnin - snowkz34@gmail.com 09 4211 30133 Bosiness News in BrieI Govt i nvi tes consultants to help desi gn new postal ser vi ces The Ministry of Communications and I nformation Technology has invited Expressions of I nterest (EoI ) Irom IocuI und IoreIgn hrms Lo provIde consuILuncy Ior designing a new postal service policy and drafting a new postal law, the ministry said in an announcement. The EoI should be sent to the ministry by J une 30. CI MB bulli sh about Myanmar banki ng li cence CMB Group Is goIng Lo do wIuLever we cun In LryIng to get a licence in Myanmar, Nazir Razak, group chief executive of CI MB Group, told Thai media. Myanmar is expected to grant as many as 10 licences to foreign banks to operate their branches in the country. CI MB Ius operuLed ILs represenLuLIve om ce In Myunmur Ior 17 years. Razak said the bank is also eyeing presence in every market in the ASEAN region by 2015 and looks to expand beyond the region into Australia and China. TIe bunk Is expecLed Lo open ILs hrsL bruncI In uos by August and hopes to get a licence to operate in Vietnam this year. Yangon stops i ssui ng taxi li cences due to heavy tro c TIe Yungon RegIon governmenL Ius sLopped IssuIng LuxI IIcences becuuse oI worsenIng Lrum c congesLIon In the commercial city, local media reported the Regional Transport Minister as saying. There are about 80,000 LuxIs runnIng In Yungon, IncIudIng qo,ooo cILy LuxIs registered with the local authority. Myanmar to adopt new monetar y poli cy to stohilise inotion The government will introduce a new monetary policy Lo sLubIIIse LIe rIsIng InuLIon In LIe counLry, CenLruI Bank Deputy Governor Khin Saw Oo said while speak- Ing In LIe Upper House. SIe suId LIe InuLIon ruLe Iud risen to 5.76 percent in April 2014, from 5.53 percent and 1.48 percent respectively in the same month in 2013 and 2012. The monetary policy will include allo- cating the government budget with World Banks as- sIsLunce und seIIIng suvIngs cerLIhcuLes LIrougI prIvuLe banks, she explained. Myanmar i nvi tes tender s to bui ld Thi lawa por ts The Myanmar Ports Authority has announced eight construction tenders to construct a general cargo port and a container loading dock using J apanese develop- ment aid. The port will be part of the Thilawa Special EconomIc Zone, un IndusLrIuI compIex souLI oI Yun- gon, and building is due to start this year. The Ministry of Transport has received $205 million loan from J a- pan to enlarge the Thilawa port. Canadi an mi ni ng company to be sued i n My- anmar JusLIce TrusL und LIe Myunmur uwyers NeLwork wIII hIe u IuwsuIL uguInsL CunudIun mIner vunIoe MInes, wIIcI IuuncIed LIe conLroversIuI eLpuduung Copper Mine in northwestern Myanmar, local media reported. The company broke the law and it did not meet interna- tional standards when it was running the project, Thein Than Oo of Network was quoted as saying. I vanhoe has been under intense scrutiny by Canadian civil society groups for more than 15 years, following widespread allegations that it has been complicit in human rights violations and environmental degradation in several of the worlds most impoverished nations. Mining Watch Canada detailed allegations of I vanhoes misconduct In Myunmur In LIe reporL Gruve DIggers, wIIcI wus published in 2000. Govt banks to pay forei gn exchange li cence fee State-owned banks will have to pay foreign exchange IIcence Iees eecLIve JuIy In IIne wILI uII prIvuLe bunks, local media reported, referring to central bank sources. The central bank has imposed this requirement to cre- uLe u IeveI pIuyIng heId beIore uIIowIng IoreIgn bunks` operations later this year. Myanmar Summary _.,.:.~.e.q..~.~.~~.~.,_.._:~,_~._:, ._ _._~. _._.. ~..~..:.~:. .:~~~,..:. ..,.~:. .~..q..q,~~~ e~..':.._~:. .q._. ....q:... CIMB ~..,.~..._ :._e._e. ~,.~:~...._e ._~.._~:._e _.,.:.~ ~ ..,...qqq, _~..:..,._~:. .q._. _.,.:.._ _._.~ ~~ .~:. ~..,..:...~ .q, ...:....._...,:~ CIMB ~..._._. ~ ..,...qqq, _~..:..,_.._e.._. ~..q.~.:.. ~_.:...~.~.:.._ ._.:.. ._~...e...._~..:.~ ~..~~......:q.~: .__e.._. q,~,~...._~.~..q._ q,~,_.~~. ..q:..:_e...'.,._ e:._~:.~...:.~ ._eq..q, ~~~ ...:...._..~:. q....~:._e .q._. q,~,_.~ Taxi ~,~~~ ., ._....~q_.. ,~,~~~ .: City Taxi ~_e. .~.~:._~._. _.,.:~..q._ .._~..e:...~ ~__...q,~~~ . ._~...'..~..~ _._:,.q,...,._e .q._. _.,.: ..~..~:~:..:.._ ..~|..~..~ ~..~,~ ~,...,..:.....:.._ ..~.. .~_..:~q, ~.|..'e.._~:. .q._. June 26-July 2, 2014 Myanmar Business Today mmbiztoday.com 3 June 26-July 2, 2014 Myanmar Business Today mmbiztoday.com LOCAL BIZ 4 Myanmar Summary Government to Impose 'Property Tux' to Control Lund Prices T he Myanmar Gov- ernment along with the regions and states is set to im- pose a new property tax to curb skyrocketing land prices, a minister said. The current property taxation system works through a levy collected on all residents living on land or in a building ac- cording to a residents location and income. Re- gional and State govern- ments currently levy the tax for use in regional de- velopments. When a property chang- es hands in Myanmar, ownership must be reg- istered with the Urban und und MunugemenL Department and tax paid to the City Development CommILLee. However, some real-estate agencies do not make legal con- tracts, instead they buy lands with general power or special power which allow for sale without contract the resulting failure to collect tax fur- LIer InuLIng Iund vuIues. Some busInessmen bought lots of lands. So, we will study the inter- national taxation system and techniques to control those who trade lands and manipulate the land prIce, U Soe Muung, Un- ion Minister for the Presi- denL`s Omce, suId. We wIII ImpIemenL LIIs system in discussion with regional and state par- liament members, busi- nessmen and authorities from relevant regions and Htun Htun Min & Phyo Thu sLuLes, Ie udded. Reforms to the 2012 urmIund uw IuIIed Lo address this problem, uddIng LuxuLIon Lo: seII- ing, renting, pawning, ex- changing and transferring of farmland. But did not include the collection of tax on property sales. To control land prices, government set the land price per foot in 2013. Prices for downtown LownsIIps In Yungon reached K150,000 ($150) to K300,000 ($300), but actual prices are much higher, more than dou- ble in some rural areas of Yungon. The Department of In- ternal Revenues plans to revise land price per foot In LIe Yungon ureu Lo brIng omcIuI Iund prIces In IIne with current prices and halt speculative buying. However, Dr Nyo Nyo Thin, former professor of law and parliament mem- ber, cautioned against government intervention saying price hikes could not be avoided through simple law enforcement. We need Lo enucL suIL- able laws and also watch by forming the relevant commILLees. Ie suId. L Is noL eusy Lo Luke Im- mediate control over the land price. To control the land prices, the govern- ment must explore more vIrgIn und vucunL sILes, Duw YI YI MyIn, econo- mIsL uL Yungon nsLILuLe of Economics, said. Now, LIe eusIesL wuy Lo muke u prohL Is LIrougI real estate. This is due to LIe Iuck oI u sLrong hnun- cIuI murkeL, sIe udded. The rise in the price of land has caused increases _., .:. ~ . ._.e:.... , . .:._~ ._. .,. ~ , ... q, ~~~ _._,e. ~.... _ ~ ....~. ~ ~ ~ _ ..: . . . ~. , (Property Tax)'' ~.,.~:~.,.~ .e:..: .... :.._ _e. _. . ..._.q, . ~. .|~_:.q.~, _~ ._:, . ..:,~.:.._e ..~ , .~, _~ ._:,_._ .: . ~, _~ . .. ...: ~ .~ q ~ ...,..: . ~ .~: ~._ .~.~.~ ._.: _~:..~._. . . . ~. , (Property Tax) .._.: ~..:~~~ ._. . ~..:~~~~- ... ~,e.~..' .~.~q:..,. _e .~:~ . ._ ~. , _e. _ . . . ~. , ~ ...~. .q.:. . .~:~._.. ...~.e_e. .q.. . , .. :.~ ~. ._. ._~:. ~,_~.~ ._.:._. _., .:. ~ . . . ~. , ~ ._. ~..:~ ~~ . ...~ . ., . ~:.. .~..'.~:~ . q._ ~..~.:._e._ ... ~. ~ q:_e~ ~e .:.-~, e . .~ . ~ . ~ _ e _ ._ . .:. ~. .. -~ . ..'. , ._ . . ~.:._._ . .:. .....: . ._~.,.,.:._e .~:~. .~~: ..:.~..~., _e .,.q.. ~. .~ ~~ ~ ._. ~.~..:~~~~ ~._~. ~. .|~e e . . .~ .~ _ . . _. ..~ ~_e. ~. , ~, . ~, . . ,_.,_._e ~.,..:.q, .~.~...:.._. ...: ._. ._.~~,._~..~. .q: .~e .,. .:.~~ ~ ~. , .,._e...: ,~ q:..,.. ~..,._._~..~:~._.. _e , ._ ..: q ~ .~ q ._ e ,.~ .~._.:._. . .:.~. .~.,_ e ._.~~ ._ ..: ~e e . . . q ._ e _.,.:.~ ..._._:,. :..~.q._~~~ .q ._~.q .:. .. ..:~ e ~. .:.~. ._~.~ ~ ~..:~ q_. . ~e.q:._ ...:.~ ._. ~ ~ .:.~ ~ , .. _ ..e e ~~ .~_.~ ~~ ~ ~e e q .. . _. . . _. ....~.:._. .~ ._~: ._.e:....:.._ .~_._. _ e. _ . . .. .. , .. :.~..~, _.~~.:q._e ~,_~.~ ._.:._. ._ .e:.~ ~ ~. :.~_ .:. _ ~ .~e :.~e . ._ .~ ~ , ._ ~....q:.~e ._.... ...~.:..,. .~ ~~ ~ . ~~:~ . . . ~. , .~:~ . ~ ,_..,..~~ ...:.e. _ ._ ,e . ~ ...._~ .. ~ .~: ~ e .:.. e .~ ... ~. ~ . . , .q _ ~ ..~ , _._ ,e . ~ ....~. .q~e ~.~ ......_.. ..,.~ ..:q~.:..:_e..|~e''e ,.~ .~._.:._. ~ . _. ._.e:.:.~ ~q:.~ . ~ . ~ .:. . .:~. ._ e ~ee_.. _._...~,.. ._... .,.._:,~ ._.~._._.:. _. . ~. , _:,~ ~ . . , ~._ ._.:._...:. ..:q~.|~ _. .~: ._ . .:e:.q..~: .~ . ._..,~..,.:.~ ._._~. .~:~.._. in the price of goods due to high investment costs for local and foreign manu- IucLurers, dImcuILIes Ior foreign investment owing to the high prices of land, und dImcuILIes Ior IocuIs In owning or possessing land, member of the Parliament Phyo Min Thein said. To control the land prices, government set the land price per foot in 2013. Prices for downtown townships in Yangon reached K150,000 ($150) to K300,000 ($300), but actual prices are much higher, more than double in some rural areas of Yangon. W a i L in n
K y a w June 26-July 2, 2014 Myanmar Business Today mmbiztoday.com LOCAL BIZ 5 Luck oI Qoulity Stonts Locul Cement Indostry Myanmar Summary A s rapid infrastruc- ture development continues to in- crease the demand for cement, builders are pri- marily utilising imported cement due to the low quality of domestically produced cement, indus- try insiders say. When compared to im- ported cement, locally manufactured cement is lower in terms of quality but pricier because of the low volume of production, making it less desirable. This phenomenon is the result of sanctions that have caused Chinese ma- chines and spare parts to replace German machines in cement manufacturing factories, said U Ko Ko Thwe, owner of Taw Win ConsLrucLIon Co Ld. ucLorIes ure sLued with a plethora of un- skilled workers, who have little or no knowledge of cemenL. Hence, LIe quuI- ity of cement is unsafe Htun Htun Minn and there needs to be improvement in the man- agement and technical Iumun cupILuI, Ie LoId Myanmar Business To- day. YeL, LIIs IocuIIy mude cement is used in making bricks and building roads. I n 2012, Myanmar used about 4 million tonnes of cement. I ts predicted that In hve yeurs, LIe usuge oI cement will increase by 10 percent, Kan Trakul- hoon, CEO of Thailands largest cement producer Siam Cement Group, said earlier. Currently, there are three state-owned and 12 private cement factories, which have the capac- ity to produce 4.02 mil- lion tonnes of cement per year. Myanmar I nvest- ment Commission has given the go ahead to nine new cement factories to be constructed by 2015. As u resuIL oI LIIs de- velopment, cement pro- duction rate [is expected to] be up to 10.53 mil- IIon Lonnes, suId UnIon Minister for I ndustry U Maung Myint. WILI LIe boom In LIe construction sector, for- eign investors will play a major role in supply- ing the materials to ac- complish infrastructure projects such as building roads, harbours, hotels und SEZ consLrucLIon, he added. The minister said the in- vestors have to take into account the hazardous ef- fects on health and social welfare of the chemical smoke released from us- ing raw materials related to cement manufacturing. There also needs to be innovation so that the energy consumption rate und LIe udverse eecLs oI carbon production are re- duced, he added. SCG said it is going to establish a $388-million cement factory near Maw- lamyine, Mon state, while I ndonesias state-run Se- men I ndonesia said it will build a $200-million ce- ment factory this year. ocuI InvesLors ure uIso building cement factories in Mandalay region, and Mon, Kayin and Shan states. Myanmar imports ce- ment mainly from Thai- land and partly from I n- donesia, Malaysia and Bangladesh. Myanmar Summary Over o,ooo Ioreigners Visit Shwedugon in Muy A total of 30,436 foreigners visited Shwedagon pa- goda in May this year, according to the pagodas Board of Trustees. During the period, visitors from Thailand topped the table with 6,700 visitors, followed by the Chinese with about 3,000 and South Koreans with 2,200. On an average, 980 foreigners visited per day and the entrance fee for foreign visitors is $8 meaning a $240,000 in tourism receipts for Myanmar. I n April, over 31,000 tourists visited the pagoda, with 5,865 Thais visiting the top tourist attraction in the Southeast Asian country. Shwedagon Pagoda is a repository of the best in My- anmar heritage architecture, sculpture and arts. I t consists of hundreds of colourful temples, stupas and sLuLues LIuL reecL LIe urcIILecLuruI eru spunnIng uI- most 2,500 years. Aung Phyo e_e...~.._e.._. ~_ ~._.. ~..:~ ~~ . ~. . ~ _ . . : . . , . . ~.._e.._ _.,.:.~., _e ......_..~..~ _. .:..~ q q: e. ~. . . ~: . .~~ ~ .. ._ .~, . , ~~ .,.., . ~. ._ _e. ._~: . ..._...,.q. ..:~ . . .q.. . , .q .:.~ . ... ._. .~ q ~ .. ._..~ , ~.. .:. ~_..:~q, _...., _.. .:._ ~~ ...~~. e..~,.:.. ...~~~~. _e,_e..:..__e...:._. .~~.~_..:~q,q., .....:. . ~ , ..:.._~: e . ~ . .. ._.. ~. .~ _. .:. q_.._e.._~:. .q._. e .~_. _._ ~ .~ .. ._ ..~ ,. :.~~ ~ . . .. . . .~ . ..:~ . :.qq _ . . ._ ._ . ~.~ ~. ~. q. _e. ..'.,_.. e .~.~ ~. .:. ~~ ~ _., .:. . q: .. ._.. . , .q .:.~..~ e ._. q,q ._~:. .q._. Foreign cement rms have been rushing into Myanmar to take advantage of the huge gap that exists in terms of cement quality in the local industry. Thailands SCG said it is going to establish a $388-million cement factory near Mawlamyine, Mon state, while Indonesias state-run Semen Indonesia said it will build a $200-million cement factory this year. K e r e k
W o n g s a / R e u t e r s . , . ._ ...~~ . .q ~ ..~.~:.._.:..:..q. .:. -_._,~,,,' ..:.q:~ ._ .~ . ._~: . .q ~ ..~ _: .q.~e . . q._ . ~. .|~:.~~ . .:.q:~ ._.~.~....:.q:~ ._.~. '~~ ._e ~_. . .q . _. .~, ~ . . ,~~~. .~: ~ q.e:.. . ~~ .q.._. ._.:..:..q.._ .:.q:~ ._ .~ . ._ ~. ., . .. .. ~ .q . _. .~ ._~.. ~..q ~, ..' .:.~:~ . .q:~....|.~..q~,..'.: ,~,~~~ .~:qq .._~:. .q._. .q ~ ..~ .~: ._ _.,.:.-~.~:....q..e:.~.. ~..~..~_e..~.~_...:.q_..- . ~:.~ q:., .. . ,_ .. _:.~ q:.:.._~: .~: _~:._. ...~ . . . ~..:~ ~~ ~~~ .~: ~_ q ~:. , . ..:. . ..| .~~.~: ~~_ ..:~ :. _.. _e.._. June 26-July 2, 2014 Myanmar Business Today mmbiztoday.com LOCAL BIZ 6 Mobile Teum to Check Air und Seu Curgoes T he increase in My- anmars imports has presented the need to deploy mobile teams to inspect cargo ar- riving through the coun- trys air and waterways for illegal goods. Union Minister U Win Myint said authorities will organise mobile teams to inspect cargo being car- ried into Myanmar via the countrys air and water ways, to verify whether its legal or not. Usually, the Mobile Team examines goods being couriered across Myanmars borders in ve- hicles using the countrys motorways. Union Minister U Win MyInL Ius conhrmed u six-month test period has been arranged to sur- vey foreign goods, being imported across Myan- mars national boarders, through alternative trans- portation routes. Commerce and Trade DIrecLor U Ye TIn WIn said over 80 percent of Htun Htun Minn Myanmars overseas Lrude comes vIu IgIL or shipping carrier services. BoLI overseus und Io- cal cargo will have to be measured simultaneously Ior LIe pIun Lo succeed, U Ye TIn WIn suId. According to interna- tional rules, the transpor- tation checking process starts when cargo con- tainers are loaded from ships to ports in Myanmar vessels carrying foreign ugs ure noL IncIuded. Union of Myanmar Fed- eration of Chambers of Commerce and I ndustry (UMFCCI ) J oint Secre- Lury U Aye wIn suId LIe changes to Myanmars cargo management are needed to develop the countries industrial sec- tor. I we Iuve suIeguurded laws for our business- men, there is no way to hide and protect illegal goods, JoInL SecreLury U Aye wIn suId. Finance Union Minster Dr In Aung suId IuvIng more border gates would help Myanmar better deal with illegal imports com- ing into the country. TIe Yungon regIon op- erates seven international cargo ports checking the arrival of goods being transported into Myan- mar tax income has increased by 20 percent from these border gates. Commerce and Trade DIrecLor U Ye TIn WIn said adding water and air transportation routes to the countrys import checklists will increase state income, giving the counLry more hnuncIuI revenue to spend in other sectors. To cIeck IIIeguI Lrude through water route wILIIn zo1q-1 Y, IL Is arranged to purchase mo- bile X-ray machines hop- ing to get more believable resuILs, U Ye TIn WIn said. State trade reached $24.97 billion in the 2013- 1q hscuI yeur, IncreusIng from $18.4 billion in the prevIous hnuncIuI perIod. I llegal border trade has also dropped by over 20 percent in Myanmar over Myanmar Summary Containers at Asia World Port in Yangon. S h e r p a
H o s s a in y MobileTeam ~e . ..e: . .. :.:._e .e e . ..: .:..:~ , .. _..:.~ ~q:.~ .e e . ..: _. .q .q ... . ~_~ . .. .... :.._ _e. ._~: . . .. :..q.. ~ .., ..q: .~e .q. ~,_~._:, _._.:.~,_~. .~._.~ ._.:._. .~q~ _.,.:.~~. . ~ , ... .. ~. . ~ .q:~ .,..: ~ , .. _ . .:. ~ .: . ~ . .. ....,. .:...: q ~ .,._._.,.:.. ~.~ ~:._e q . .e q:. . , .., ~ .q:~ .,._ .q._~: .. ..._~: .. ~ , .. _ ..:.~ ~~.,~,.: ...... _... ..q.~~~ ~. ,._.:~. _~~....:q~:._.._e. ._~:. _._.:.~,_~.~ .._. ~, .~: ~ q ~. ~~ , . e . q ~ q:. . , .~ oversea . . ~,.~:~ oversea and air cargo .~: ~._.~_.... q.e ''e . .. :..q.. ~ .., . .q:.~e.q._:, ,_~:..q. .. .q~~.~ ._.:._. the past year, according to omcIuI duLu. ruIt Compuny Listing Reqoirements Ior The Yungon Stock Ixchunge Reveuled A t the Myanmar Business Forum hosted by KPMG recently, Shinsuke Goto, director of Daiwa Securi- ties Group I nc the com- pany providing technical assistance to the Myan- mar government to es- tablish the countrys stock exchange revealed the draft listing requirements for companies seeking to list their I PO when the exchange becomes opera- tional next year. Companies seeking to IIsL on LIe Yungon SLock ExcIunge (YSE) wIII be required to demonstrate prohLs Ior LIe prevIous two years or show K10 billion ($10 million) in market capitalisation, have a minimum capital amount of K500 million ($511,000), and have a minimum of 100 share- holders where the minor- ity must account for at least 10 percent of the to- Aundrea Montao tal equity. The corporate listing requirements are low in order to accommo- date smaller businesses, Shinsuke said. TIe YSE Is expecLed Lo be operational by October 2015; however, many an- alysts have doubts about the governments ability to establish policy and a sumcIenL reguIuLory en- vironment in such a short time frame. I n an attempt to increase assure the au- dience, Shinsuke Goto expressed IIs conhdence in the process and noted that the Securities and Exchange Commission (SEC) is expected to be formed by mid-J uly and SEC rules are expected to be revealed in the next couple months. I n addition to the for- mal listing requirements, much attention is being paid to the challenges companies face in prepar- ing to establish an I PO. Myunmur compunIes who are considering a listing on the exchange sIouId hrsL usk II un PO is the right choice and at the right time given their stage of development and prospecLs, suId YusuIIde Fujii, managing partner of KPMG in Myanmar. Companies preparing Lo IIsL on LIe YSE need Lo assess and institute in- ternationally recognised standards for accounting, InLernuI rIsk conLroI, h- nancial reporting, trans- parency and strategic planning. I nstituting strong cor- porate governance re- quIremenLs wIII be dIm- cult for many businesses deemed desirable for listing on the exchange. These companies face immense challenges in terms of human resource capacity, information technology, low govern- ment capacity, and lack of knowledge on behalf of the general public. Additionally, the estab- lishment of the ASEAN Economic Community (AEC) and regional capi- tal integration will chal- Ienge LIe YSE, IncreusIng competition for the nas- cent exchange. Companies with the greatest potential for list- Ing on LIe YSE wIII come from banking, agricul- ture, consumer products, infrastructure, construc- tion, manufacturing, and real estate sectors, said Fujii. Myanmar currently has an over the counter market (OTC) called the Myanmar Securities Ex- change Centre, which has two companies with tradable shares, and is ex- pected to be replaced by LIe YSE nexL yeur. While no announce- ment has been made if foreign companies will be uIIowed Lo IIsL on LIe YSE, much emphasis is being placed on readying local companies. Five companies are ex- pected to be listed when LIe YSE IuuncIes In OcLo- ber of 2015. Myanmar Summary Shinsuke Goto, director of Daiwa Securities Group Inc. K P M G .,. KPMG . .~| ~ . ~ ~ . ...: _ ~~ ~ _...._ _.,.:..~:~..,. . .~.~..:...:..q.eq. ~. . ~ ~ .. ._ ., .e q. ~ . . ..: .~ .:. ~ _.:. ._ ~ . ~ .:..:q .~ ._~_: .._. q, ~ , ..~: ~ . . , . ~ ~~ .~:~ ~ :.~ .~ . q, ., . , .:...: ._ . .:.q:~ . . ~ ._ ~ . ~ .:. ._ ~. .q-. .q.. . ..: .~ .:.. .~ .~ _. . ..e .:.q .,._ .. . .. . ,_ . .:..~._..._ ~.~.:. ~~ ~ ~, .. . ..: .~ .:. ~_.q,_..q:~ ~.~ ~..:.q.,._.q,~,..~: ~..,.~~~ .~:~ ~ : .~~ . ~ |.. _e .~ ..: q ~ ._ _e.._. June 26-July 2, 2014 Myanmar Business Today mmbiztoday.com 7 LOCAL BIZ Ixport Strutegy ruIt Complete, Awuits Purliumentury Approvul Myanmar Summary M yanmars long- awaited Na- tional Export Strategy (NES) has been drafted and is awaiting parliamentary approv- al, said Daw Thida Win HLuy, ussIsLunL dIrecLor oI the Department of Export Development. The drafting of the plan, which started in 2012, is a response to the need to in- crease exports by expand- ing market access for local producers and products, and will help Myanmars rapid growth continue to gain momentum, said TIIdu WIn HLuy. AII Iour sLeps oI LIe strategy have been fully drafted. Once we get con- hrmuLIon Irom LIe govern- ment we can implement LIe sLruLegy, sIe udded. Advisor to the Myanmar Beans, Pulses and Sesame Entrepreneurs Associa- tion, U Soe Win Myint, said the NES includes strategies targeting the countrys ag- riculture, rubber, textiles, tourism and marine prod- uct industries. BeIore LIe NES, beun and pulse exports were the main export sector. Once one NES is ap- proved, its going to be a challenge to break into the market and access the technology needed to re- muIn compeLILIve, U Soe Win Myint said. The German Federal Enterprise for Interna- tional Cooperation (GIZ) Phyo Thu provided technical assis- tance to authorities and local entrepreneurs draft- ing the NES. GIZ policy advisor, Dr TIn HLoo NuIng, suId us- ing international organi- sations other than GIZ in the future will help the NES manage export strat- egies more closely in each sector. TIere`s u secLIon wIere GIZ transfers its opera- tion to the International Trude CenLre, Dr TIn HLoo NuIng suId. The International Trade Centre has already be- gun implementing NES schemes targeting the travel and tourism indus- try in Kayah state. Secretary of Myanmar Rubber Plantation and Production Association, U Khaing Myint, said the quality, quantity and op- eration times of exports must be supervised for the national strategy to succeed. Once LIe governmenL approves the NES, there are many processes which need Lo be currIed ouL, Ie said. _._~.~~,.:.- ... ~~qq.q.. .~,~._. ~ . .q.~~ ~ ~. .q. ~e _._~.. .~,..,.q.:. ....|..q..:...: ~.. .:..e:- e:. ~,..~,.~ . .~: ~. .q~.,_e .:._ .~ ~ :.~~ . ~~_ _. . :.. ._ _e. ._~: . ~ , . e . _. ~ .q. .. ._:,. .~ .:~ , _~:..q.. ...'. ~: ~.._.~ ._.:._. . . ~ , ..q.. . ~. ... . . . .q.. _. .. :..|_. .~. .q q ~~__..~qe_...:.q . . ~ , .~~ . .~ ..: q ~ .:...:_e..|~e''e e.~ ._.:._. ~...:.-e:-e:.~,.. ~,. (NES) ~ ~~ .... .~.q..._.. .~,~_~ ~.:.~.:q..: _._~. ~ ~ , .:.~ e .. . ~ , .~ _ . .:.._~: . . q._ . NES ~ .q~~, .... .e e: ~ ~ , .. .~: ~ ~ , .q: :. ~~~ ~_ .:..|~~: _.,.:.- .q. .:...,.~._. _.. :.._. .~q~ _.....,_._e...: NES ~~~ ~..q _._~. . . , .q .:.~_. . . , . ..q....:.~~~ :., _., .:. ...| ...: q ~ .q.~e ~._. (GIZ) . ,_.._:.. ~~~_...:.._~:. .q ._. GIZ ~ .~ . ~_.:.. ~~:~e~._..~.| NES ~~~ ..~_.:eq.| ~e. Sector ~.~ ~... . ~ ..: q ~ . :.e q .|~e . GIZ ~., .~~:~,.e .-e_:, ITC ~ ..,... ~:~,.:.~~..._.q.| ~e''e GIZ . .~|..q.q: ~_~ .... . ..|~ ~:~ . .~ ._.:._. Iish Iood Prices Increuse us Chinu Imports More Ruw Muteriuls T he local Fish Food Producers Asso- ciation announced that it has decided to ImporL Iood Ior hsI und prawn rather than man- ufacturing locally, re- sponding to a hike in local prices. Increasing demand for hsI Iood ruw muLerIuIs from China has driven up LIe prIce oI hsI Iood over the past year. In June 2013, the price of one viss (1.6 kg) of sesame, which is used Lo muke hsI Iood, wus around K1,200-1,400 ($1.2-$1.4) but this year has increased to K1,450- 1,500 ($1.4-$1.5). CurrenLIy, LIe IocuI hsI- eries import sesame and bean from India, Argen- tina, Brazil and America Lo muke hsI Ioods. mporLIng IoreIgn hsI food will support Myan- mur`s dwIndIIng hsIery producLIon, suId Dr TIeL Hmuu, cIuIrperson oI LIe association. With weak government assistance, the number of entrepreneurs in the livestock industry has de- creased, directly impact- Ing LIe hsI Iood murkeL, he added. TIere ure muny reusons for the price hike. Trans- portation costs and the de- mand from China are part oI LIe reuson, suId u IIve- stock businessman. Since the new govern- ment came to power, the May Soe San ruLe oI hsI Iood ruw mu- terial exports to China Ius Increused sIgnIhcunL- ly, which has caused the price hikes, the entrepre- neur criticised. Myanmar Summary |... ._..q.. . , .~ ~.: .. .. , ._ . ~~ .~ q ._ ...e~ ...e~.:..,q:~ _ ._ .. .. .. , ..~ .:._ ~.:.:.~ _._ ~ .. ~ . . . :.._ _ e. ._ ~: . |. . . , ~.:~,_~..~...q:.. ..:.~... .q._. ~.:.... , ._. ~~ .~q ._ _._~.. ... ...e~ .,q:.:.~ _._.. ....,. .~.:._ ...e~ ...e~ .:.~ ~ . ._. ._e ~ . . . ..: ~.,._ |... ._..q. ..,..:.~~~ ~.:~ ~~_e..:.._~:. ~..| ~. .-~ _ ..|~ ~:.~ .. ~ ._.:._. .~q~ |.~.:~,_~.. ~..._ .~....:. .: ....,.~...~q..: ._ . . . .e~ .. .. , ..:.. : . .:. :_. ~~ .~ q .,_. . ~. ~~:._e . ~ . .. .:. ....,...:~q_...: ..._. .q...,...~..:...: ~ .:_ . . .. .~ ~ ~~ . ~.:~ , _~. . ~ ._ q:. .e~_..~._~:_e.._. .~q...e~....,..: _... ._ . .~ , .~~ .~ ~. . .: . ~~~~,~~ ~.q.q:. e...~,.~~. ~...: . ~,~~~~ ~.~ _.~~.,._. S o e
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T u n / R e u t e r s June 26-July 2, 2014 Myanmar Business Today mmbiztoday.com LOCAL BIZ 8 Airlines Resort to Overseus Ioel oe to Price ispurity Myanmar Summary A $1 per gallon dif- ference in the price of jet fuel between Myanmar and its neigh- bours is causing domestic and international airlines to increasingly look out- side for cheaper prices. The issue of fuel costs is considered to be a major issue in the competitive- ness of Myanmar domes- tic airlines. WIIIe yIng overseus, even to Thailand, one plane uses over 10,000 gallons of fuel. Domestic airplane fuel is a dollar more expensive than for- eign prices, which causes refuelling in Myanmar to cosL un exLru $1o,ooo, Mandalay Airlines Chair- mun U KIIn Muung uLL said. No busIness cun Ignore Phyu Thit Lwin this. Therefore, we refuel wIen we reucI TIuIIund, he said. Many airlines have pe- titioned the government to remedy this disparity in prices, with the govern- ment agreeing to address the income imbalance. In May, the Myanma Petroleum Products En- terprise (MPPE) invited foreign companies to form a joint venture to improve its jet fuel distri- bution system. The MPPE, which is re- sponsible for carrying out the retail and wholesale distribution of petroleum products under the Min- istry of Energy (MOE), currently distributes about 127 million litres of jet fuel a year at 11 air- ports around Myanmar, IncIudIng Yungon, Mun- dalay and Nay Pyi Taw. However, LIe Lender wus cuIIed Ior onIy Yungon n- ternational Airport. Border Trude with Neighboors rops Ixcept with Chinu Myanmar Summary B order trade between Myanmar and most of its neighbours has slowed, according to the Department of Com- merce and Consumer Af- fairs (DCCA). Director of DCCA U Tay Za Aung Win said, Border Lrude wILI CIInu remains normal but due to instabilities in other countries the trade has suered. Some ImporLs from Thailand have de- creased and trade has dwindled especially in Myuwuddy. During April-May, ex- ports through border crossings with Bangla- desh, China, India and Thailand increased by $116.97 million, while imports increased only $7.66 million compared with the same period last year, according to the DCCA. However, LIe rIse is attributed to only the growth in Myanmar-Chi- na border trade. The coup in Thailand recently caused trade to be restricted to daylight hours at border crossings between Myanmar and Htun Htun Min Thailand, causing a fall in exchange of $12.9 million compared to the same time last year. U MyInL wIn, dIrecLor of Department of Trade PoIIcy, suId, Trude wILI Thailand has now de- creased. We gained yearly increases in trade because of our easing of regula- tions, but have not in- creased the value of those commodities. I we don`L vuIue-udd our exports we will be in LroubIe, Ie suId. A border row with In- dia and also its recently- concluded general election have also caused a fall in trade between the two na- tions. Frequent road and bridge blockages have re- duced trade value by $8.02 million, DCCA data shows. Trade with Bangladesh, worth only $1.96 million over the April-May pe- riod, has also fallen from its high in 2012 due to se- curity and border issues between the two nations. In April and May, bor- der trade between China and Thailand was worth $571.557 million and $69.109 million respec- tively. Myanmar Summary Gov't to OHer Lp to $gk to Iish Breeders; Iyes the Ilosive $,oom Irom Ixports T he government wIII oer Iouns oI up to K5 million ($5,000) to breeders in- terested in entering the aquaculture industry in a bid to counteract the sIIdIng domesLIc hsIIng industry and collapse in catch-sizes due to over hsIIng. The loan can now be used Lo oseL proIIbI- tive costs of brick or soil Ior hsI Lunks, wIIcI cosL upwards of K10 million, May Soe San & Phyu Thit Lwin _., .:. .:.. _._ .. . ., .._... .,..: ..._~: . . ..:.. : _._ ~ ...e: . ...._ _._.q ..e:. .... , .~ ~. |., . ~. ..'.:., ..:..,..:._~: _._ ...._~: .. ..:.~ . . _ e_ .,q._e . .:.. ~..: _._...: ..~.,q ._e _._.. . .,..,..: ..._~: .. ..:. . . q._ . . . .:.. ~ . .:. _._ .. . .~ .,..:._~: ~..q~.,_e _._.. .. ._~:....:.. ..e.|~ .q.qq..,.~..:._. ,.,: .,._ . ._~.~~ ~ _ . . ~ ~ .~ .... ._~: .~ ~ _. :.._~:..q._. and is widely seen as an attempt to boost domes- LIcuIIy Iurmed hsI num- bers. The fall in salt and IresIwuLer hsI numbers, combined with issues in transportation and pro- cessIng, Ius seen LIe hsI export revenues fall from a high of $650 million to $536 million in 2013-14. This falls short of the $;oo mIIIIon LurgeL oI hsI exports from the Myan- mar Fishery Federation (MFF). n zoo6, we exporLed $;oo mIIIIon worLI oI hsI _., .:. . .:... q ~.e ..~~ ,e.. ~,.e.q.~ ..:.....:. q.,_.. ...~,.e. .:. ~...,._~:. ~..,. .q: .~e .q.. .:.. .. .q.q: ..._:,. .~.qq._. ...,e..~,.e .~.._..._ ..~ ..~.. ~:~:....._~: _.,.:.,e..~.:.~ .,~_.: ~,.e.q_.. _~ ~ ~ , . e _ .q..: ._ ~: _ e. ._ .~~,~~ _:..~. -_... ...~, ~ ... ~,.e..: e... ~.:.~~:.~ ~..q ~, ..'.:., .~ ... , ~...._~:. ~..,. .q: .~e .q.. .:.. .. .q.q: ..._:,. .q._. ~,~,e..~.~: _.., ~e .~,~,e.....~ .. .. ..| ~..: ..~ ~.~..~.._..~ ,_. .:.~e.~.~ _.~~~~ ~,.e.~~e''e ~..,. .q: .~e .q.. .:.. .. .q.q: .. ._:, , _~:..q.. . ..~~ .~:~.~ ._.:._. but since then tonnage has fallen every year. This is because the amount we can catch at sea has IuIIen, depuLy cIuIrmun of the MFF, Daw Toe Nandar Tin, said. Our InIund und murI- time waters possess pIenLIIuI hsI; Iowever, we require high quality products for export and we currently dont have LIuL, sIe suId. Breeders can obtain the loan through an applica- tion to the ministry with the interest and charges totaling K1.3 million ($1,300). TIe new Iouns oered by the Myanmar gov- ernment are expected to boost the countrys trou- bIed hsIIng IndusLry, shifting it towards man- aged catch farms. The government also moved to protect the do- mesLIc hsIIng IndusLry this year, banning all for- eIgn-owned hsIIng ves- sels from its waters, in a bid to stop rampant ille- guI hsIIng. This move may see do- mesLIc hsI producLIon In- crease; however, there re- main further issues in the delivery of fresh or frozen hsI Irom IucLorIes In Yun- gons industrial zones due to power outages. .. ._..q..q. . , .. .~. .~...e_e..q.~,_~._:,. |... ._.._ . . , .. . ~ ..:.~:. |..:..e:~.e:~ _ .. ._.._ . .|~. ~. . , . ~ ~ .. ..... :.._ _ e. ._~: . |.. . , . .. ._:,. , _~:..q.. ... . , .~ . -._.:_~:..~~q .q._. .~ q ~. , ~ .. ._..q. .q. . , .. .~..~ ...e _e. .q.~,_~._:,_ q,...:.q., ..:._~: ~....:.|..:. .e:~ ._ . . , .q . :.~ ...: . : . . . _ . .| ._ e ..:~ . :~ _. . |.. . , . ..._:,. ._..|~ .~. .,. ~ ~....:..__e._.. ._._~..|.._.. :.q, ..~. .~...:~... .:..__e.~: ~~..,.~., _e ~ ~. ~~,..:.. ..|._ ....|. ~, ~.~. .....q._e .q._. W a i L in n
K y a w A Myanmar Airways International (MAI) aircraft refuels at Yangon International Airport. S h e r p a
H o s s a in y June 26-July 2, 2014 Myanmar Business Today mmbiztoday.com LOCAL BIZ 9 Myanmar Summary From page ...(IMF) From page ...(IMF) Myunmur Gus Ixports Seen Rising on Rumping Lp oI New Chinu Pipeline Aung Hla Tun M yanmars earnings from natural gas ex- porLs IeII In LIe IusL hs- cal year as more of the resource was consumed domestically but shipments of greater vol- umes to China as a new pipeline comes up to speed are expected to boost earnings this year. Myanmar earned $3.299 bil- lion from the export of gas during the 2013-14 (April/ MurcI) hscuI yeur, down Irom $3.666 billion in 2012-13 and compared to $3.502 billion in 2011-2012 and $580 million in 2003-2004, according to data released by the state-run Cen- tral Statistical Organisation (CSO). Gas exports are a crucial rev- enue source for the Southeast Asian nation, accounting for nearly 30 percent of its total exports of $11.204 billion in the IusL hscuI yeur. Win Maw, a senior ener- gy mInIsLry omcIuI, suId LIe drop In exporLs In LIe IusL hs- cal year was due to the alloca- tion of more gas for domestic consumption after redrawing the agreement with Thailands PTT, previously the sole buyer oI gus Irom osIore bIocks In the Mottama Sea in southern Myanmar. He suId u smuII umounL oI the gas was exported during 2013-2014 to energy-hungry neighbour China but more will be exported this year as a new cross-counLry pIpeIIne Is hIIed to capacity. We sLurLed seIIIng gus Irom RukIIne OsIore BIocks Lo China through the 793 km-long cross-country pipeline around the end of last year, but the amount was rather small since it was not technically feasible to send much through a new pipe- IIne, WIn Muw LoId ReuLers. TecInIcuIIy, we need Lo hII up a new pipeline with gas gradu- ally and it takes about a year to hII Lo cupucILy. Around LIe end this year, well be able to trans- port to China through the pipe- IIne Lo IuII cupucILy, Ie suId. Domestic power consump- tion in Myanmar has been ris- ing steeply as the country has undertaken economic reforms since a quasi-military govern- menL Look omce In zo11 uILer neurIy hve decudes oI mIIILury rule. According to CSO data, total generation of electric power durIng LIe IusL hscuI yeur wus 13.048 billion kwh, up from 10.964 billion kwh in the 2012- 1 hscuI yeur und 8.6z bIIIIon kwh in 2011-2012. Generation by gas was 2.794 bIIIIon kwI durIng LIe IusL hs- cal, up from 2.377 billion kwh in 2012-13 and 1.763 billion kwh in 2011-2012. As LIe omcIuI duLu sIows, do- mestic demand for electricity is growing speedily, but we have prepared to increase generation Close supervision needs to be paid to infrastruc- ture to ensure the coun- trys modernisation is properly regulated, he added. He suId Myunmur Is well placed to build on its recent economic re- forms and embark on an extended period of rapid growth, emulating its re- gional peers. EnsurIng LIIs growLI is sustainable and in- clusive requires deci- sive implementation of a broad range of policies und sLrucLuruI reIorms, Davies said. After decades of mis- management under the repressive junta, the new regime headed by Presi- dent U Thein Sein has introduced nationwide economic and political reforms since coming to power in 2011. According to the IMF, LIe hscuI dehcIL Is ex- pected to remain consist- ent with the governments hve percenL oI GDP dehcIL target in large part due Lo one-o revenues Irom telecommunications licences. Yu CIIng Wong suId despILe hscuI rIsks, sIe expects the countrys strong economic outlook to increase international investment interest in the developing nation. DeveIopmenLs In LIe communications, agricul- ture and mining sector can increase investment conhdence und expund LIe countrys trade opportuni- LIes, Yu CIIng Wong suId. With more foreign banks set to enter the countrys economic framework, the rapid economic growth oI Myunmur`s hnuncIuI sector is expected to con- to meet the demand without af- IecLIng gus exporLs, u senIor oI- hcIuI Irom LIe MInIsLry oI EIec- tric Power told Reuters. Reuters tinue. Davies said the IMF will work closely with authori- ties to ensure expansion demands on Myanmars macroeconomic policy dont outweigh the coun- trys supervision capacity. mpIemenLIng mod- ernised prudential regu- lations for all banks as soon as possible will lay the foundation for the development of a sound hnuncIuI sysLem. 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M in June 26-July 2, 2014 Myanmar Business Today mmbiztoday.com LOCAL BIZ 10 Robber Ixporters Iye Jupun to Boost Ixports Myanmar Summary T he Myanmar Rub- ber Planters and Manufacturers As- sociation (MRPMA) says Japan is the next logical step in the export of My- anmars rubber and latex products. Amidst the falling price of rubber, gross national rubber exports are esti- mated to reach 100,000 tonnes by the end of this hnuncIuI yeur. We beIIeve LIe Euro- pean and global economic crisis, as well as ample Chinese stockpiles are Phyo Thu IuvIng u depressIng eecL on rubber prices. AILIougI IocuI pro- duction has increased, exports have not reached desIred IeveIs. suId U Khing Myint, secretary of the MRPMA. To exporL Lo Jupun we must increase the quanti- ty and quality of our rub- ber. At the moment we have a low quality prod- uct going for $400-500 less per tonne compared Lo InLernuLIonuI prIces he said. The current rubber har- vest of 500,000 acres planted mainly in Mon and Kayin state and Than- intharyi region have yielded latex harvests ris- ing to 160,000 tonnes this year. Current plans for a new export strategy have been hnuIIsed und IL Is beIIeved it will boost rubber ex- ports, which last year fell 12,000 tonnes short of the 95,000-tonne target. Wuste-red Power Plunts Iuce eluy Myanmar Summary D elays are expected in construction of Lwo wusLe-hred power pIunLs In Yungon as import permits from the Myanmar Investment Commission (MIC) for the required machinery have not been forthcoming. Yungon CILy DeveIop- menL Compuny (YCDC), Chosun Korea Co and Zeyu & AssocIuLed Co Ld signed a deal to produce electricity from waste at Dawei Chaung and Thein- pIn In Yungon In ebru- ary. TIe MC Ius noL deIIv- ered import permits, so we are unable to start. As soon as we get the permits we will be able to begin consLrucLIon, U TIun wIn Oo, Ieud oI LIe De- partment of Pollution Phyu Thit Lwin Control and Cleansing at YCDC, suId. A total of $200 million will be spent on the con- struction and operation of the generator facility, construction is expected to take two years and test- ing an additional three months. When fully operational it is expected the gen- erators will produce 45.4 megawatts (MW), with electricity to be sold to Yungon EIecLrIc SuppIy Bourd (YESB) Ior K1o ($0.15) per unit, largely for industrial use. Further discussion as Lo LIe sIure oI LIe prohLs from the 25-year deal will be IeId beLween YESB und the companies involved. We Iuve cooperuLed with foreign experts to ensure smoke and waste water from the generators is least harmful to the en- vIronmenL, U Zeyu TIuru Mon, executive director of Zeyu & AssocIuLes Co Ld, said. Vietnumese Intrepreneors Iye Myunmur Gem Myanmar Summary T he joint secretary of Union of Myan- mar Federation of Chambers of Commerce and Industry (UMFCCI) U Myo Thant says there is growing interest from Vi- etnamese entrepreneurs in the Myanmar gem in- dustry. Vietnamese business- men came to the Myan- mar Gems Emporium held from May 26 to June 7 to seek investment op- portunities in the sector. VIeLnum wIII exporL jewellery after purchas- ing Myanmar jade lots and manufacturing value- udded producL, U Myo Thant said. Kyaw Min The increased invest- ment interest in the gem industry comes as more Vietnamese entrepre- neurs try to penetrate Myanmars consumer market. Joint Secretary U Than Aung Kyaw said the food industry is another key sector being eyed by Eu- ropean and Asian coun- tries as a promising in- vestment opportunity. The 2014 Vietnam-My- anmar Trade and Tour- ism Fair will be held from June 26-30 at Tatmadaw HuII. The fair will feature over 80 Vietnamese busi- nesses in the foods, plas- tic and electronic items sector in nearly 100 stalls. _ ., .: .~ :~ . ~ q~,: . . , ..:.. _._ ~ ..:...:~ ~ , . . , ..:.~ - e~ ,. . .. :..q.. . , .q .:.~ q .. . _. . . q, . ~ ~ .:..~ q ._~: . UMFCCI . ~e~~~. .q.. . ....,~ ._.:._. - e~ ,. . .. :..q.. . , .q .:. ._.~:~.~q~,:..,. .:.~ q..._...q,~~~ .. 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T u n / R e u t e r s June 26-July 2, 2014 Myanmar Business Today mmbiztoday.com LOCAL BIZ 11 Myanmar Summary Contd. P z...(Power Is The Key) Contd. P z...(Power Is The Key) Myunmur: Power Is The Key {Purt I) M y a n m a r s e m e r g e n c e in the last 24 months as Southeast Asias most exciting business opportunity has rarely been out of the press. It has a large, youthful population, a strategically advantageous geographical location within the ASEAN community and, most importantly following decades of authoritarian rule, a renewed desire to undertake the political and economic reforms necessary to position itself as a key economy in the region. Ike uny deveIopIng economy, one of the most important building blocks for Myanmars economic development will be access to electricity. Without power, Myanmars industry will not reach its full potential. In this article we outline some of the reasons why Myanmars power sector has attracted the interest of the international projecL hnunce communILy and provide an overview of the key challenges that the power sector is facing. Oppor tuni ti es Strong demand and potential growth Presently, only 30 percent of Myanmars population have access to electricity (with that percentage decreasing to around 6 percent in rural areas) and there were demonstrations last year In Yungon uguInsL roIIIng power cuts. Power cuts and brown-outs are an unfortunate feature of daily life, as anyone who has visited the city this year will be aware. The power sector is therefore a top priority for the government, and the latest announced goal is to increase capacity to 20,000MW by the year 2030 a monumental plan given the current installed capacity of only 4,000MW. The government also plans to revise the existing electricity law (dating from 1984, it Nathan Dodd & Ben Thompson was enacted during the years of isolation), and is working with the Asian Development Bank to understand the scope of this challenging task. The government is also in the process of drafting a new energy policy, through the National Energy Management Committee. In terms of fuel sources, gus-hred power projecLs have seen the most initial activity. The 120MW Ahlone power project, being developed by Toyo Thai, is one of the most progressed power projects involving international sponsors, with 80MW already being dispatched. OLIer sIgnIhcunL projecLs under development include a 500MW gas- hred power projecL In Thakayta province, being developed by a South Korean consortium, and three locally developed power projects of 50MW each. Myanmar also has sIgnIhcunL Iydropower potential of about 100,000MW, with around 40,000MW of hydropower having so Iur been IdenLIhed Ior possible development. Hydropower projecLs have their own challenges, however, due to seasonality of power suppIy und sIgnIhcunL resettlement issues. The distance of the hydropower resource from the main demand cenLre oI Yungon Is also an issue, with sIgnIhcunL upgrudIng of the transmission network required to avoid substantial transmission losses. As such, there is a recognition by the government that hydropower (which currently accounts for the bulk of the countrys base- load) may be better suited to peak load supply, with thermal power capacity being stepped up to provide base-load. Other renewables could uIso pIuy u sIgnIhcunL role, particularly micro power projects for smaller o-grId sysLems In ruruI areas. Suitable sites for solar and biomass power projects have been IdenLIhed LIrougIouL LIe counLry. However, a successful renewables sector typically requires a solid underlying regulatory framework, which Myanmar does not yeL Iuve - u Ieed-In LurI for example. Gover nment funds li mi ted Ike muny emergIng markets, and indeed some more developed markets, government funds are currently over- stretched. There is simply not the cash available in the public purse to make the substantial investments required to upgrade Myanmars power infrastructure in order to keep pace with its economic development. While government-to- government lending Is hIIIng LIe sIorL- term gap, the private sector is going to have a sIgnIhcunL roIe Lo pIuy In injecting the necessary capital, and that will be by means of both private company investment as well as international bank funding. The most likely form of funding for the power sector is projecL hnunce, bucked by multilaterals or export credit agencies. The question remains however, how great is the commercial lender appetite to provide project hnunce Lo Myunmur? Keen i nter est fr om i nter nati onal banki ng sector In spite of the challenges, there is relatively strong interest from the international lending community in Myanmar; the challenge is to convert this interest into debt funding for suitable projects. Myanmar presents a new frontier market in the Southeast Asia region for the international banks, especially as markets such as Thailand and the Philippines are increasingly dominated by strong local banks. The international banks know that the lender that takes a leading role in the hrsL mujor power projecL hnuncIng In Myunmur wIII Iuve u greuLer prohIe when the sector expands. Many of the key regional and international project hnunce bunks Iuve established representative omces In Yungon und u number of them now have a clear mandate to lend provided it is to the right project. Prople for eorlg mover s The same early mover advantage is being pursued even more aggressively by international sponsors seeking to gain recognition with the various governmental and local players in the market, which is going to be key in getting deals done in Myanmar. Some companies are more cautious than others. Some will wait for opportunities to invest by acquiring shares in projects that the more bullish early movers have developed. Chinese, Japanese, South Korean, Thai and Singaporean companies are looking at this market. China has dominated investment in Myanmar in recent years, particularly for cross-border hydropower schemes. Although Myanmar appears to want to loosen its reliance on its powerful neighbour, Chinese investment und Inuence Is IIkeIy Lo remuIn sIgnIhcunL. Through institutions such as Japan International Cooperation Agency (JICA), the worlds largest bilateral aid agency, Japan has been a key provider of development hnunce und cupucILy building assistance to Myanmar over the last 12 months, leaving the Japanese well-positioned with the government. The South Koreans have also been key investors in the ASEAN region in recent years and are similarly intent on gaining a foothold in Myanmar. The Korean Development Bank is showing early interest, as have a number of South Korean power deveIopers. However, at a government-to- government level, we are not seeing the same level of investment as that oered by LIe Jupunese. Thailand has a long history with Myanmar and, although geographically close, the relationship between the countries is also tinged with a healthy rivalry. Thailands power sector is, however, one of the success stories of South-East Asia over the last 20 years. With Thai APR Energy`s 1UUMW power pIant in MandaIay became the rst American investment in Myanmar`s investment-starved power sector. W a i L in n
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The power sector is a top
priority for the government, and the latest announced goal is to increase capacity to 20,000MW by the year 2030 a monumental plan given the current installed capacity of only 4,000MW. _., .:. -~ .~~ . ._ _...._ , .~~. ~.q .~: ~:q -. ~ . . q :.e e q:~.~:... ...:..q.~. ~...~_e. q:..:._. . ~ .q e q e ._ . ..q .e:-e:~q ~~._e.,. .._ .~~~.,~:.q ..: ~:.e~e~.~. . _e. ._ ~_. . . ..| ..:.. : ~:~:q .,..~:~~q., q:. ..q. ...:..q._._. ._ .: .. . .:._ e ...~ . . .. :..q.~.~ ~.:_e. . ._ ..q.:..:.q.:.,._. ~_.:.e _e .. ...~ ~ .:.~ . . _., .: . .. :..q.e _e .~ .~~ .q.~~~ ~.q..|._ ~_ ..:~ .q. . . , . . :. ~ .. .. .:~ ~:.qq . ._ ._ . ~. . ~.| ~~~ _ e. ._ . . . .~ .q .|~ _., .:. - .~ . . . , . . :. ~.,_ e ~_ ._~~. . ..: . ._ .e ~ .. . e. ..: .|.~ . . ~ ~.,_ e _ ., .:. - . . .~ ~_._ . ~~: . ._ ~. ~e ~._ . . :. ~:. ._....:.,.. ...~ ~_. _~.~.,q._ ~.~ .,..'..:.~:. .e:_..:.._ _e.._. June 26-July 2, 2014 Myanmar Business Today mmbiztoday.com LOCAL BIZ 12 From page ...(Power Is The Key) From page ...(Power Is The Key) projecL hnunce bunks eager to follow Thailands increasingly internationally focused sponsors into the Myanmar market, the opportunities are there Ior Myunmur Lo benehL and learn from the Thai experience. Singapore, as SouLI-EusL AsIu`s hnuncIuI centre, is home to some ambitious developers and is also likely to play a key role, not least due to its favourable tax treaty with Myanmar. Multi later al/ Development fundi ng assi stance Given the risks involved and Myanmars early stage of development, multilateral and ECA development funding assistance is key. If there was ever a market that should attract development funding, Myanmar is that market. Institutions such as the World Bank, the IFC, and the Asian Development Bunk uII wunL Lo hnd opportunities to provide development assistance to the country. Various high-ranking delegations from these institutions have visited the country over the last 12 months to pledge support, which will be essential in ensuring the transition of the power sector to a model that is bankable. Nathan Dodd and Ben Thompson are partners in the Sincpore og ce oj SMIB to Give Iorther K1 billion Myanmar Summary Myanmar Summary T he small and Me- dium Enterprise Development Bank (SMIDB) will contribute K1 billion ($1 million) in loans in each of Myan- mars seven states in a bid to support the countries local business sector, an SMDB om cIuI suId. The loans will be distrib- uted regionally through- out Myanmar at an in- terest rate of 8.5 percent over three years. SMIDB has already granted K20 billion ($20 million) with an 8.5 per- cent interest rate to SMEs throughout Myanmar this hnuncIuI yeur. U TIn Muung HLuy, managing director of SMIDB, said the state loans will provide mone- tary support for the small and medium enterprises (SME) in the country. TIe Ioun wIII be dIs- bursed this month, fol- lowing recommendations from representatives from the state and region- uI governmenLs, Ie suId. State-run SMIDB was established in 1996 and currently has 13 branches May Soe San in Myanmar. Daw Khin Thein, man- ugIng dIrecLor oI MIn HLeL Kaung Manufacturing, said the comparatively Iow InLeresL ruLes oered by SMIDB will draw local businesses in Myanmar to the loans. She said SMIDB will provide bank loans of up to K150 million for a col- lateral worth K600 mil- lion, and when compared with other private banks the interest rate is cheap. The K1 billion state con- tributions from SMIDB will see small and me- dium enterprises become more competitive in My- anmars growing econo- my, she added. I LIe moneLury sup- port provided through the regional loans can help increase the production capacity of local business- es in Myanmar, then the wIoIe counLry wIII benehL Irom LIe secLor`s hnuncIuI reLurns. CA to Spend $1m to Lpgrude Seven Airports T he authorities will spend more than K1 billion ($1 million) to repair seven domestic airports in Myanmar in LIe currenL zo1q-1 hs- cal year, a Department of CIvII AvIuLIon (DCA) om - cial said. Since the process for improving 30 domestic airports began, 48 local and foreign companies have bid to handle the op- erations, she said on con- dition of anonymity. The repairs will include hxIng buIIdIngs und run- wuys, uLLenIng LIe heId and installing security de- vices, she added. TIe muIn LIIng Is Lo re- pair the runways. As rainy season has arrived we will prepare everything neces- sary to prevent airplane uccIdenLs, LIe DCA om - cial said. The airports to be re- paired are Thandwe Air- port in Rakhine state, Tachileik and Mae Sot Htun Htun Minn Airport in Shan state, Naung Mon Airport in KucIIn sLuLe, oI Kuw AIr- port in Kayah state, Kalay Airport in Sagaing region and Koe Koe Island Air- porL In Yungon regIon. Four foreign companies have also made proposals Lo consLrucL LIe HunLIur- waddy International Air- port set to become the largest airport in South- east Asia once complete. One of those four com- punIes wIII hnuIIy be se- lected for the project in June. ~....:.. ~.~.:.e_e. .q.~ . _., .:~. . . .. _._,e.~..:.q ~....:. ..,..:.. ...~... Thandwe Airport in Ngapali, Rakhine State. The small and Medium Enterprise Development Bank (SMIDB) will contribute K1 billion ($1 million) in loans in a bid to support small local businesses. Mcer roun's Globcl Projects Group. The second cnd jncl pcrt oj this crticle uill jocus on the chcllenes in Mcnmcr's pouer sector touchin on underdeteloped documentction, lender securit, cs suppl cnd the legal system. This crticle ucs jrst published in PII Yecrbool zo:(, c publicction oj Thomson Reuters. . ~. ., .~. .: ~. .e, .,._e .~.~~ ......._ _e. ._~:. . q._ . _._ ,e . .e ~ ,~ .~. . . . .~..,.~..: ~. . e . , . .~ . ~ :._. . .....:.~ ~~..,. ... q:..,._e ~...._ _e. ~:.... .~ ~. .. : . .. . _e. _..~ , .~~ ..~ ~.~: ~_ .e: ._ _ e. ._ ~: . SMI DB ~ - ~ . .. . .|, ~ ~: .~ ..: ._.~ ~ , . ~~ q~.,~ ._.:._. .~ . q:_._ ,e ~ .~. .q ~e .~q .:~..~.~, _ ., .:~. . . .~ SMEs . ., ..~ ~ ~ , . . : .~ ~.~: ~_ .e: .... :.|'' e ,.~ ._.:._. _._ ~ .. ~....:.. ~.~ .:...,..:.~.,_e _.,.: . ~....:.. ~.~ .:.e _e . .q.~ . ~ .. ....._ ....- ~~..,..: ~_.:. . . ~~ .:.. . .e .|~ ~~ .. , ..~ .:._ ~~ ~ . ~ ~ .:.. .:...: ._. ~:.. ._~.~.,_e ...q._.._. ~, e .~ ...._ ..:~._ ~. , ~. .,_ ..|.._ ~~ ~ . . .... q. ._~: . ~....:. . ~.~ .:.. . , .q .:.~ .._. U A u n g / X in h u a S h e r p a
available in the public purse to make the substantial in- vestments required to up- grade Myanmars power infrastruc- ture in order to keep pace with its economic development. June 26-July 2, 2014 Myanmar Business Today mmbiztoday.com REGIONAL BIZ 13 Myanmar Summary Myanmar Summary Chinu's Li Ilies Into LK to Tulk Trude, Seul euls Worth $ob C IInese PremIer I KeqIung ew InLo Britain last Monday Ior LIe hrsL LIme sInce LukIng omce on u vIsIL focused on moving the relationship beyond the poIILIcuI dIerences oI the past and signing more than $30 billion of deals. Britains relations with China took a nosedive in 2012 after Prime Minister David Cameron meL LIe DuIuI umu, LIe Tibetan spiritual leader whom Beijing says is a separatist. Ties have recovered somewhat since, and Cameron visited China last year. Tensions remain, however. Beijing warned ondon on LIe eve oI I`s visit not to lecture it on the subject if it wanted good economic ties, after Britain angered China in April when it criticized its human rights record in a report. Britain is expected to take the opportunity to announce it is easing some visa restrictions on Chinese citizens, a ANDREW OSBORN AND BEN BLANCHARD long-standing request from Beijing which has complained current arrangements are overly lengthy, bureaucratic and opaque. I wIII IoId LuIks wILI Cameron and will also meet the Queen. Chinas ambassador to Britain on Friday robustly rejected local media reports that Beijing had threatened to cunceI LIe LrIp II I wus not granted an audience. In speeches to Chinese and British business people, as well as think Lunks, I Is expecLed to make reassuring comments about slowing growth in China to try Lo sIore up conhdence in the worlds second biggest economy. A Reuters poll in April forecast Chinas economic growth could slow to 7.3 percent in the second quarter from a 18-month low of 7.4 percent in the previous quarter, with full-year growth of 7.3 percent in 2014, the weakest in 24 years. I Ius sIgnuIed some exIbIIILy In ucIIevIng LIIs years 7.5 percent growth target, but analysts say the government needs to prevent growth from falling towards 7 percent, something that could fuel job losses and threaten social stability. DEALS Boosting business between Britain and China is one of the visits main aims. China views Britain as Europes most open economy and is keen Ior ILs hrms Lo InvesL in nuclear and high-speed rail projects. It also wants the government to ensure ondon`s HeuLIrow airport is expanded. Two large Chinese investment funds are expected to announce plans to ploughs new money into Britain during the trip. ondon wunLs Lo deveIop us un osIore yuan trading hub and there may also be deals related to that. China has said the visit should yield business deals worth a total value of over $30 billion. Ahead of the trip, Vice Commerce Minister Guo Yun suId CIInu`s investment in Britain had jumped from $840 million in 2008 to $12.4 billion in 2013. CIInu Is wIIIIng Lo import even more high- tech goods, services and producLs Irom BrILuIn, Gao said. She said she hoped Britain would push Europe to lift curbs on exports of high-tech goods to China and said Beijing wanted British help to explore an EU- China free trade deal. Reuters Philippines Culls Ior Constroction Ireeze in Sooth Chinu Seu T he Philippines said last Monday that Chinas expunsIon ugendu In the disputed South China Sea threatened security and stability in the region, calling on all claimant states to halt construction activities that may raise tensions. Albert del Rosario, IoreIgn uuIrs secreLury, said he supported U.S. Assistant Secretary of State for East Asia Daniel Russels proposal for China and Southeast Asian states to get together for dialogue. eL`s cuII Ior u moratorium in terms of activities that escalate LensIon, deI RosurIo told ANC Television on Monduy. Now, lets do that while we work on an expeditious conclusion of the code oI conducL und eecLIve ImpIemenLuLIon. Del Rosario said China and other claimant states have been rushing construction activities in their respective claimed territories to expand, citing works in Fiery Cross Reef, Johnson South Reef, Gaven Reef, and Cuarteron Reef. TIey`re ucceIeruLIng their expansion agenda for the following reasons ... one is they want to do this before the conclusion of the code of conduct. Theyre also trying to do this very quickly in anticipation of the handing down of the LrIbunuI uwurd. Southeast Asian states have been pressing China to conclude a Code of Conduct - a set of rules governing naval actions - for the South China Sea. usL yeur, LIe PIIIIppInes hIed u cuse uL LIe U.N. Arbitral Court in The Hugue Lo cIurIIy ILs rIgILs to explore and exploit resources under the U.N. ConvenLIon oI LIe uw oI the Sea. China has refused to participate in the case. Chinese Foreign Ministry spokeswoman Huu CIunyIng suId CIInu had a right to do what it wanted on its islands in the South China Sea as they were Chinese territory, and criticised the Philippines for what it called Manilas illegal occupation of some of the islands and construction work there. On LIe one Iund, LIe Philippines keep making further provocative moves, and one the other hand make thoughtless remarks about Chinas appropriate moves within the scope of our sovereIgnLy, sIe LoId u duIIy news brIehng. TIIs Is LoLuIIy unreusonubIe. China claims 90 percent of the South China Sea, believed to have huge oil-and-gas deposits and rIcI In hsIery resources. Brunei, Malaysia, the Philippines, Vietnam and Taiwan also have claims over the sea where about $5 trillion of ship-borne trade passes every year. Del Rosario said Chinese construction in the Spratlys was an attempt to alter the character of the features, converting reefs into islands to be able to increase maritime entitlements. China and Vietnam are also involved in an increasingly bitter spat over the operations of a Chinese oil rig in another part of the South China Sea, around the Paracel Islands. China has made Woody Island, which Beijing calls Sansha city, the hub of its operations on the Paracels, including building a port and airport facilities there. Reuters Manuel Mogato & Lara Murallos British Prime Minister David Cameron (L) and Chinese Premier Li Keqiang. N g
H a n
G u a n / B lo o m b e r g A China Coast Guard ship, top, and a Philippine supply boat engage in a stand off as the Philippine boat attempts to reach Ayungin Shoal. J a y
D ir e c t o / G e t t y
I m a g e s e..... ~,~.- . .q.~. ~. ._ .~: ~, ~ . .e -. _ . .q.. ...~.~__..~:. ..: e~.,._~:. ~,.:.,~ ._.:_~:. . _ . . ~ . .:. . :. _. ~~ ...._ ~_..:~ .q.. . , ..:.. . ..: .,. ~ q.~,...q, .~:... ._. ~,~~,_~... Li Keqiang ~.,_e ~,.:.,~ _-~, .. ..~_~. ~q:.~ .:..q:~._.. ..q..~_. ~..' .~..q.~._..q, ~.~_e._.. ~..q~,..'.: .e ,~ ~,e.q .:...:. ._ ... . . ._~: .. q ._ . _- ~ , . . ~, ~ . ~_~:. .~..q.._ ~~ ... ~, _ ~ .. . ...-. ~ .q , .. . .. . ~ .q...:.~_e. . . . :.._ ~ ~ , ..~: _~. ....:..:.~:. .~. _. ..,:~ ~ .~ . .q...: ~ . ._ .. ..: ~ .q , .. e., .. ~,~.. .:..q:~ ._.~._...,:~~ .~. .q. _ ., ._ .~: .. , .:. ._. ~, ~ . _ - ~ , . .. :..q. ..:..:. ~_~....:.~~~ Li ._ ~,~.- ...:. .q... ..~ .. ~..' . ... . ~ . :. _ . . . ._ e ._ . .,.,.:._~._. June 26-July 2, 2014 Myanmar Business Today mmbiztoday.com REGIONAL BIZ 14 CoHee Ootpot in Indiu Climbing us Ruins Spor Beun Growth A worker rakes the pulped outer layers of arabica coffee berries as the waste pours. B lo o m b e r g C oee producLIon in India, the third- largest grower in Asia, will probably rebound Irom LIe hrsL decline in six years after plentiful rains spurred bean development, an exporters group said. Shares of exporters gained in Mumbai. The harvest in the 12 months starting Oct. 1 is set to expand from 300,000 metric tons this year, Ramesh Rajah, presIdenL oI LIe Coee Exporters Association, said without providing an estimate. While he expects an increase, the crop still faces the risk of pest attacks and reduced rainfall from a possible El Nino later this year, he said by phone on June 13. HIgIer producLIon Swansy Afonso may boost shipments, expanding global supplies and potentially pressuring prices. Arabica futures In New York enLered abear market this month and have tumbled 20 percent from a two-year high in April after rains eased drought damage for plants in Brazil. Robusta prIces In ondon IeII q.q percent from the highest level in 17 months in March. TIe prospecLs seem much better next year, specially for robusta, because rains have been quILe IuvorubIe, NIsIunL Gurjer, a member and past chairman of the Karnataka Planters Association, said by phone June 12 from Bengaluru, formerly known as Bangalore. The group represents 650 growers from the state, which supplies about 70 percent of the nations crop. Total production may increase by 7 percent from the 280,000 tons that the planters association estimates for this year, Gurjer said. The robusta crop, which makes up 70 percent of the total, may expand by 15 percent, he said. El Ni no Concer n Karnataka received 9 to 75 percent more rain than the 50-year average from March to May, according to the India Meteorological Department. The monsoon from June to September, which supplies more than 70 percent of annual rainfall, will be below normal at 93 percent of the 50-year average because of the emergence of El Nino, the bureau said. While Rajah from the exporters association said a weak monsoon may hurt the crop, Gurjer of the planters group said the absence of heavy rain later in the year may be benehcIuI. I un EI NIno does happen and the monsoon isnt as vigorous as last year, the risk associated with a heavy monsoon reduces, Ie suId, explaining fewer cherries would be lost. TIe sLuLe-run Coee Board cut its output forecast for this year to 311,500 tons in January from 347,000 tons at the start of the season, citing heavy rain in Karnataka in September and October. The board hasnt updated its estimate. The crop was a record 318,200 tons last year, board data show. A weak monsoon might increase the incidence of the white stem borer pest in arabica plantations, according to Rajah. Br azi li an Suppli es SIures oI TuLu Coee Ld. (TCO) udvunced us much as 2.8 percent to 994 rupees in Mumbai trading, the biggest gain in more than a week, before trading at 986.35 rupees uL 11:qq u.m. IocuI LIme. CC ProducLs Ld. (CCP), ndIu`s bIggesL exporter, climbed as much as 1.5 percent to 63.70 rupees. Arabica prices may drop by 10 percent to 15 percent in the next couple of months, while robusta may decline 5 percent to 10 percent, Rajah said. BruzII`s crop sIouId be coming in better than expected and we are heading into the lean demand season as the summer months begin in U.S. und Europe, Ie suId. Brazilian growers are facing less severe crop losses than estimated after showers reduced the impact of the worst dry spell in 50 years, Agriculture Minister Neri Geller said on June 2. Output this year may be 50.5 million bags, according to Mercon Group. Thats higher than the 49.5 million estimated by the U.S. government in May. S h i p m e n t s from India may fall in the second half because of the smaller crop and weaker prices, Rajah said. Exports in 2014 will drop by 5 percent to 10 percent from 312,756 tons a year earlier, he said, reiterating estimates made in April. Exports declined to 167,714 tons between Jan. 1 and June 10 from 168,089 tons a year earlier, board data show. Buyers from Italy, Russia and Germany accounted for about 40 percent of exports last year, the data showed. Robusta rose 0.1 percent to settle at $1,999 a ton on NYSE Ie yesLerduy, while arabica fell 0.4 percent to $1.758 a pound on ICE Futures U.S. loomber Myanmar Summary Myanmar Summary Chinu to Meet This Yeur's ,.g Percent Growth Turget: Premier Li C IInu Is conhdenL IL will hit its growth target of 7.5 percent this year, Chinese PremIer I KeqIung suId last Monday, adding the government was ready to adjust policy to make sure it does. Writing in Britains The Times newspaper on the eve oI IIs vIsIL Lo ondon, I suId sIowIng growLI In the worlds second-largest economy was normal and not a problem. CIInu`s economy needs to grow at a proper rate, expected to be around ;. per cenL LIIs yeur, I wroLe. L Is sIower LIun LIe pusL, buL normuI. DespILe consIderubIe downward pressure, Chinas economy is moving on a steady course. We will continue to make anticipatory and moderate adjustments when necessary. We are well prepared to defuse various risks. We are conhdenL LIuL LIIs yeur`s growth target will be meL. A Reuters poll in April forecast Chinas economic growth could slow to 7.3 percent in the second quarter from a 18-month low of 7.4 percent in the previous quarter, with full-year growth of 7.3 percent in 2014, the weakest in 24 years. I Ius prevIousIy sIgnuIed some exIbIIILy in achieving this years growth target although analysts say the government wants to prevent growth from falling towards 7 percent, as that could fuel job losses and threaten social stability. Reuters Andrew Osborn B lo o m b e r g ~:q -~~ e~_~ .. ..~: e .~..._._e.._ ~.e . ~ . .._ ., . : q :. , .. ._~: ._.:~ . . ~~ . .. ~_~.~_e. .~:e~... ~. .. q:. _., ._ .~: .. , .:_._e.._~:. ~..q:.. ._ ~e ~. . . ._.:_~:.. ._ . .q ~..q:....:.- q e e:. :.._ . _ . ~~ . ._~:. .q._. .~:~~: ~ q~. ~ . ~~. q~...q:~ e... _ .~ q. ~, ,~~,~~~ ~ q ._e.,.,.q._~:. .~:e ~ . .q: .. . . :.~. . ~_ Ramesh Rajah . ._.: _~:..._.,.. ~.~~.: ._ e ., . , .:...: ._ . . .. .:.~.,_e . .. :.~.q:~ .. _~.~.,q_.. e...~ ~e , . q:. ~ _ e. . ._ .q ._ ~~ ~ . .q :. , .. ..: ~ .._e ~,. ~, q~.,~ ._.:_~:..._. ~ . . . _. ~~ _. .._ ..:_e~..~:. _.~~ ... _. . ~. : ~ . . ~:. ~e _.,...~: ....,._.~~ q,._. ~.:.~.:.~:. .:. _e...'..._. Arabica ~.,_e ,e..e:~. ... .,.,.,._e e..~~. ~ .q:~._.. -_..~~. .. .~ ~ ~ _. ~~ . q:. ~ q:. .,. ~...._. ~, ~ . ~.,_e , .. - e. . . ~~ ~ ~ .~~ . ~:. ... q:..,.. .q:~q q, .~.q._~._.~.,~ q._~:. ~q~~,_~... Li Keqiang . ~,.:.,~ ._.:_~:.. _. . ~. .q~.,_e ..q:~qq,.~|..:..,_ q, ~._.:.._~:. ._.: _~:..._. _-~,- Times .~..: ~ .q..:.:..~~q ,. - ., ., . ._ .~ . ._ ~..:..~ Li . ~.: . ~ e~_~ .. .. .. :..q.. ~ ~.~~.....~..:_.. ._ ..,_e._.. _..,:~.. .e~._~:. ._.:_~:..._. ~e. ...~.~~.,.~._. .q:~ . .e . e _ ~_ .| ~e .'' June 26-July 2, 2014 Myanmar Business Today mmbiztoday.com REGIONAL BIZ 15 Myanmar Summary Myanmar Summary Asiu's iesel emund Growth Seen ut nd Lowest Since 1qqS Crisis A sias diesel demand is expected to grow this year at the second lowest rate since LIe 1qq8 hnuncIuI crIsIs as slowing economies and subsidy cuts squeeze consumption and help build a surplus for which there are few markets. Demand in top regional consumers China, India and Indonesia is expected to remain stagnant or IuII. And us new rehnIng capacity is added in Asia and the Middle East, excess diesel is seen hitting an annual average of more than a million barrels per day (bpd) in 2014, according to one oil and gas consultancy. That means regional returns or cracks from processing crude into the fuel - already near 3-1/2- year lows - will remain slim, analysts said. Since diesel or gasoil accounts for nearly 40 percent of the typical Asian oil plants output, overall processIng prohLs wIII also be pressured and some regIonuI rehners ure already slowing run rates. Asias surplus diesel would normally be shipped west but Europe is facing a glut as well, with diesel margins there holding at multi-year lows. A purLIuI recovery this year is expected but growth will probably still fall short of the levels seen In zo11 or zo1z, suId AIex Yup uL energy consuILuncy FGE. JANE CHUNG AND ALICE WOODHOUSE Asias diesel demand will grow slightly faster this year than in 2013, when it rose less than 1 percent - the lowest in 15 years, FGE said. Oil consultancy Wood Mackenzie (Woodmac) has lower numbers, forecasting diesel use in Asia to grow at 0.45 percent compared to average annual growth Ior LIe pusL hve yeurs uL 3.9 percent. For the second quarter this year, Woodmac estimated Asian diesel demand 0.7 percent higher than last year, while forecasting growth in 2015 at 1.7 percent. This slow growth amid increasing capacity will result in a diesel surplus of around 1.2 million bpd this year, said Suresh Sivanandam, an analyst at Woodmac, with Chinas diesel exports averaging around 90,000 bpd, nearly double from 2013. China is bringing on new rehnerIes even us demand growth there drops to its slowest in decades, forcing Asias top consumer to turn exporLer und oodIng LIe region with supplies far in excess of demand. New plants in India and the Middle East are also contributing to diesels overhang, analysts said. Diesel is Asias most widely consumed fuel, used in everything from power generators and factories to trains and trucks. Given its broad applications, the product is often seen as an indicator of a countrys economic health. LI TTLE ROOM There is some room but not a lot for Asian products to be soaked up elsewhere, said Amrita Sen, chief oil market analyst at Energy Aspects. AsIun producLs Iuve Lo move out of Asia ... but competition from other players such as the Middle East, Russia and the U.S. Is rIsIng, sIe suId. Given the excess supply, AsIun rehners - especIuIIy in South Korea and Japan which account for about a third of Asian middle distillates exports - have lowered crude runs slightly. SouLI Koreun rehners may consider cutting run rates if the supply glut continues, but actually they have already trimmed by 30,000 bpd or o,ooo bpd so Iur, suId a source at a North Asian rehner wIo decIIned Lo be IdenLIhed. SouLI Koreun rehners` average operating rate from January to April this year was 80.7 percent, down from 83.1 percent during the same period last year, data from state- run Korea National Oil Corp (KNOC) showed. n LIe hrsL quurLer oI this year, South Korean und Jupunese rehners processed less crude than last year amid a regional supply glut. PARI NG SUBSI DI ES A gradual reduction of subsidies in India and Indonesia to bring domestic gasoil prices in line with global markets is also hurting consumption, analysts and industry sources said. Indonesias diesel demand is expected to drop 4.6 percent this year, further than last years fall of 3.7 percent, Woodmacs Sivanandam said. Indias diesel use fell 1 percenL In LIe hscuI year that ended March 1, zo1q, LIe hrsL drop in more than a decade in the worlds fourth-largest oil consumer, according to data from the oil ministrys Petroleum Planning and Analysis Cell. New Delhi last year uIIowed sLuLe oII hrms Lo hike diesel prices by small amounts every month with the aim to end subsidies eventually. That should keep pressing down the countrys demand for diesel, said a trading source based in India. Western oil advisors and economists have for years been saying that fuel subsidies have distorted Asian oil markets, encouraged overconsumption and Ied Lo mussIve rehnery capacity surpluses in some countries such as China. YeL LIe ImpucL oI reduced subsidies in India and Indonesia may not be long-lasting as economic growth in the two countries will likely bolster demand for diesel A worker repairs a dieseI pump machine at a fueI station in KoIkata ]anuary 18, 2U13. Ropee in Biggest Three-uy ecline Since Junoury on Oil Concern in coming years. SubsIdy removuI Ius played a role in lower demand but we anticipate that the impact of price hikes on Indonesian diesel demand will be temporary, as road- freight demand for diesel will grow in tandem with LIe deveIopIng economy, Sivanandam said. A serIes oI rehnery shutdowns in Australia is also likely to support demand for the fuel, helping soak up some of the regional surplus. Reuters B rent crude jumped to a nine-month high on June 13 on concern violence in Iraq will disrupt sup- plies, threatening to in- crease costs for Asias third-largest economy that imports almost 80 percent of its oil. Indias wIoIesuIe-prIce InuLIon accelerated to 6.01 per- cent in May, the fastest sInce December, omcIuI data showed yesterday. TIe Lrude dehcIL reucIed a 10-month high of $11.24 billion in May, a report showed last week. The rupee slid 1.9 per- cent in the past three days to 60.38 per dollar uL 1o:o8 u.m. In MumbuI, the biggest loss since the period ended Jan. 27, ac- cording to prices from local banks compiled by Bloomberg. It fell 0.4 per- cent today and dropped as low as 60.5250, the weak- est level since April 29. TIe rupee`s weukness is mainly due to dollar buying by importers on expectation oil prices may surge because of Iraq ten- sIons, suId Ankur JIu- veri, co-head of currency and rates in Mumbai at brokerage Edelweiss Fi- nuncIuI ServIces Ld. TIe currency may fall as low as 60.80 today, he said. Indias currency and in- terest rates will withstand the surge in oil prices as the nations political stability draws capital, Ashima Goyal, a member of the Reserve Bank of Indias technical advisory committee, which advises Governor Raghuram Ra- jan on monetary policy, said in a phone interview yesterday. The rupee is unIIkeIy Lo weuken mucI beyond 6o per doIIur, and may trade mostly between 58 and 60 this year, she said. Foreigners have pumped more than $10 billion into Indian bonds and stocks this quarter, exchange data show, as the nations most deci- sive election in 30 years buoyed conhdence. loomber Kartik Goyal ~:q- .~e.~..~._ e...~~. ~.~~.:._ e .,.,.q_.. ~ .._~. ~~ . ~~_ . ~_ . . . ~ e ~,_....,._e.~: ...:..q. ....~._... q,....:. _...:.._ ....~:. ..: ,_..._.. ...~~~,_.e ~:. _e_~....q,~_._~:. .q._. ~,~ ~.e. ~.,.q:. ~. ...~..~,.... ._..:.. ~e.~:.._ ~__. ., ~...:._e ., . , .:.._ .~:q . ~.q ~.e . .~ ., . .~ ~.. .:. _...:._~~~ . ~e . . . ~.,_e ~~, . . . ~~. ~.q~. .... ._~..,..,q.:.._~:. .q, . ~ . . . , .~. . - ._.:_~:..~~q .q._. . . ._ . : .q, . . .. ..: .: ~...~ _.,._qq..:. ._ , . . . , ..|. ..: ~.,. _e. ._~: . .. .:. .:.. ._.: _~:.:.._. Brent crude ~.,_e ~,. ~, q~ ., ~ ~ q~ ~ _e. .~ .._ ~_~..e~..:.._~: .:~ . .q. . :. e ~ . . . q ._ ~~ ~ ~ ..~~ . ~_. ...,~~.~: ,.-.q, ~ q:..,.~:. ~..., ._ ~:q- ~~e~_~... ...~~~:. ~,~.:.q~ _.~~...__e.._. ~.e - .~~:.....e:...._ ...~ ' ... ~~ q:..,. _.~~._.. .~:.,:~.. ~_ ., . ._ e. ._ ~: . ~. .q ~.~ ~.~ .:.~q . q._ . .._~.~.,_e e., ~ '~ ... ~ .~... ._~: . . q._. June 26-July 2, 2014 Myanmar Business Today mmbiztoday.com INTERNATIONAL BIZ 16 Contd. P ;...(China) A sian shares struck a cautious tone last Tuesday as the double-whammy of a deepenIng conIcL In ruq and a gas dispute between Ukraine and Russia sapped investors appetite for risk. MSCIs broadest index oI AsIu-PucIhc sIures outside Japan fell 0.3 percent. Japans Nikkei bucked the trend with rise of a 0.5 percent, though it was still down on the week so far. Oil prices remained near nine-month highs after militants from the Islamic State of Iraq and LIe evunL seIzed u Iurge swathe of northern Iraq and threatened to capture u key oII rehnery. The insurgent advance forced Washington to not only consider options for military action but also hold brief talks with Iran, its long-time foe, to support the besieged government in Baghdad. U.S. crude futures edged down to $106.76 per barrel after having climbed as high as $107.68, but investors remain wary of potential disruptions to oil exports. Hideyuki Sano TIe udvunce oI extremists to Baghdad or bombing by U.S forces will be a trigger to justify rise in U.S. oil prices above $110. That would be a burden for the world economy in the neur Lerm, suId DuIsuke Uno, chief strategist at Sumitomo Mitsui Banking Corp. HIgIer energy cosLs ure likely to curb growth in oil-importing economies, with the Indian rupee already falling victim to worries over rising InuLIon Lo IIL u one- month low. Tension in Ukraine showed no sign of abating us RussIu cuL o gus Lo Ukraine in a dispute over unpaid bills that could disrupt supplies to the rest of Europe and set back hopes for peace between the former Soviet neighbours. As investor risk sentiment was hit, IgIL-Lo-quuIILy bIds underpinned U.S. Treasuries prices despite solid U.S. industrial output data. The 10-year yield stood uL z.q percenL, o IusL weeks peak of 2.662 percent. Immediate focus is on the Federal Reserves monetary policy statement on Wednesday, when the U.S. central bank is expected to announce it will continue paring its bond purchase programme and cut its growth projections. In the currency market, the Australian dollar slipped after minutes of the Australian central banks June 3 meeting were more dovish than expected. The Aussie dipped 0.4 percent to $0.9361 as the minutes showed the Reserve Bank of Australia was not sure the current stimulus would be enough Lo oseL u drug Irom falling mining investment and government belt- tightening. The British pound held neur u hve-yeur IIgI IIL, maintaining momentum after Bank of England chief Mark Carney surprised markets last Thursday by suggesting the Bank of England may tighten its policy before year-end. The pound stood at $1.6975, near Mondays high of $1.7011, with close attention falling on consumer JInuLIon duLu due later in the day given the focus on the BoEs policy. Elsewhere, Argentinas Merval index fell 10.1 percent after the U.S. Supreme Court declined to hear the countrys appeal over its battle with hedge funds that refused to take part in its debt Myanmar Summary Most Asiun Shures Slip on Anxiety Over Iruq, ollur Idges op F or more than eight yeurs, uong TII Kim Oanh bought cases of thread from China for her garment IucLory In HunoI. usL month, rattled by an anti- China riot in her country, sIe pIuced Ier hrsL order from South Korea. used Lo buy qo percent of my thread Irom CIInu, suId OunI, 52, who employs about zoo peopIe uL VIeL Hung Garments & Embroidery. SIIILIng sourcIng muy cost us more, but we need to think of it now, or it muy be Loo IuLe. You never know how things may Lurn ouL. Oanh fears a further disruption in trade after last months violent Nguyen Dieu Tu Uyen Chinu Aggression Soonds Wuke-Lp Cull Ior Vietnum Mukers protests following Chinas placement of an oil rig in disputed waters. The unrest halted production at foreign-owned factories and caused Chinese workers Lo ee. WIIIe China is the nations largest trading partner, Vietnam must reduce its dependence and develop a contingency plan to cope wILI uny IIccups, LurbuIence, VIeLnum Chamber of Commerce and Industry Chairman Vu TIen oc suId LIIs month. More Vietnamese businesses may have to consider alternatives as the country prepares Lo hIe u IeguI suIL challenging Chinas claims to the disputed waters. Prime Minister Nguyen Tan Dung said in an interview last month that his administration had prepared evidence and was ready for legal action against the worlds second-largest economy. L wIII Iorce VIeLnum`s businesses to look into other markets where the political risk is absent, und LIuL`s u good LIIng, suId CIuu Huk BIn, u Singapore-based regional economist at Bank of AmerIcu Corp. L`s uIwuys good to diversify, anyway. You don`L wunL Lo reIy Loo much on another country, especially where political LensIons ure escuIuLIng. The Vietnam Textile and Apparel Association has asked its more than 1,000 members including Oanh to consider alternative supply sources to China, according to Deputy General Secretary Nguyen Van Tuan, even as bilateral trade between the two countries rose 84 percent to $50.2 billion last year from $27.3 billion in 2010, according to government data. About 31 percent of Vietnams exports to China last year comprised agricultural products, while apparel and footwear made up 13 percent, trade ministry data showed. Forty-two percent of imports from China were telephone components, electronic spare parts, and fabric and leather for garments and footwear, with tools and machinery making up 18 percent. Vietnams policy makers B lo o m b e r g ~:q q e e:. :. ~.,_ e ~|.,~ ~q~~.q. e~ q,..qq:.~_~:. .q,~_. .:...:.._~: q..._.... .:.~..' ~,_.e e~ ,~.._. MISCI - ,.~,..:.~q ~:q..e~~~.q ., ~_.~ qee:.:.~.,_e ._... , q:..,. ~.. .._..,- Nikkei ~.,_e . _... q:. . , . _.~~ ...:._. .~.~~.. .,...._~:. .q._. .q, ~, e ..:.._ ._ . . _~:_.~~.~q.,_.. ~q~ ~ ~..:.~.,..q:~ .. ..._~.:.. ~.~.q,.,. .~ , ~:. . . .. ~ q, _. . .._.:~ .,._~~~_e.._. ~|q ~, . ~, _., .. . .q. _..._.._.q,.:.~ ~q, .._. ........:. _... q, e ~:.....~ q _. . ~ .~ q ~. .q~:. .:~ . q, ~~ ~ _e.._. restructurings. The move risks sending Argentina into a fresh sovereign default, although Argentine shares have risen 34 percent so far this year. June 26-July 2, 2014 Myanmar Business Today mmbiztoday.com INTERNATIONAL BIZ 17 Myanmar Summary Myanmar Summary From page 6...(China) T he number of companies on Cambodias stock exchange doubled on Monday - to two. The debut by a Taiwan garment maker is an important baby step for LIe bourse, buL LIe hrm`s long road to listing and a lack of clarity on the number of companies to follow underscore just how far Cambodia has to go before it becomes a hot frontier market. While neighbouring Vietnam has seen around 660 companies go public since the opening of its hrsL bourse In zooo, boLI CumbodIu und uos, which has three listed hrms, Iuve IuIIed Lo IIve up to early expectations that came when their exchanges opened for business in 2011. That the newly listed company - Grand Twins International (Cambodia) Plc, a major clothing manufacturer in the country - is not Cambodian but Taiwanese only serves to highlight local corporate reluctance. As does the two-year gap since CumbodIu`s hrsL IIsLIng. Companies planning to list must provide LIree yeurs oI hnuncIuI statements, have made a prohL Ior LIree yeurs und Prak Chan Thul and Lawrence White Cumbodiu's Second Listing Highlights Growing Puins Ior Irontier Murkets IuIhI poLenLIuIIy onerous requirements to have a variety of shareholders. The Cambodia Securities Exchange, a joint venture with Koreas bourse, initially announced plans to list three state-owned companies by the end of 2012 but so far only the Phnom Penh Water Supply Authority has made it to market. And there is not a whole lot of turnover, with no shares changing hands in one in three trading days last month. The trading oor wus empLy und computers sat switched o wIen u ReuLers reporter visited in June. While some 100 people, mostly media, were in attendance for the ringing of the bell for Grand Twins, it was a subdued debut with the stock falling 5 percent in extremely thin trade. Hong Sok Hour, CEO of the exchange, has said around 10 companies are exploring a listing and there would likely be one more before the end of the year, but noLed prepurIng hnuncIuI statements continued to be a challenge. We cun`L know wIen LIey ure reudy, Ie LoId u news conference earlier this month. Frontier markets, a subset of emerging markets but which are more illiquid, less stable and carry more risk, have increasingly found favour with investors and without change, Cambodia has much to lose in potential capital. uck oI ucLIon Irom CumbodIu und uos meun they risk being eclipsed by Myanmar, says Asia ronLIer`s Hugger. Myanmar, which has enacted sweeping political and economic reforms since 2011, is drawing huge foreign investor interest with some of that beginning to bear fruit. Gap Inc, for example, just announced plans to open Lwo IucLorIes In Yungon. Myanmar, which currently has two listed hrms, pIuns Lo open u brand new exchange in October next year with Japanese help. It says half a dozen companies will list in the early stages including Myanmar Agribusiness Public Corporation and Asia Green Development Bank. While experts say that both Cambodia and uos do Iuve weII run companies that would be attractive investment targets, there needs to a change in mindset as business tycoons have yet to be convinced about the benehLs oI IIsLIng. Pervasive corruption has also fostered a sense of distrust that is hindering the development of a local institutional base, despite most of the necessary regulatory framework being in place. oreIgn InvesLors und, to my surprise, even quite a number of local investors are still questioning the trustworthiness of local companies hnuncIuI sLuLemenLs, suId Hun Kyung-Lue, head of Southeast Asia investment banking at Tongyang Securities (Cambodia) Plc, who worked on LIe hrsL Cambodian IPO. The Cambodian government could benehL by LukIng u IeuI out of the books of other frontier markets such as Bangladesh, said Douglas Clayton, CEO of frontier murkeL Iund eopurd Capital. Public companies in Bangladesh pay 27.5 percent tax, while most private companies must pay 37.5 percent. Cambodia could, for example, cut corporate taxes in half for three Lo hve yeurs Ior IIsLed companies, he said. TIe greuLer transparency this would bring might actually increase tax collections over LIe Iong Lerm, Ie added. Reuters are trying to bolster an economy that the World Bank estimates will grow 5.4 percent this year, sIower LIun un omcIuI target of 5.8 percent. The government is studying the impact of the tensions, and will closely monitor sectors that may be uecLed, IncIudIng trade, infrastructure development and tourism, and take suILubIe ucLIons, DepuLy Prime Minister Nguyen Xuan Phuc said June 12. Vietnams Transport MInIsLer DInI u TIung said he has not seen any indication of Chinese companies pulling back on investment in the Southeast Asian nation, even as the South China Morning Post reported June 9 that state-owned hrms Iuve been LoId Lo temporarily halt bidding for Vietnam contracts. TIere Is no doubL LIuL economic growth will be uecLed, suId e Dung DounI, u HunoI-bused economist and former governmenL udvIser. TIe question is how much, 0.5 or 1 percentage point. Itll depend on how we cope wILI LIe ImpucL. The benchmark VN Index (VNINDEX) has slipped almost 5 percent in the past three months. The dong has weakened 0.6 percent against the dollar this year. Vietnam isnt the only country in the region that China has clashed with. China, which controls the bulk of global rare-earth supply, in 2010 turned o LIe Lup Ior Jupun und imposed a de facto ban on exports to the nation after the captain of a hsIIng bouL InvoIved In a collision with Japanese Coast Guard boats was detained. Anti-Japan protests sparked by a territorial dispute in 2012 hurt carmakers including Hondu MoLor Co. und Toyota Motor Corp. Chinas growing assertiveness has spurred Japan to turn its attention to Southeast Asia and pledge billions of dollars of investment. Vietnam uIso sLunds Lo benehL Irom LIe Truns-PucIhc Partnership that would cover an area with about $28 trillion in annual economic output and excludes China. Vietnam would also gain from an Asean Economic Community planned for 2015. It has already seen overseas makers of apparel, footwear and electronics set up factories, spurring a six- fold increase in foreign direct investment to $8.4 billion in 2012 from $1.4 billion in 2002, according to World Bank data. The tensions between Vietnam and China in the South China Sea are u wuke-up cuII Ior Vietnamese leaders to IusLen LIe dIversIhcuLIon of the countrys supply chains and development of domestic industries that can feed critical raw materials to the countrys factories, said Trinh Nguyen, u Hong Kong- bused economIsL uL HSBC HoIdIngs PIc. I pusI comes Lo sIove, VIeLnum cun udupL, suId AIun PIum, Ho CII Minh City-based chief economist at VinaCapital Group, Vietnams biggest fund manager that oversees about $1.6 bIIIIon oI usseLs. L`s an urgent message that Vietnam should take measures to lessen its economic dependence on China. Its never good to put all your chips on one counLry. Reuters q....~:_~:_._._e...: ._. 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June 26-July 2, 2014 Myanmar Business Today mmbiztoday.com INVESTMENT & FINANCE 18 Jupun to Iinunce $q.gm to Improve Idocution T he Japan Interna- tional Cooperation Agency (JICA) will fund 2.5 billion ($24.51 million) to help improve Myanmars education sector, the agency said. The project aims to im- prove quality of teacher education in the educa- tional college, JICA said. Education colleges in Myanmar are institutes to train teachers in basic education. The said grant amount will cover for administra- tion building including assembly hall and gymna- sium, classrooms build- ing, hostels and dining hall with kitchen. Neces- sary equipment will be set up as necessary. The Japanese agency said the quality of the ed- Aye Myat ucation, especially teach- ers education, is one of the reasons that deter motivation of students to continue learning. JICA said the project will improve education colleges which will pro- duce teachers of higher quality and greater com- petence who will in turn upgrade the quality of the students as well as the quality of basic education of the country. The grant agreement Ior LIe ProjecL Ior m- provement of Education CoIIege wus sIgned be- tween the Department of Educational Planning and Training under the Min- istry of Education and JICA, a statement said. Myanmar Summary Students attend a local school on the outskirts of Yangon. U A u n g / X in h u a ., . ~~:. ...| ...: q~.q..~. (J ICA) ._ _ ., .:. -._:.q. ~_ e_e. ~.~~.q.~~~ e,. . ... .e ~..q~,..'.: , ... ~ .,.~_.......:.._e . q._ . ~. .|~ _ . ._ ._:.q. .~:. . . :. ~ ~._ .. ._:. , . , .~. . .:.~ ..~._~:..~q ._ .q: .q:.:.- ~q_ ~....:.e_e.~.~~.:.. q,q_qe_.._e.._. e. ~. ~. ~ ._:.q..~:. . .:.q , _~:.. . q:~..:~ ~~ . :. ~._ .~.~.., .. ~:.~.:., .:. ., .~..:~ ~~ ...:..,... ..e ..: .:..|~ ._ e . q._ . J ICA - ~.~.._ ._: .q..~:. . .:.q .q: .q:. .:...~q_~.._._~..q, q_ q e _ . . , .~ . ~. . ~._.. ._:.q.~. ~ ~q_ ~..._ ._~..: .~:..:. .~:...:. ..'..|~.:.. q, q_qe_.._e.._. June 26-July 2, 2014 Myanmar Business Today mmbiztoday.com INVESTMENT & FINANCE 19 Myanmar Summary David Mayes P eopIe oILen hnd LIem- selves suddenly coming into a chunk of unex- pected money and they need to decide the best way to invest it. As we are in a situation where the broad markets continue to be highly overvalued, the downside risks of just throwing the money into the market are very high. One way to avoid get- ting caught at the peak before a crash is to put the money into a discount brokerage account und creuLe u wIsI IIsL porLIo- lio that you would want if the individual stocks were trading at the right valuation. The key to this strategy is that you pa- Muking u Wish List, Avoiding The Crush tiently wait with the money in cash until each company hits your desired price before pur- chasing it. Many of the top investors of the world follow a simi- lar strategy. Rather than wait for the markets to be crash- Ing, und LIen LryIng Lo hgure out when you are close to the boLLom, und onIy LIen hgur- ing out which companies you want, it is much better to have a wish list put together ahead of time. Then you do not need to try and pick the bottom of the broud murkeL move uL uII. You just need to know which prices you have determined are fair to buy the companies you want to hold long term. When the stock trades down to that price, you have a pre-set alert inform you that it is time to make the pur- chase. A good rule of thumb is to try and buy companies trading at price to earnings ratios of 10 or below. If you want a portfolio of say 20 companies, you may in fact need to make a wish list of about 40 (some may unfor- tunately not dip down to your valuation target even in a se- vere crisis). When the market begins a serious retracement, you muy hnd LIuL u Iew oI your desired targets dip into buy range without the broad mar- kets even crashing. In the event oI u IuII on crusI you muy hnd that within the space of a few days they all tend to end up as value buys at about the same time. Thus it also makes sense to make a priority list in the event this happens. The great thing about this strategy is that if you pick solid companies and they survive, you will almost certainly double your money at the peak of the following bull market, even if that may be some time away. If the broad markets peak at over a price to earnings ratio of at least 20, which they always do at the end of a cyclical bull mar- ket, most likely your stock hold- ings will all be valued similarly. This assumes earnings can even sLuy uL over LIe perIod, wIere- as in reality they could grow if you have picked stocks where the companies are still in the growth phase of the business life cycle. A few may see declin- ing revenues if you have not picked good companies, hence LIe more dIversIhed you cun be the better your odds of hav- ing the majority continuing to grow. You wIII never pIck LIe exucL bottom of a crashing market in the same way you can never pick the exact top of a bull market. Its a fools game to even try, but by following the long time hori- zon cycles and using valuation as a decision making criteria you can assure that you get a safe chunk out of the middle of LIe overuII runge. Your IndIvId- uals stock holdings will almost always immediately drop after your purchase when you follow this strategy, and your account value could stay negative for a few years even. This is because of the very nature of buying in the midst of a falling market, but dont worry as it wont last. Bear markets are usually fast and furious, and the following bull market will always bring the markets back to their previ- ous highs if not higher. Dctid Mces MA protides ueclth mcncement sertic- es to expatriates throughout Southecst Asic, jocusin on UK pension trcnsjers. He ccn be recched ct dctid.mQjcrc- mond.com. Icrcmond UK is reulcted b the ICA cnd pro- tides cdtice on tcxction cnd pensions. R e u t e r s on't Ixpect Moch Irom the Boorse: Ixperts P eople should not pin their hopes on Myanmars new stock exchange even as the government announced plans to launch a share market by October 2015, experts say. Companies who originally expressed interest in forming a stock exchange are now hesitant, citing further capital needs should the government follow through with its plan. PeopIe sIouId noL expect much in the initial stages of a stock market. There will be some trades May Soe San at start-up, but there wont be many companies to trade. Itll be just a murkeL, suId Dr Aung Thura, CEO of Thura Swiss, a local market research and business advisory company. Japan planned to help Myanmar establish its stock exchange but pro- gress has proven slow with delays arising due to LIe dImcuILy In orgunIs- Ing compunIes und hnd- ing suitable premises. Training of government omcers, by DuIwu, u Japanese company, has been underway since 2011 with Japan also sending members of its Financial Services Agency to oversee development. We Iuve gIven LruInIng and also sent people overseas. The Minister of Finance expects the stock exchange to be in place by 2015, but for now we are still seeking companies to IIsL, u source cIose Lo LIe Myanmar Stock Exchange program said. Daiwa Securities Group Inc. signed a memorandum of understanding with the Myanmar government in 1994. In 1996, Daiwa Institute of Research Group and the Myanmar Economic Bank formed the Myanmar Securities ExcIunge Co Ld wILI LIe objective of launching a Myanmar stock exchange. Myanmar Summary _.,.:~..q~ ~~ ... .~:~ ~ :.~ ..~: qee:...~~~.. .: ._e ._~_::...:._. ~, . ~.~ . . , . .:. .~: _ . . :~.~: ~_ .e:.q, .:..:..:..:. .._~:. _._~....~~ . .~.,. . .. :..q.~~ . . ~ . ~ ThuraSwiss - CEO ..|~ ~:.~: . q ~._.:._ . ..~: q e e:...~ ~ ~~ . .|~ . . ~ ._ ~ . ~ .:.~., _e .~_q.... ._.:~_.:. .:.._~~~ .|~..~ q, ~....:.q.,_~_.._e. ._. ~.. :..~: q e e:...~ ~ ~ ~q. ....: . e . ~e . ... .. : ~.q: .~~e ..e . ~ . ~ .~ ~._ . ..:.. .. ..~: q e e:.. .~ ~ ~. . _e. ..'.:, . q ~e ''e ..|~ ~: .~:.q~ .~._.:._. _.,.:._ ..~:qee: ...~ ~ e . . q, ., ~ . . :.q ..: ._ . . .~: ._ ~,...:. ..'e.._.q:~ ._ ..~: . ~.:.~.:q ._~.~.:. q:.e._.,.q: ~._..~:. ~.~_~.,q ._ ~~ ~ , ....~ ~ _e. ..' .:.q.. : ..:....,q_.._e. ._~:. .q._. .~.~:.:..:. ~..|~. ...: ...: . . ~ ~:.._~q~~_.. .~~.,,~...~~q.. ._ ...e ~.~:.. .,_ ... ..~ ~ . ._e~ e . .:.|~e.~~e. ~,.~:~ e: ...~ ~ ..._. .,~ ~. , , _~ .:~~.|.:.~: ...~~~ q. .._...e ~~~ ~.q:e~q...:..| ~e . ~ . ~. q:e .~ ~.,.q : q:.e_...~: .~..~~ ..~:~ q ._. . . . . . . e ~~ ~ . q . ~ .,, .. ...~~ ..~:~..... ~~~ .~_~~.:q.~... . . .|~e .. -e:q ~. ~ ~.~~.~: .~.,, ..,.:.~....,.~ ~.~~ ....~~ ._....:_.. .~: ~ee~:._e..|~e. ~.:.~,.q..._. ...~.:.. ~._ .~. . - e:, ~ _ ~ . . .~,.....:., _~~:_e..|~e. ...~~.~~~..: .~.,, .~:~._.,e..:~,..,_..., . , ._. ..~: e ~ . ~ ~ ~ e . . ~:. . ~:.~ . . ~:.~ ~ .,. ~~.~_~~.:q......:._.. ~:._e . . :. . .,~e :..q .e . ~:~ ~_ . . .,.|~e .. ~....e.~.~:~ .e..., e~ . ~ ~ .qq _ ~:._e ~e e . ~e . ~:~ . _e. .|~e ...~: .q: . ~e . . :.. .. , .~ . ..:~ ~.| ..~:.q. ~ _~ ~ .:q .~ ~e e e . ~ .~....|...e. B lo o m b e r g June 26-July 2, 2014 Myanmar Business Today mmbiztoday.com INVESTMENT & FINANCE 20 WB to Iond $1o,m to Connect Mizorum with Bungludesh und Myunmur Aung Phyo T he World Bank has approved a $107 million credit for the Mizoram State Roads II Regional Transport Connectivity Project to improve transport con- nectivity for Indias land- locked state of Mizoram and to help open up the potential for regional trade among neighbour- ing countries. The Washington-based lender said the project will enhance Indias Mi- zoram and other north- eastern states road links with Bangladesh, as well as with Myanmar, Nepal and Bhutan. BeIng sLruLegIcuIIy Io- cated between Myanmar and Bangladesh, a bet- ter connected Mizoram can open up huge trade potential for the entire northeastern region of In- dia with South and East Asian countries. TIese counLrIes wIII be able to export and import goods cheaper and faster. Consumers will also bene- hL Irom beLLer prIcIng und cIoIces, suId Onno RuII, World Bank Country Di- rector in India. Connectivity is crucial for a distant hill state such as Mizoram which, like the other northeastern states, is geographically isolated Irom LIe muInIund. ong und dImcuIL LrunsporLu- tion routes over predomi- nantly mountainous ter- rain have long hampered trade and development. Stage I of the project re- habilitated over 400 kilo- metres of the states core road network, reducing travel time by half, and LrIggerIng sIgnIhcunL so- cIoeconomIc benehLs In the project area. The link to Bangladesh will facilitate greater bi- lateral trade and access to the Port of Chittagong the nearest shipping port for the northeastern region of India, while the link to the border with Myanmar will facilitate connectivity to Myanmar and the rest of East Asia and beyond, the World Bank said. Mizorams road net- work is of poor quality and under developed, and has among the lowest density in all of India. It faces severe constraints in its connectivity with larger markets. Travel from Aizawl to the nearest Indian port of Kolkata via the congested, 11 km-wide Siliguri corridor, also known us LIe CIIcken`s Neck, Is u 1,q;km Iong journey. Prices for basic staples like rice, sugar, tea and tomatoes can cost as much as three times more in Mizoram and other northeastern states when compared with most In- dian cities or neighbour- ing countries like Bangla- desh. According to estimates, annual intra-regional trade in the region can more than double from $16 billion to $38 billion annually, if barriers to trading with neighbours were removed. Accord- ing to another estimate, investments in transport infrastructure could re- duce trade costs by more than 20 percent in India, and 12.5 percent in Bang- ladesh. The project will fund 91 km of roads that are design-ready. Roads that will be widened or sLrengLIened IncIude: u zz km secLIon oI un- glei Tlabung Kawr- puichhuah road on the border with Bangladesh; the 27.5km Champhai- Zokhawthar road on the border with Myanmar; and the 41.7km Chhum- khum-Chawngte North- South alignment connect- ing to the border roads with Bangladesh to the west and Myanmar to the south. Another 330km of road works may be considered for a follow-on project or uddILIonuI hnunc- ing when the designs are ready. The current project will fund detailed stud- ies and designs for these roads (330km) mostly in the North-South corri- dor. Many of these roads, to be taken up in the next pIuse, wIII be greenheId projects and will increase the connectivity both within the state improv- ing access to transport in- frastructure and services for isolated communities as well as to key inter- national trunk roads and transport corridors that connect to other north- east Indian states, Bang- ladesh, Chittagong Port and the rest of South Asia, and to Myanmar. The bank said the pro- ject will strengthen road safety management sys- tems and initiate pilot projects to demonstrate good practices in road safety engineering meas- ures LIuL eecLIveIy ud- dress road safety hazards. mprovIng LrunsporL connectivity can play a vital role in enhancing growth in Mizoram, a re- mote, hilly, and moun- tainous region where road transport is the only mode of transport wILIIn LIe sLuLe, suId DIep Nguyen-vun HouLLe, senior transport special- ist and the World Banks Tusk Teum euder Ior LIe project. BeLLer connecLIvILy can help reduce freight and passenger transport costs, and provide quick- er and safer access to all parts of the state and to neighbouring states and counLrIes. Myanmar Summary Myanmar Summary Myunmur, LS Hold Iirst Trude, Investment Irumework Agreement Tulk Aye Myat M yanmar and the United States IeId LIeIr hrsL talks on trade and invest- ment framework agree- ment (TIFA) in Nay Pyi Taw last week. The dialogue covered update on Myanmar trade initiatives and policy reform, import licens- ing regime, intellectual property rights and op- portunities for bilateral cooperation as well as ex- panded economic engage- ment between ASEAN and the United States. The opening of the dia- logue was respectively addressed by Myanmar Deputy Minister of Na- tional Planning and Eco- nomic Development Daw eI eI TIeIn und US Deputy Assistant of US Trade Representative for Southeast Asia and the PucIhc KurI EIIers. Aimed at promoting an attractive investment climate and expanding and diversifying trade in products and services between the two coun- tries, the governments of Myanmar and the United States signed the trade and investment frame- work agreement on May 21 last year, creating a platform for ongoing dia- logue and cooperation on trade and investment issues between the two sides. Under the agreement, a Trade and Investment Council was established to monitor trade and in- vestment relations be- tween the two countries, identify opportunities for expanding trade and in- vestment and identifying issues such as strengthen- ing of rule of law and pro- moting transparent and corruption-free public in- stitutions and the protec- tion of intellectual prop- erty rights, workers right and the environment. Following the easing of sanctions in 2012, the United States claimed that Myanmar-US bilat- eral trade has been in- creasing but still remains small. According to Myanmar omcIuI sLuLIsLIcs, Myun- mar-US bilateral trade reached $104.44 million In LIe hscuI yeur zo1-1q which ended in March, of which Myanmars export to the United States stood at $24.78 million. US Department of Com- merce has also disclosed that as of the end of April, US companies had in- vested $243.6 million in Myanmar and US exports have increased from $9.8 million in 2010 to $145.7 million in 2013. A worker drives a road roller during the construction of a road link between India and Myanmar at Wang- zing village, south of the northeastern Indian city of Imphal. R u p a k
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June 26-July 2, 2014 Myanmar Business Today mmbiztoday.com INVESTMENT & FINANCE 21 Myanmar Summary Myunmur: Adjosting Ior Growth in The Iinunciul Sector A uthorities in Myanmar are determined to foster economic progress und Iuve pIuced hnuncIuI inclusion on their list of priorities. In an attempt to tackle demand for Increused hnuncIuI services, Myanmar has taken numerous steps in the last 24 months, such us udopLIng u ouLIng currency, liberalisation of the insurance industry and the independence of the Central Bank of Myanmar (CBM). Following these adjustments, 2014 is set to see the CBM grant operating licences to foreign banks, while 2015 has been set as the target date for the establishment oI LIe Yungon SLock Exchange. The unbanked populati on According to a recent joint study by the UN Capital Development Fund (UNCDF) and the UN Development Programme called Making Access Possible (MAP), only 4 percent of families surveyed have bank accounts in their own names, 39 percent have no access to any kInd oI hnuncIuI servIces while 31 percent opt for unreguIuLed hnuncIuI assistance such as money lenders or borrowing money from family or friends. Sponsored by the UNCDF and the multi- donor IveIIIoods und Food Security Trust Fund (T), LIe zo1 MAP survey covered 5,100 households and suggested that while there is strong potential demand for regulated services, currenL producL oerIngs do not match the needs of the unbanked population. MIcrohnunce InILIuLIves are being undertaken to address the issue, and Dr Maung Maung Thein, the deputy minister for hnunce, unnounced uL the Financial Inclusion Roadmap Conference in Nay Pyi Taw in May that the ministry aims to increase the banked Michael Nesbitt population from 30 percent to 40 percent by 2020. Br anchless banki ng In an attempt to increase uccess Lo hnuncIuI services, many local banks are opening branches in ruruI ureus. However, critical momentum for hnuncIuI coveruge Is onIy expected to be gained once infrastructure improvements are made within the telecoms sector. Similar to other emerging economies, local banks are positioning LIemseIves Lo oer mobile banking services. U Pe Myint, managing director of CB Bank, LoId OBG, TIe mujorILy of people have limited access to the internet. Mobile banking gives our people the chance to do their banking activities wILI greuLer euse. With two international telecoms providers set to launch their services in 2014, Myanmar is well positioned for a rapid rise in both mobile penetration and mobile banking activity. TIe IuLure oI personuI payments in this country is SMS banking, similar to success stories in Africa, such as Kenya where mobile banking plays a mujor roIe, Joe Burker- Bennett, a consultant for Tun Foundation Bank, told OBG. For ei gn par ti ci pati on According to the Myanmar Investment Commission, approved foreign investment nearly tripled to $4.1 bIIIIon In zo1J1q hscuI year from $1.4 billion in the previous year. With an expanding economy and underdeveloped banking system, many international banks are vying for an operating licence in the once IsoIuLed nuLIon. However, feelings are mixed, as Daw Kim Chawsu, head of transformations at Kanbawza Bank (KBZ), LoId OBG, TIere ure two trains of thought. First the entrance of foreign banks will assist in the development of the sector, and second that they will squash local competitors out of LIe murkeL. SIe udded, ocuI bunks cun benehL from this development. Infrastructure, funding, technology and expertise are all things that international banks bring Lo LIe LubIe. Foreign banks can only enter the market in the form of representative om ces uL presenL Iowever the CBM plans to grant beLween hve und 1o IIcences LIIs yeur. ocuI media reports suggest that the newcomers will be faced with certain restrictions, such as not being allowed to engage in retail banking or dealing uniquely in foreign currency. Although local banks may be concerned by the possible role of foreign-owned banks in the future, there is some recognition that their presence may also encourage international companies to invest in Myunmur. U TIun wIn, the deputy chairman of KBZ, LoId OBG, oreIgn banks should be allowed in on a step-by-step basis. This will assist with the development, as well as the protection, of the secLor. WIIIe LIe hnuncIuI sector in Myanmar is still decades behind its ASEAN neighbours, progressive steps within insurance, accounting and telecoms place the country in good stead to leapfrog years of technology and establish a modern banking und hnuncIuI servIces IndusLry. However, this depends greatly on the CBMs decisions regarding the entrance of foreign banks and the restrictions they will face. Michcel Nesbitt, editoricl mcncer jor Mcnmcr ct Dxjord usiness Group (DG), is in chcre oj producin sector specijc resecrch in Myanmar. Based in Yangon he works clonside c tecm oj cnclsts to produce OBGs Flagship annual reports uhich oger unique insihts coupled uith c comprehensite retieu oj intestment opportunities in key routh sectors. The Visa Inc and Mastercard Inc logos are displayed on the side of an automated teller machine (ATM) as a customer withdraws money at a shopping mall in downtown Yangon. D a r io
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MAP ...:. ._ ~..:...|. ~~~ ~:. _...._.._e._.. .~q . . ..: . .:.._ ~ . . , . . .~..q._..:.- .~..~. ~~_..q... .|. June 26-July 2, 2014 Myanmar Business Today mmbiztoday.com INVESTMENT & FINANCE 22 Myanmar Summary TM 2 colx x 26 cm Giti Notice Iirst Commonity-bused Toorism Initiutive Annoonced Ior Kuchin Ministries join hands to support responsible tourism in Indawgyi Lake A new ecotourism initiative will be developed to en- sure visitors to Indawgyi uke WIIdIIIe SuncLuury in Kachin state contribute positively to its ongoing conservation manage- ment, a nature conserva- tion group said. HIgI IeveI represenLu- tives from the Ministry of Environmental Conser- vation and Forestry and MInIsLry oI HoLeIs und TourIsm (MoHT) joIned hands to agree on the im- portance of engaging local stakeholders in develop- ing a tourism strategy for the lake and its globally important wildlife. VIce MInIsLer oI MoHT, Dr Sai Kyaw Ohne, said that creating a responsi- ble, sustainable tourism strategy that involved and engaged local com- munities could prevent mistakes that have been made during the devel- opment of other regions, IncIudIng nIe uke, LIuL can lead to serious envi- ronmental degradation. TIIs progrumme cun help to support everyone who lives here and is a good example for other communities in the coun- try, other countries in the region, and in fact other purLs oI LIe worId, Dr SuI Kyaw Ohne said. A workshop to discuss the new strategy was held, involving local commu- nity representatives, the Myanmar Tourism Feder- ation and Myanmar Tour- ism Association repre- senting the private sector, and relevant government agencies. Wai Linn Kyaw Attendees agreed on a vision for responsible tourism development at nduwgyI uke LIuL wouId help to conserve the natu- ral and cultural heritage of the area, while provid- Ing reuI economIc benehLs to local people. The workshop builds on the momentum created by Fauna & Flora Inter- nationals (FFI) launch of a community-based eco- tourism initiative at In- duwgyI uke IuLe IusL yeur. FFI helped commu- nILy members Irom on- ton Village at Indawgyi uke Lo Iorm 'nn CIIL TIu - overs oI nduw- gyi, a community group dedicated to support local livelihoods through the development of ecotour- ism. FFI has provided train- ing to the young villag- ers, as well as kayaks and mountain bikes that can be rented to tourists to explore the beautiful na- ture of the lake and its surrounding forests. We ure supporLIng sustainable ecotourism which creates revenues Ior IocuI communILIes, says Frank Momberg, FFI Myanmar Director. TIe kuyuks In purLIcu- Iur oer u nuLure experI- ence in complete lake se- renity, instead of joining the tourist hordes in noisy moLorbouLs on nIe uke, which is Myanmars most vIsILed nuLuruI sILe. Before FFIs Inn Chit Thu initiative, Indawgyi tourists could only expe- rience the lake through an expensive motorboat ride now tourists can choose kayaks, bicycles and walks instead, having an opportunity to feel closer to nature, and without us- ing noisy, unsustainable and expensive methods. Despite quadrupling visitors since the launch of Inn Chit Thu, inter- national tourists to In- duwgyI uke remuIn very small, an area the group hope to build in coming seasons. nduwgyI uke Is sLIII In a pristine state with thou- sands of migratory birds arriving each winter from their long journey start- ing in Siberia for resting and wintering in Indaw- gyi, turning the lake into a heaven for bird watch- ers and nature tourists. It is hoped that by following a strategy for responsible tourism in a protected area, tourism can help to balance the needs for nature conservation and economic development. ~._._,eq ~..~:_~. .~:,.~q.:,....~:. .:..q:~._.~._ .q. ._ . :.~ ~. .|...~ ..:q~.~q..: .:~ .~ ~, .~ , .. . ...: .q :~ .q....,..~ ~., ~~e . ...| ..|~ _ . ._ e .q .. :.. . , .._ .. . ... ~.q.~ ~..~.:. e_e. ~.~~...__e.._. ~..~:_~.~,. ~..| ~, -~. ~. :. . . q: ~.q..|..: .~:,.~q.:, . :.~~ ~ .q .. :.. . , . ,_ .-e:~. . e _e .~ .~~ .q. ~ .....~...~.~. .:.. _....:q~_..- ~.q..|.~ ~~~~....|. ..:q~._~..: .~~,. ~ , .. . ..q.. .. .~: .q.q:~,_~._:,. e~e. .q..:..:.q.~,_~._:,~. ~. _. ~ e .:.. e .:.~ ..:~ _ . _~._ .~:~, . ..:~. e _e .~ .~~ ..: .q..:...,.~~~ ,_. -e:~..e,~._... e. . . , .. ~ .... _._ . . -. ...| ..|~ ..: q ~ . ~ ~....~, ~.|~~ ~_.:. ....:.-e _e .~ .~~ . . . , . .:...: q ~ . ~.~:~~ . .:~.~ ~, .~ ~. , ~. . ee..~...~.~_... ..: ~.:..:._..._....~ ~:~e.._e e~e. .q . . :. .:.q. ~, _ ~ . _:, . ~ e~, _~ ...|~ ~:. ..~: ~,.~ ._.:._. 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O le s e n / F F I June 26-July 2, 2014 Myanmar Business Today mmbiztoday.com PROPERTY & REAL ESTATE 23 Ioreign Iirms to be Allowed in Roud und Bridge Constroction Myanmar Summary F oreign companies are to be allowed to bid for road and bridge construction con- tracts thanks to changes in rules from the Ministry of Construction. In the past, only local companies were allowed to invest through Build- Operate-Transfer (BOT) agreements with the gov- ernment, while it was mandatory for foreign hrms Lo LIe up wILI u IocuI partner. Foreign investment in the construction sector currently stands at $37 million, with South Ko- rea, Japan, Singapore and Thailand being the high- est investing countries. Domestic investment stands at K733 billion ($751 million), according Lo omcIuI duLu. AccordIng Lo LIe or- eIgn nvesLmenL uw, construction was limited to foreign companies col- Phyu Thit Lwin laborating with local companies. Now, with foreign companies bid- ding for road and bridge construction local compa- nIes wIII hnd IL u bIg cIuI- Ienge, IocuI consLrucLIon businessperson U Paing Soe Yur Kyuw suId. The lack of skilled work- ers and access to technol- ogy deters local business- es from infrastructure development programs, industry insiders say. The Myanmar Construc- tion Business Association said it intends to tackle skills shortages through training programs. Hoosing epurtment to ruw New Town Pluns Myanmar Summary _., .:. ~ . ..q~. . , . . ~~ q ..:_. _ .. :.~:. _. -q e:. . . q, _. _.. . ~ , ... .:.~ .q.. .~ q ._ e ..:~ . . .q.~, _~ ._:, Mahabandoola bridge in Yangon. The Department of Human Settlement and Housing Development (DHSHD) is formulating urban man- agement strategies to cope with Myanmars growing municipalities. .. .~ ~:...:~ . . .q. . . , ..:.~ e. ~_._ ~ . ..:~ ...q.~.~.:.~ .: ~ ~ .,. _e . . ~ ..: q ~ ._..q:. e.~.| ~..| . . , ..:._ . _.:...:~ ...q.~.~.:.~.| ..~ . _..~: ._ _e. ._~: . ..:~ ...q.~,_~._:,. .q._. W a i L in n
R o s s in any town plan. If we implement this project, we require properly im- plemented technology und InvesLmenL, suId Dr Kyuw uLL, cIvII engIneer- ing expert and the advisor to the Myanmar City Plan und secreLury Ior LIe Yun- gon City Master Plan. After drafting the new projects, the department intends to implement sIorL-Lerm (hve yeurs) projects in Mandalay, Mawlamyine, Meikhtila, Taunggyi, Moe Gok, Pyin Oo wIn und Bugun us u priority. Remaining cities will be dealt with in the long- term (30 year), with these projects requiring addi- tional technical support from overseas. _. q :. ~ .~ . e _e ..q. .. ._:, . .q._. ..~..:..:._ ...q ~.~~,:~_._. ..~,.~...:..q...,_.. _e. _. . ~:.~ ~:.q _ e _ .....~: ..:q~.:.._ _e.._. . . ~ , .~.. .q.. _ . .q .. ~ ~ _..e ._. .. . . , . .~._..~.~:~_.e:.: _e. ~e .. . ~ , .~ . . . ~~ . ~_. ..~ .q.. e . . :.~e '' e _.q:.~.~.e_e..q.... _:,. ,_~:..q...~..~ ._.:._. T he Department oI Humun SeLLIe- menL und HousIng DeveIopmenL (DHSHD) has released a draft plan detailing urban manage- ment strategies to cope with populations exceed- ing 100,000 people in growing municipalities. The department, which is under the Ministry of Htun Htun Minn Construction, says the plan for new towns aims to direct and manage pop- ulation growth in both the short- and long-term. Once we hnIsI our draft we will submit it to the president. We will then implement the pro- jecL. We expecL Lo hnIsI the drafting of the plan IuLer LIIs yeur, u dIrecLor of the department said. The current draft in- cludes the expansion of existing town and city footprints, land man- agement, new roads and housing zones in conjunc- tion with economic devel- opment for 32 townships, which have populations exceeding 100,000. We cunnoL jusL ex- pand a city. We need to manage according to its area. Transportation plays an important role June 26-July 2, 2014 Myanmar Business Today mmbiztoday.com 24 PROPERTY & REAL ESTATE Myanmar Summary Jupun to Lend $m to Boild Thuketu Bridge J apan is going to pro- vide 4.22 billion ($41.25 million) to build a new bridge in Tha- keLu In Yungon, Jupun n- ternational Cooperation Agency (JICA) said. Under the grant, a new four-lane extradosed type bridge and access roads will be constructed. TIIs brIdge, LIe hrsL oI its kind in Myanmar, is to have 253 metre length with construction starting April 2015. The Public Works de- partment, Ministry of Construction, will con- Zwe Wai struct expansion of ap- proach roads to the new bridge, JICA said. The project aims to en- sure better mobility and accessibility in greater Yungon cILy, conLrIbuLIng to smooth transportation to cope with increases in economic activity and rupId Lrumc growLI In Yungon CILy und ILs sur- rounding area. The agreement was sIgned by U Kyuw Inn, managing director of Public Works, Ministry of Construction, and Masa- hiko Tanaka, chief repre- sentative of JICA Myan- mar. Pansodan bridge in Yangon which connects downtown to Thaketa. W a i L in n
K y a w .,. .~~:....|. ..: q ~ .q. .~ . ._ q,~,~. .:.~~_.,e ~ ~_ ..:~ ._ ~ ~:... ~~~ e,.. , ... .e ~..q~,..'.: ,~ ... .,., ~_.:~. .:.._e .q._. ~. .|~ _ . . .. _e ..... . . :.~ ~:... ~ .:._ ~~ . . . -_. .~ .~ ~_ ..:~ .:..__e.~: e.~~:.- ~q_.: , .~:q._e .q._. ~. .| . . ~ , . ._ .e: q, ~ , _. ~~ . _., .: .~ . e .q.~_~ . e ~ . : .~ . e . :.. q, ~~ ~ q_qe_...,:~.: ...:..q. e _e .~ .~~ .:_. ..,:~ . . ~. ., ~_ .:.. . . :._ .:..: ._ q, ~ , _. .~: .~ ~, .~ -qe:~ e:._~:.~.. ~ ..:..q, q_qe._ e J ICA . ._~_:.._. ~. .|~ ~:.~_ ..:~ .q. ..~,.~~~ ..:~...q. ~,_~._:,.,.,..|,~~: ..~: . .. JICA Myanmar - ~ e .:. .e ~_ ~ . ~~ .:.:e ~ ~ ~ ..:~ .~ . ~ .q. .. _~_. ._e. ._ . Chinu's Property Murket Muy Not Be As Bud As It Looks T Ie hrsL IuII In CII- nese home prices in two years has crystallised worries of a messy end to a housing boom, but some analysts say fears of an imminent collapse similar to that in the United States after the sub-prime crisis are over- blown. The property market Ius dehnILeIy been sIow- ing this year, and is cited as one of the main risks to the health of the worlds second-largest economy. But high down pay- ments, low household debt, some government support and expecta- tions of more to come have some experts fore- casting the downturn will be short lived, with prices expected to recover as economic growth steadies in the second half of the year. Average new home pric- es across 70 cities fell 0.2 percent in May from April, and the annual rise of 5.6 percent was the slowest in 13 months. Prices fell on a monthly basis in 35 cities, omcIuI duLu sIowed. I you Iook uL CIInu from the balance sheet point of view, the only balance sheet that has not been destroyed is the IouseIoId buIunce sIeeL, said Bo Zhuang, an econ- omist at Trusted Sources, a UK-based investment consultant. Xiaoyi Shao and Koh Gui Qing L Is LIe mosL IeuILIy balance sheet at the mo- menL. The International Mon- etary Fund agrees. In a paper published in April, it ranked China as having the fourth-lowest level of household debt among 11 Asian countries, at around 12 percent of its gross domestic product (GDP). In New Zealand and Australia, where house- holds are the most indebt- ed, debt levels exceed 90 percent of GDP, IMF data shows. Downpayments of 30 percenL Ior hrsL Iome purchases and between 60-70 percent for second homes, and laws which make borrowers liable for debts even if they de- fault on repayments have banks viewing mortgages as among their safest as- sets. It also means those who fear that a sharp decline in home prices would rock CIInu`s hnuncIuI secLor by inundating banks with bad debt may be overstat- ing the case. Further, a reduction in the amount of reserves that banks must hold to boost lending to small hrms und LIe Iurm secLor has inadvertently freed up some cash for the proper- ty sector. unds ure IIke wuLer, said Fan Xiongchong, vice-president of Sun- shine 100 China, a mid- sized developer based in BeIjIng. EvenLuuIIy, IL wIII more or Iess ow InLo the property market via vurIous cIunneIs. Not wi thout r i sks This is not to say the housing market, which accounts for about 15 per- cent of GDP, is without risks. For one, despite the moderation this year, prices are still near record IIgIs und uordubIIILy rates near an all-time low. Construction has also fallen sharply this year, wIIcI wouId uecL em- ployment and spending. The statistics show that Wenzhou, a wealthy city with a thriving private sector, has been hardest hit in the current slow- down with prices down 4 percent in May from a year ago. Experts disagree about the extent of housing oversupply in China, but agree that slower prop- erty investment would be a drag on the economy. A sharp drop in home prices would destroy household wealth, undermining con- hdence und spendIng. ComIorL comes Irom the fact that we see the Chinese government tak- ing action - they are not oblivious to what is hap- penIng, suId ondon- bused YerIun Syzdykov, an emerging markets debt fund manager at Pioneer Investments. TIuL`s wIy LIIs 'sLop- go policy... on one hand LIey wunL Lo cooI o LIe market, and on the other they dont want it to hurt growLI, Syzdykov suId, referring to earlier and prolonged government attempts to rein in red- hot home prices. No bi g cr ash The biggest problem is a misallocation of resourc- es, suId TIng u, un econ- omist at Bank of America- MerrIII yncI. With only about one- third of the 1.3 billion population living in ur- ban centres, too many homes that will never be hIIed Iuve been buIIL In small cities. That would likely see a sharp spike in bankruptcies among smuII deveIopers, u suId, buL wouId noL cuuse u bIg crusI. Wages in China are still growing faster than house prices, with average in- comes in cities and rural areas climbing 10-12 per- cent last year, on par or faster than a 10 percent rise in property prices. TIIs Is u cycIIcuI correc- LIon, suId RoseuIeu Yuo, an economist at Gavekal DrugonomIcs. We see no signs of imminent col- Iupse. Reuters Myanmar Summary B lo o m b e r g . , . ._ . . . . ~~ . ~e , ~ ._ . ~~ .:. ._ ~q~.-~._.._. ....,. .:.._..:~.:._.. _...| .~q ~ . _. ._.... , ..:.. : ....-_..~~. ~. q:..,._.~~.:..._. June 26-July 2, 2014 Myanmar Business Today mmbiztoday.com AUTOMOBILE 25 Myanmar Summary Myanmar Summary Police Lnits Turget Trumc Violutors to Corb Gridlock I n un eorL Lo uddress some oI Yungon`s worsL Lrumc grIdIocks, nIne police groups stepped up enIorcemenL, IssuIng hnes Ior Lrumc oences In sevenLy-nIne IocuLIons wILI mujor Lrumc problems, according to Second CIIeI PoIIce Omcer Inn HLuL. The police groups will take action against cars that violate Lrumc Iuws sucI us IIIeguI purkIng and reckless driving, he said. DrIvers cuugIL vIoIuLIng Lrumc Iuws wIII be hned beLween K10,000 and K500,000 ($10 to $500) depending on the violation. Drivers issued citations must puy LIe hne dIrecLIy Lo Yungon City Development Committee (YCDC). Inn HLuL, wIo Is uIso LIe Heud oI No.z Lrumc poIIce unIL, suId, TIe nIne Lrumc poIIce groups will cooperate with police units from township administrations und YCDC In order Lo remove illegally parked cars. Ines Ior IIIeguIIy purked curs will vary and can range from a warning to suspension of their drIver`s IIcence. Curs purked In a designated no parking zone will be towed, he added. Kyaw Min From the end of 2013 through May of this year, nearly 1,900 illegally parked cars were Lowed, uccordIng Lo un omcIuI unnouncemenL Irom LIe Lrumc police unit. During the third week of Muy, Yungon suw q,oq1 Lrumc violations. From end-2013 to April 15, 2014, 8,154 cars were towed from no parking zones, the Vehicle Control Committee announced. q, ~ , _. -e: ._~:~. ~_ .._ .,q: .~ ~, ~ q~. .~~: e:,.q~.e ~e~.e._ e: ._~:.~..~ ._eq.....:..__e. ._~: . ~. ~ e: , .q ~. e . . . .q.._~..._~ ._.:_~:.._. e: , .q ~. e ~ .e ._ q, ~ , _. - e: ._~:~. ~_ .._ .,q: . ~ ._.~...e:q.,:._.. ._. ~. .. . :..: .. _. ..._ ._ .~. .. ._e:.:.~ ~.q.e.:..__e. _. . ._ .~. .. ._ e: .:.~.,_e ~..,._~...'.~__ .~. ~...:.. |..,.~ q,~,_. .~: ._ . .:e:.q..~: .~ . ay;aqmif &rnf jzpf aMumif ; ,if ;u quf .~._.:_~:.._. .q.._~..._~ e....~~e ~ e:,.q~.e_.,e~....q. ..,. q,~,_..~:._..:e:.q. .~: .~ ,e ._ .. q ~. e .~:.~ ....|._.. e....~:.~ _...~:.|. .~ . ..: ~:~.~: q, ~ , _. .~: ._ . .:e:.q..~: .~ ~ . .~ . ..: q~:. ._ .~. .. e: ~..'. ~_ _. . _.. .~ .~ ~. .. . ~ _.:._.:.,:.. q ~e . .. _e~ ~: .....~: .~.,~~:.._e ~.q.e . ~. .. .q .|~e ''e ._.: _~:..._. q,~,_.~ e.~.| e:,. q ~. e ~.,_e .q. ,:.q.,q:.:. .~.~_.. e:.q.,:.q.,q:~ e:q.,:..|~ ~q,._e eeq:..q ._~:. ~~, .....:.... ... ~,~ e:.q.,:.q.,q:~ q. ..: ._.~...e:.:. eeq:..q. e: ~.q~~ ~ . : ..: .~: ~:.~. . .q ~~~ ,..|.q_._e.._~:. e: ._.~..,.....q.q~.e. ~ _.,:..~.:.~q .q._. ...~~e.~ q,~,~ e: ._.~...e:~e~. ~~ ._e..:.. _.. ~~, ... ..:.... .~~: ~~, ... -_. ~ q~.,~ e: .q. ,:.q.,q:~ q. ,:...: e: . . .q ~, .~ ~q,._e eeq:.. ._~:. . q._ . Sukoru to OHer Iree Cur Servicing Myanmar Summary S akura Car Sales Cen- tre will give buyers who purchase cars from the centre free vehi- cle services for one year, a compuny omcIuI suId. The centre opened on Kabar Aye Pagoda road last month with new auto- mobiles and used cars for sale. Over 90 percent of the automobiles at the centre are Japanese, 80 percent of those vehicles manu- factured by Toyota, the companys director Ko Kyaw Min Zaw Aung said. By provIdIng cusLomers with maintenance and sup- port services, we hope to increase consumer interest In LIe busIness, Ie suId. Sakura will provide in- surance to customers who purchase cars from its dealership with cost de- pending on the type and age of the vehicle sold. The company will co- operate with the World Treasure Bank to organ- ise the long-term install- ments of these agree- ments. But another car dealer .:~ q:~:.~.q: .. ~:. .q:..._~.._._..~:..:. ~ ~...~~. ~.._.. .... :.._ _e. ._~: . .:~ q: ~:.~.q: .. ~:. .|, ~ ~: ~~e~ ~.~:.~:.~: ~ ._.:._. .:~q:~:.~.q:..~: ~ Brand New ~:..:. ~_. .,.. ~.._._.. ~:..:.~ .q:......:.._ _e._.. ~..|~.q:._..,.~ .., q~ ., ~ ~. :.~. q:. .. ...'~ e . . . ._~: . .q._. ~ . ~ q ~ , e: Service ~e ~., ~ _ _. . ~. . . Free Service ....|~e. ~:.. .~ .~ _ , .. . .q._ Plan .~~ Train .._.. ~~ . ~:~~. ~~ , . .~ Free Service .... :.. :.|. ..: .~: ~:.q ~_ .:.. . e . ~. ~ ~. ..~ e ~. ~ ~. ..~ ~ .. ~. . . ~~ .. q ~.. ..e_......:..:.|''e ~ .~: .~: .~: ~ ._.:._ . .~ q .:~ q:~.q: .. ~: ~ .q:...,._ ..:.~: ~:..:.- q:..,. ~ .~: ._ ., ~:..:._e. _. . ~. .| .,~:..:.~ ~e~:~:. ~..~.:..:..: q:..,. ~ ~.|~._~:. .q._. Ko Aung Thein said de- spite the improvements in Myanmars car industry it will take time for consum- er demand to increase. TIe probIem Is noL eve- rybody in Myanmar can purchase a car. People earning low in- comes jusL cun`L uord the cost of purchasing und runnIng u veIIcIe, Ie said. Jupun Pluns Ample Sopport Ior Ioel Cell Cur Technology T he Japanese gov- ernment is plan- nIng Lo oer umpIe support to popularise fuel cell vehicle technology as Toyota Motor Corp and Hondu MoLor Co prepure to launch hydrogen-pow- ered cars in 2015. The government drafted a timeline that spelled out targets and actions over the next 25 years to com- mercialise fuel cell vehi- cles and boost use of hy- drogen energy in general. The move comes as Jupun`s ruIIng IberuI Democratic Party consid- ers supporting the tech- nology through subsidies and tax breaks, so that by 2025 fuel cell vehicles can sell for around $20,000 or a little more, the same price as popular gas-elec- tric hybrids. A fuel cell vehicle, which runs on electric- ity generated from cells that combine hydrogen with oxygen, emits only water vapour and heat. Yoko Kubota TIe veIIcIes cun run hve times longer than battery- operated electric cars, and their hydrogen tanks can be hIIed In jusL u Iew mIn- utes. Reuters ~~ ...~ .,~..q ._ .~q~.,_ .q.,..:. .~ q ._ eqe . . ,_.._: ~. ._. ~:..:. ~ . . .q. ~~~ ~:.~.~..._e.._ ~ e ~:. e , . ...: .~: ~:. ~ . ~ ~ ~:..:.. :~ _ .:~ . q, ..:.._e .q._. ~..q- .,.._..:_~: .,~ ~_.,...:._~..~q .:._ ..~ .,. ._ eqe....:.~:e: .:.~ ...:..q.~q ~.. .q: ... q, q_ q e :.._ e.q._. eqe..~:..:.._ .. .. .:~~:._e ~...._.. e~., . .~:~ . ..| . .. _..: .. q~:.q. . ~. ~ .: ~ . ~ ..:~:..:._e. ._ . Trafc on Kabar Aye Pagoda road in Yangon. S h e r p a
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H o s s a in y June 26-July 2, 2014 Myanmar Business Today mmbiztoday.com 26 AUTOMOBILE As Western Aotomukers Imbruce Alominiom, Asiu Still Welded to Steel Aluminium demand by Asias auto industry seen up 71 pct by 2016 A bout four years ugo, HyunduI Mo- tor considered shifting from steel to alu- minium body parts for its Genesis sedan to make IL IIgILer, more IueI-em- cient and more competi- tive with German luxury marques, two people fa- miliar with the matter said. Ls umIIuLe KIu MoLors made a similar move, building test versions of its premium K9 sedan, called K900 in the United States, using aluminium in body panels including the door, hood and trunk lid, two other people told Reuters. But the South Korean duo, which together rank hILI In gIobuI uuLo suIes, opted for steel instead, deterred by the cost and, according to two of those individuals, hamstrung by close ties with sister steel- muker HyunduI SLeeI Co. As western carmakers such as Audi AG and Ford Motor Co lead the way in using aluminium, which is lighter but more expen- sive than steel, their Asian rivals are reluctant to in- vest in the costly retool- ing required that would disrupt existing manufac- turing processes and sup- plier relationships. A reuIIy bIg cIuIIenge uL the moment for the Asian compunIes Is Lo hnd ouL how they should behave in this context of vehi- cles coming under more pressure Lo be IIgILer, said Truls Thorstensen, president and CEO of EFS Business Consultancy. Automakers in Asia often prefer evolution- ary upgrades that en- able them to use existing plants and make multiple models on the same as- sembly lines; western ri- vals tend to make whole- sale product changes that require re-engineering of factories. Thats forc- ing Asian car companies Lo hnd oLIer wuys Lo cuL weight and emissions as tighter US and European fuel economy and emis- sions rules drive a push for lighter cars. Hyunjoo Jin and Meeyoung Cho I you ure Iree Lo do whatever you want, the decision might be easier to go in the direction of al- umInIum or IIgIL weIgIL, Thorstensen said. HyunduI decIIned Lo comment on what ma- terials it considered in product development. At Kia, a spokesman said the company did not use aluminium body parts in K9 test versions, and declined to comment on whether it considered us- ing the material during the cars development. Ri si ng demand Aluminium demand by Asias auto industry is ex- pected to rise 71 percent by 2016, far below a pro- jecLed hve-IoId jump In North America, accord- ing to an internal forecast by Atlanta-based Novelis Corp, the biggest maker oI uL-roIIed uIumInIum und u unIL oI ndIu`s HIn- dalco Industries. In 2016, Asia will ac- count for less than a tenth of total auto industry aluminium consumption, while North America and Europe will have about 45 percent each, Novelis predicts. Thats despite expectations that Asia will continue to account for over half of global vehicle ouLpuL, uccordIng Lo HS Automotive. TIIs subsLILuLIon Irom steel is being driven mainly by strict emissions regulations, especially in North America, and is a game changer for the aluminium rolling sec- Lor, suId CIurIIe DurunL, senior consultant at CRU, u meLuIs consuILuncy. n Asia, the emissions regu- lations are less stringent and vehicles tend to be mucI smuIIer. TIe reIuLIve cosL oI uIu- minium sheet is seen as a prohibitive factor, so its in regions with the most stringent legislation ... that this material will be mosL wIdeIy udopLed, Ie added. European luxury brands such as Volkswagen AGs Audi and BMW AG are expanding their use of aluminium in high-end, high-margin cars. Ford will begin building its . , . ._ . . ~,_ .e ~ e , . ...: ~:._ , .~ ~ . . ..: . . ~:..:.- .: . .:.~ . . ..| .|..~: ..~ .,q:~ ~. . , e .: . .:. _e ~.:. .q, . . . _. . ..: .: . ~. ._ . . . . .~ .:._ :., ~ . . ~:._e. ._ Marques . . . e _. . q, _ .. . . ._ . _. ,.-..,.~ Kia ..:~:._._. e.~. _...._.. ~..q~,~ K 900 e . . .:.._ k 9 . . ~:..:.~ ~..,e.:. .:.~ ..... _ . .. ._ . ~. : ..: .~: ~:..q: ..q. ...~~~ ,.|~ .,q:_ ...:.,._ ~..| .~: ~ q .e:...: .~: ~:.~ . ~ . . . ._ , .~ -~:..: . .:. ~ ~..,e_e ~.:..q, . . .,_. . ~.,:~ ~ .~:..:. _e.._ Audi . Ford um; .:.~. ....|.|..~: .. ..:q, ...~q._. ~:q..:.~:~:.~.~.~ .~ ~..:q . .,q~ ~_~ . ...,..'.~.~: .~q ..: .~: ~:..~ ~ . _. ..~: ..|.|. .~: e...q...~: .|. ''e EFS. .. :..q.~~ . . ..,.-~_.. ~ .~ _e. . Truls Thorstensen u ._.:. ._ . ~:q..:.~:~:...,.- ~. . , e . ~. . ~ ._ ~~' ...~ ~ q:..,. ~ .~~ .:._ e ., . , .:. ._. ugsIIp -1o pIckup with an aluminium body later this year, making it LIe hrsL sucI muss-mur- ket vehicle. HyunduI, ToyoLu MoLor Corp and other Asian au- tomakers, however, most- ly produce mass-market curs on IIgIIy emcIenL assembly lines that are often decades old. They dont sell luxury cars in high volumes and cant demand the sorts of prices that Audi and BMW can. Aluminium can cost some four times more than steel, although aluminium is up to 30 percent lighter than conventional steel and 15 percent lighter com- pared to advanced, high- strength steel, accord- ing to consultancy Wood Mackenzie. A switch to aluminium increases not only materials costs but requires heavy invest- ment to overhaul produc- tion lines. I you sLurL mukIng u compIeLeIy dIerenL ur- cIILecLure Ior exus Irom ToyoLu or nhnILI Irom Nissan, you will get into a cost problem because the numbers sold and the premium price they get is not similar to the Germuns, TIorsLensen suId. AII munuIucLur- ers in Asia face that same problem. They cant get the premium price so they have to be much more cureIuI. Heavy Hyundai The previous version of HyunduI`s GenesIs Iud an aluminium hood, but the company switched to steel for the current mod- el, launched in late 2013, making it heavier and less IueI emcIenL LIun ILs pre- decessor, two of the peo- ple said. An aluminium car hood weighs about half of one made of steel, according to Novelis. Every 10 per- cent reduction in vehi- cle weight improves fuel economy by 6-8 percent, according to the US De- partment of Energy. n zo1o, wIen Hyun- dai began developing the current-generation Gen- esis, shaving weight and increasing fuel economy was a concern, said one of those familiar with the matter. At a meeting at the au- tomakers research center on the outskirts of Seoul, engineers proposed ex- panding the use of light- weight aluminium from the hood to other outer body panels and even frames, said the person, who was present. But HyunduI wenL In LIe op- position direction, swap- ping aluminium with steel even for the hood, because of its ties with HyunduI SLeeI und LIe higher costs associated with aluminium. TIIs wus u sLep buck- wurd Ior HyunduI, LIe person said. The latest Genesis gained as much as 390 pounds (177 kg) from its predecessor, launched in 2008, and weighs 181 pounds more than BMWs rival 535i. US chief Dave Zuchows- kI suId HyunduI Ius puL a lot of additional weight InLo sLrucLuruI rIgIdILy to pass tougher US crash LesLs. We used Lo suy wed like to reduce the weight in the car 10 per- cent as we bring them out. In this world, with ... crash requirements and things like that, youre not going to be able to do LIuL, Ie LoId reporLers In Detroit last month. Str onger steel Instead of embracing aluminium, Asian au- tomakers are working with steelmakers to de- velop lighter, stronger steel, while taking other measures to improve IueI emcIency IncIudIng upgrading conventional engines and parts with- out having to make heavy modIhcuLIons Lo munu- facturing facilities. HyunduI MoLor Is un- der enormous pressure to cut costs since its a vol- ume, mass-market car- muker, Woo Yoo-cIeoI, president and CEO of HyunduI SLeeI, LoId Reu- Lers. TIe mosL ImporLunL thing is to stay competi- tive in the market. They believe it is much more competitive to use steel Ior LIeIr ugsIIp modeIs. For now, Japanese car- makers limit aluminium mostly to parts of hybrid and premium vehicles, sucI us ToyoLu`s exus S. Hondu MoLor Ius de- veloped technology to combine aluminium and steel for select parts in the US versions of its Acura RX und Accord. WIen we consider mass produc- tion, all-aluminium is still dImcuIL, Hondu spokes- womun Yuku Abe LoId Reuters. Nissan Motor last year announced a plan to ex- pand the use of high-ten- sile steel, which is stronger and lighter than conven- tional steel, in up to 20 percent of parts installed in its new production models starting in 2017. We conLInue Lo use aluminium in vehicle ar- eas such as hoods, doors and trunk areas on cer- tain models - such as the GT-R and 370Z high- performance sports cars. Going forward, more high-strength steel will be used in key structural ar- eus, suId CIrIs Keee, u spokesman for Nissan. Reuters Myanmar Summary June 26-July 2, 2014 Myanmar Business Today mmbiztoday.com IT & TELECOM 27 Myanmar Summary LK Most Open to Ioreign Investment in ICT Sector: IIL Wai Linn Kyaw A new index published by The Economist Intelli- gence Unit (EIU) shows that northern European coun- tries have the most open ICT sectors, with the UK ranking hrsL, IoIIowed by LIe NeLIer- lands and Germany. The ICT Globalisation Index, commIssIoned by HuuweI, Is u quantitative ranking of the de- gree of globalisation of national ICT sectors. The ranking com- prises more than 25 indicators ucross Iour LIemuLIc cuLegorIes: openness to ICT trade, open- ness to foreign investment in the ICT sector, R&D globalisa- tion, and strength of the ICT environment. The UK tops the overall index, particularly for its strength in the openness to foreign invest- ment category, EIU said. The reason for its openness, the report says, may be due to its lack of domestic innova- tion, which is indicated by its relatively low proportion of ICT patents. uureI WesL, LIe edILor oI LIe reporL, suId: TIe reseurcI shows that while there are great benehLs Lo IuvIng un open und globalised ICT sector, all coun- tries have some ways to go in order to take full advantage. AmId LIe currenL cyber secu- rity concerns, it seems the chal- lenges to greater openness will onIy grow greuLer. Emerging markets performed well in openness to ICT trade China is second in this category overall, India eighth. But they fare poorly in their current ICT environment, which captures internet, mobile and broadband penetration as well as ICT us- age and spending here China is 17 th and India is last. The report shows striking dif- ferences in how countries tackle LensIons beLween LIe benehLs oI greater ICT openness and the potential cyber-security chal- lenges that come with it. For instance, despite the fact that global businesses in many secLors sucI us hnuncIuI ser- vices and e-commerce rely on the free exchange of data across borders, many territories are now introducing restrictions on sucI ows, wILI some mun- dating that data use is linked to where it is geographically sLored. TIIs mukes IL dImcuIL Ior gIobuI hrms Lo operuLe. Intel Luonches Messuging App Lsing Curtoons to Mimic Sender's Iuce I ntel Corp is getting into voice instant messaging with a smartphone app that uses facial tracking technology to caricature a senders expressions. Pocket Avatars was launched on Thursday by Mike Bell, an Intel senior executive whose job is to make sure the worlds largest semiconductor maker is at the front of future technology trends after arriving disastrously late to smartphones and tablets. The app uses a smart- phones camera and mi- crophone to record a short message while map- ping the speakers facial expressions onto one of several cartoon charac- ters. The message is then sent to the recipient, who can play it, complete with the avatars head move- ments, smiles and blinks. In an interview, Bell de- scribed the app, which is free on Android smart- Noel Randewich phones and iPhones, as a way to demonstrate facial tracking technology that could appear on future Intel platforms such as laptops or tablets. RuLIer LIun IeL IL sIL in a lab and languish, we thought wouldnt it be cooI Lo sIow peopIe,` BeII said of the technology. L`s Iun und eusy Lo ex- plain what it does, but its actually pretty complex beIInd LIe scenes. Intels core market, the PC industry, is languish- ing and the chipmaker is far behind rivals such as Samsung Electronics and Qualcomm in mobile chips. Reuters Myanmar Summary Myanmar Summary Netix Inters Lute Night Ruce With Chelseu Hundler S treaming video com- puny NeLIx nc signed a deal with comedIun CIeIseu Hun- dler to create an all-new talk show that will debut in early 2016, the com- pany said. NeLIx suId LIe sIow will become available si- multaneously for mem- bers to watch whenever they like. This is the latest origi- nal content deal signed by NeLIx, wIIcI Ius Iud success with other series IIke House oI Curds und Orunge Is LIe New BIuck. The deal also means LIuL HundIer, wIose sIow was previously on Com- cast Corp unit NBCUni- versals E! Network cable channel, will create other specials exclusively for NeLIx. wunLed Lo sIL wILI LIe cool kids at lunch, so I ap- proucIed NeLIx Lo muke sure they were as cool as I thought they were, and Jennifer Saba wIen conhrmed my sus- picions, like with any oth- er future lover, I made my move, HundIer suId In u statement. The terms of the part- nership were not dis- closed. Reuters Economist Intelligence Unit (EIU) .~_.,._,.~,.~.. ~q .q:. .~:~..:.._ ICT ~_.:.~ ......:_.. UK . ...,q:~q.~_.,~: ,e .:., . :., . .:.._ ~ .....,:~..~.,._~:. .q ._. Huawei ._...._ ITC Globalisation Index ._ ~...:. ICT ~_~~.~.:...q:q. ~_ . .:.~:. .e:_.:._.._e.._. ~. .|q. ~_ . ~ ICT .q: .~e. ~.... ICT ~_~ ._.:. .:.q..._....~..'.... R & D globalization . ICT ~.~ ~~,.-..:..:.~..'~~._.. ~:. . ..: _ . ._ e. ._ ~: .. q ._. UK~.,_ e ~. .|~e:.~ . . .. q. ~_ .,_ . . . q. ~_ . _. .. : , .-. _.:.q..._....~ ....q_..._~:_e.._~:. 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June 26-July 2, 2014 Myanmar Business Today mmbiztoday.com 28 INTIRNATIONAL AN OMISTIC ILIGHT SCHILLI Fliggh htss ffroom Yanggon (RGNN) to Bangkok ((BKK) Fliggh htss ffroom Banggkok (BKKK) to Yaangon (RGN) Flight No. DDayss From To ETD ETA Operated by: Flight No. DDayss From To ETD ETA Operated by: PG 706 1 2 3 4 5 6 7 RGN BKK 7:15 9:30 Bangkok Airways DD4230 1 2 3 4 5 6 7 DMK RGN 06:30 07:55 NOK Airlines DD4231 1 2 3 4 5 6 7 RGN DMK 8:00 9:45 NOK Airlines 8M336 1 2 3 4 5 6 7 BKK RGN 6:40 7:25 MAI FD2752 1 2 3 4 5 6 7 RGN DMK 8:30 10:15 Thai AirAsia FD2751 1 2 3 4 5 6 7 DMK RGN 7:15 8:00 Thai AirAsia 8M335 1 2 3 4 5 6 7 RGN BKK 8:40 10:25 MAI TG303 1 2 3 4 5 6 7 BKK RGN 8:00 8:45 Thai Airways TG304 1 2 3 4 5 6 7 RGN BKK 9:50 11:45 Thai Airways PG701 1 2 3 4 5 6 7 BKK RGN 8:50 9:40 Bangkok Airways PG702 1 2 3 4 5 6 7 RGN BKK 10:45 12:40 Bangkok Airways FD2755 1 2 3 4 5 6 7 DMK RGN 11:35 12:20 Thai AirAsia Y5-237 1 2 3 4 5 6 7 RGN BKK 18:05 19:50 Golden Myanmar Airlines PG707 1 2 3 4 5 6 7 BKK RGN 13:40 14:30 Bangkok Airways TG302 1 2 3 4 5 6 7 RGN BKK 14:45 16:40 Thai Airways Y5-238 1 2 3 4 5 6 7 BKK RGN 21:10 21:55 Golden Myanmar Airlines PG703 1 2 3 4 5 6 7 RGN BKK 15:20 17:15 Bangkok Airways FD2753 1 2 3 4 5 6 7 DMK RGN 16:35 17:20 Thai AirAsia 8M331 1 2 3 4 5 6 7 RGN BKK 16:30 18:15 MAI PG703 1 2 3 4 5 6 7 BKK RGN 16:45 17:35 Bangkok Airways FD2754 1 2 3 4 5 6 7 RGN DMK 17:50 19:35 Thai AirAsia TG305 1 2 3 4 5 6 7 BKK RGN 17:55 18:40 Thai Airways PG704 1 2 3 4 5 6 7 RGN BKK 18:25 20:20 Bangkok Airways DD4238 1 2 3 4 5 6 7 BKK RGN 19:30 20:15 NOK Airlines TG306 1 2 3 4 5 6 7 RGN BKK 19:40 21:35 Thai Airways 8M332 1 2 3 4 5 6 7 BKK RGN 19:20 20:05 MAI DD4239 1 2 3 4 5 6 7 RGN DMK 21:00 22:45 NOK Airlines PG705 1 2 3 4 5 6 7 BKK RGN 20:00 21:15 Bangkok Airways FFliggh htss ffroom m Yangoon (RGN)) to Chiaang Maii (CNX) FFliggh htss ffroom m Chiangg Mai (CCNX) to YYangon (RGN) W9-9607 4 7 RGN CNX 14:50 16:20 Air Bagan W9-9608 4 7 CNX RGN 17:20 17:50 Air Bagan Flligghtss ffroom Yanggon (RGNN) to Sinngapore (SIN) Flligghtss ffroom Singaapore (SIN) to Yangon ((RGN) Y5-233 1 2 3 4 5 6 7 RGN SIN 10:10 14:40 Golden Myanmar Airlines Y5-234 1 2 3 4 5 6 7 SIN RGN 15:35 17:05 Golden Myanmar Airlines MI509 1 6 RGN SIN 0:25 5;00 SilkAir SQ998 1 2 3 4 5 6 7 SIN RGN 7:55 9:20 Singapore Airline 8M231 1 2 3 4 5 6 7 RGN SIN 8:30 13:00 MAI 8M6231/3K585 1 3 4 5 6 SIN RGN 9:10 10:40 Jetstar Asia SQ997 1 2 3 4 5 6 7 RGN SIN 10:25 14:45 Singapore Airline 8M232 1 2 3 4 5 6 7 SIN RGN 14:10 15:40 MAI 8M6232/3K586 1 3 4 5 6 RGN SIN 11:30 16:05 Jetstar Asia MI518 1 2 3 4 5 6 7 SIN RGN 14:20 15:45 SilkAir 8M233 5 6 7 RGN SIN 13:45 18:15 MAI 8M235 5 6 7 SIN RGN 19:15 20:45 MAI TR2827 1 6 7 RGN SIN 15:10 19:35 TigerAir TR2826 1 6 7 SIN RGN 13:00 14:30 TigerAir TR2827 2 3 4 5 RGN SIN 17:10 21:35 TigerAir TR2826 2 3 4 5 SIN RGN 15:00 16:30 TigerAir MI517 1 2 3 4 5 6 7 RGN SIN 16:40 21:15 SilkAir MI520 5 7 SIN RGN 22:10 23:35 SilkAir FFliightts frromm Yangonn (RGN) tto Kualaa Lumpuur (KUL) Fligghtts frro om m Kuala LLumpur (KUL)too Yangonn (RGN) AK1427 1 2 3 4 5 6 7 RGN KUL 8:30 12:50 AirAsia AK1426 1 2 3 4 5 6 7 KUL RGN 6:55 8:00 AirAsia 8M501 1 2 3 4 5 6 7 RGN KUL 8:55 12:55 MAI MH740 1 2 3 4 5 6 7 KUL RGN 10:05 11:15 Malaysia Airlines MH741 1 2 3 4 5 6 7 RGN KUL 12:15 16:30 Malaysia Airlines 8M502 1 2 3 4 5 6 7 KUL RGN 14:00 15:00 MAI Fligghtts frrom Yanngon (RGGN) to HHanoi (HHAN) Fligghtts frrom Hannoi (HANN) to Yanngon (RRGN) VN956 1 3 5 6 7 RGN HAN 19:10 21:30 Vietnam Airlines VN957 1 3 5 6 7 HAN RGN 16:35 18:10 Vietnam Airlines Flliggh htss ffroom m Yangon (RGN) to Ho CChi Minhh (SGN) Flliggh htss ffroom m Ho Chii Minh (SSGN) to Yangonn (RGN) VN942 2 4 7 RGN SGN 14:25 17:10 Vietnam Airlines VN943 2 4 7 SGN RGN 11:40 13:25 Vietnam Airlines Flligghtss ffrom Yanngon (RGGN) to TTaipei (TTPE) Flligghtss ffrom Taipei (TPEE) to Yanngon (RGN) CI7916 1 2 3 4 5 6 RGN TPE 10:50 16:10 China Airline CI7915 1 2 3 4 5 6 7 TPE RGN 7:15 10:05 China Airline BR288 2 5 6 RGN TPE 11:35 17:20 EVA Air BR287 2 5 6 TPE RGN 7:30 10:35 EVA Air Flliggh htss ffroom Yanggon (RGNN) to Kunming(KMG) Flliggh htss ffroom Kunmming(KMMG) to Yangon ((RGN) CA906 2 3 4 6 7 RGN KMG 14:15 17:35 Air China CA905 2 3 4 6 7 KMG RGN 12:40 13:15 Air China MU2032 1 2 3 4 5 6 7 RGN KMG 14:40 17:55 China Eastern MU2031 1 2 3 4 5 6 7 KMG RGN 13:30 14:00 China Eastern MU2012 3 6 RGN KMG 12:20 18:10 China Eastern (via NNG) MU2011 3 6 KMG RGN 8:25 11:30 China Eastern (via NNG) Flligghtss from Yanngon (RGGN) to BBeijing (BJS) Flligghtss from Beijjing (BJSS) to Yanngon (RRGN) CA906 2 3 4 6 7 RGN BJS 14:15 21:55 Air China (via KMG) CA905 2 3 4 6 7 BJS RGN 8:05 13:15 Air China (via KMG) Fliggh htss ffroom Yanggon (RGNN) to Naanning (NNG) Fliggh htss ffroom Nannning (NNNG) to Yaangon ((RGN) Flight No. DDayss From To ETD ETA Operated by: Flight No. DDayss From To ETD ETA Operated by: MU2012 3 6 RGN NNG 12:20 16:25 China Eastern MU2011 3 6 NNG RGN 10:15 11:30 China Eastern FFliggh htss ffroom m Yangoon (RGN)) to Honng Kong (HKG) HHonng g KKoong (HKG) Flights from Yaangon ((RGN) KA251 1 2 4 6 RGN HKG 1:10 5:35 Dragon Air KA250 1 3 5 7 HKG RGN 21:50 23:45 Dragon Air *PPleaasee noote thee dday change for the deparrture time too Hong Kongg. Flliggh htss ffroom m Yangon (RGN) to Guanng Zhouu (CAN) Flliggh htss ffroom m Guang Zhou (CCAN) to Yangonn (RGN) 8M711 2 4 7 RGN CAN 8:40 13:15 MAI CZ3055 3 6 CAN RGN 8:40 10:30 China Southern Airlines CZ3056 3 6 RGN CAN 11:20 15:50 China Southern Airline 8M712 2 4 7 CAN RGN 14:15 15:45 MAI CZ3056 1 5 RGN CAN 17:40 22:15 China Southern Airline CZ3055 1 5 CAN RGN 14:45 16:35 China Southern Airlines FFlighhts ffroom Yanggon (RGN) to Koolkata (CCCU) FFlighhts ffroom Kolkkata (CCUU) to Yaangon (RRGN) Flight No. DDayss From To ETD ETA Operated by: Flight No. DDayss From To ETD ETA Operated by: AI228 5 RGN CCU 18:45 19:45 Air India AI227 1 5 CCU RGN 10:35 13:20 Air India AI234 1 5 RGN CCU 13:40 16:55 Air India (via GAY) AI233 5 CCU RGN 13:30 18:00 Air India (via GAY) Fliggh htss ffrom Yanngon (RGGN) to GGaya (GAAY) Fliggh htss ffrom Gayya (GAY) to Yanngon (RGGN) 8M 601 1 3 5 6 RGN GAY 10:30 11:50 MAI 8M 602 1 3 5 6 GAY RGN 12:50 16:00 MAI AI234 1 5 RGN GAY 13:40 15:00 Air India AI233 5 GAY RGN 15:00 18:00 Air India Fligghtts frrom Yanngon (RGGN) to TTokyo (NNRT) FFliightts frrom Tokkyo (NRTT) to Yaangon (RRGN) NH914 1 3 6 RGN NRT 22:00 06:40+1 ALL NIPPON Airways NH913 1 3 6 NRT RGN 11:10 17:05 ALL NIPPON Airways FFliggh htss ffrom Yanngon (RGGN) to SSeoul (ICCN) FFliggh htss ffrom Seooul (ICN)) to Yanngon (RGGN) KE472 1 3 5 7 RGN ICN 0:05 8:00 Korean Air KE471 1 2 3 4 5 6 7 ICN RGN 18:40 22:55 Korean Air OZ7463 4 7 RGN ICN 0:50 8:50 Asiana OZ4753 3 6 ICN RGN 19:30 23:40 Asiana Flligghtss ffrom Yanngon (RGGN) to DDoha (DOOH) Flightts frrom Dohha (DOH) to Yangon (RRGN) QR619 1 2 3 4 5 6 7 RGN DOH 8:00 11:45 Qatar Airways QR618 1 2 3 4 5 6 7 DOH RGN 21:05 06:29+1 Qatar Airways Flliggh htss ffroom m Yangon (RGN) to Nay Pyi Taww (NYT) Flliggh htss ffroom m Nay Pyyi Taw (NNYT) to Yangonn (RGN) Flight No. DDayss From To ETD ETA Operated by: Flight No. DDayss From To ETD ETA Operated by: FMI-A1 1 2 3 4 5 RGN NYT 7:30 8:30 FMI Air Charter FMI-A2 1 2 3 4 5 NYT RGN 8:50 9:50 FMI Air Charter FMI-B1 1 2 3 4 5 RGN NYT 11:30 12:30 FMI Air Charter FMI-B2 1 2 3 4 5 NYT RGN 13:00 14:00 FMI Air Charter FMI-C1 1 2 3 4 5 RGN NYT 16:30 17:30 FMI Air Charter FMI-C2 1 2 3 4 5 NYT RGN 18:00 19:00 FMI Air Charter FMI-A1 6 RGN NYT 8:00 9:00 FMI Air Charter FMI-A2 6 NYT RGN 10:00 11:00 FMI Air Charter FMI-A1 7 RGN NYT 15:30 16:30 FMI Air Charter FMI-A2 7 NYT RGN 17:00 18:00 FMI Air Charter FFliightts frrom Yangoon (RGN) to Manndalay ((MDY) FFliightts frrom Manddalay (MDDY) to YYangon (RGN) Y5-234 1 2 3 4 5 6 7 RGN MDY 6:15 7:30 Golden Myanmar Airlines Y5-233 1 2 3 4 5 6 7 MDY RGN 8:10 9:25 Golden Myanmar Airlines YH 909 2 4 6 7 RGN MDY 6:30 8:10 Yangon Airways YH 910 1 3 MDY RGN 7:40 10:30 Yangon Airways YH 917 1 2 3 4 5 6 7 RGN MDY 6:10 8:30 Yangon Airways YH 918 1 2 3 4 6 7 MDY RGN 8:30 10:25 Yangon Airways YH 727 1 5 RGN MDY 11:15 13:25 Yangon Airways YH 728 1 5 MDY RGN 9:10 11:05 Yangon Airways YH 731 1 2 3 4 5 6 7 RGN MDY 15:00 17:10 Yangon Airways YH 732 1 2 3 4 5 6 MDY RGN 17:10 19:15 Yangon Airways W9 501 1 2 3 4 RGN MDY 6:00 7:25 Air Bagan W9 502 1 2 3 4 MDY RGN 16:10 18:15 Air Bagan K7 222 1 2 3 4 5 6 7 RGN MDY 6:30 8:40 Air KBZ K7 223 1 2 3 4 5 6 7 MDY RGN 9:00 11:05 Air KBZ YJ 201 1 2 3 4 5 6 7 RGN MDY 11:30 12:55 Asian Wings YJ 202 1 2 3 4 5 6 7 MDY RGN 16:00 17:25 Asian Wings Days - (1) Monday (2) TTueesdaay (33) WWeddnessdaay (4) Thursdayy (5) Friday (6) SSaturday (7) Suunday Days - (1) Monday (2) TTueesdaay (33) WWeddnessdaay (4) Thursdayy (5) Friday (6) SSaturday (7) Suunday June 26-July 2, 2014 Myanmar Business Today mmbiztoday.com IT & TELECOM 29 Centrul Bunk to Grunt Mobile Bunking Licences Myanmar Summary T he Myanmar Cen- tral Bank will grant mobile banking li- cences to Myanmar Ori- ental Bank and Coopera- tive Bank this month, in an attempt to give rural populations better access to banking services. Mobile bank services al- low Myanmar customers to access banking services without having to go to local branches. The Innwa Bank and Myawady Bank have al- ready implemented mo- bile bank services under the provision of Myanmar Economic Cooperation one of two major con- glomerates and holding companies operated by the Burmese military. Senior manager of My- anmar Oriental Bank, U Myint Zaw, said their or- ganisation applied for a permit from the Central May Soe San Bank and is waiting for their request to be pro- cessed. TIrougI mobIIe bunk- ing we can provide ser- vices to the rural areas, people can transfer and withdraw money without IuvIng Lo go Lo LIe bunk, he said. The Cooperative Bank is also experimenting with mobile banking options to improve the quality of its service. Its new banking options could include money- transfers, balance check- ing and an application to IeIp cusLomers hnd LIe locations of ATMs and branches. Cooperative Bank said they have started imple- menting technologies that will help their mobile ser- vices improve the experi- ence of customer transac- tions. Once LIe CenLruI Bunk grants the mobile bank- ing licence, Cooperative Bank will implement the money LrunsIer servIce, said U Pe Myint, manag- ing director of the bank. _., .:. .~: -e ~ ~ .~..~ .,. ~ ~, ..: . .:.. .. . q, q_ q e _ . . ~.,...~.~ e.. ~~. ....~~.. ~~. 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Yoor uys Are Nombered, Top Online Intrepreneor Tells Retuilers T he founder of Rock- et Internet, the German venture capital company behind dozens of online start- ups, warned the retail in- dustry that e-commerce and smartphones would mean there will be little future for stores in emerg- ing markets. Oliver Samwer, 40, told the annual summit of the Consumer Goods Forum (CGF), an industry net- work of some 400 retail- ers and big brands from 70 countries, that many of them risked being left behind as the growth of e- commerce accelerates. You onIy Iuve sLores because there was no In- ternet, but that does not mean there is a right to Iuve u sLore, Sumwer said, adding that tradi- tional retailers focused too much on older shop- pers and not enough on smartphone-savvy young- sters. WIuL you Ieur wIII come mucI IusLer, Ie warned. Rocket Internet is bid- ding to create the largest internet empire outside Emma Thomasson the United States and China, seeking to repli- cate the success of Ama- zon and Alibaba in mar- kets the US and Chinese e-commerce groups have yet to dominate, such as AIrIcu, uLIn AmerIcu und Russia. After his speech, Sam- wer traded blows about whether stores will sur- vive, in a panel discussion with Mark Price, manag- ing director of British gro- cer Waitrose, who intro- duced himself to Samwer suyIng: HI - `m Murk, `m u dInosuur. Samwer founded Rocket Internet in 2007 with his brothers Marc and Alex- ander and it is already active in 102 countries, making revenue of $1 bil- lion in 2013 via online fashion stores including DuhLI In uLIn AmerIcu und umodu In RussIu, us well as Jumia for general merchandise in Africa. Sources have told Reu- ters the company is con- sidering a stock market listing in Frankfurt later this year which could value it at up to 5 billion ($6.8 billion), as buoy- ant capital markets have encouruged u urry oI e- commerce oLuLIons LIIs year, with most focus on Alibaba. Samwer said the stock market value of Amazon and Alibaba would soon dwarf the worlds biggest retailer Wal-Mart. WIuL wouId you buy for your children? I would buy Amazon and Rocket (sIures), Ie suId, udd- ing he believed French retailer Carrefour would Iuve been beLLer o buy- ing a stake in Alibaba than trying to open stores in China. Only 10 per cent left
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of the worlds popula- tion lives in the markets Rocket is targeting, Sam- wer said e-commerce had even better prospects in emerging markets than in developed economies, as online sites do not have to compete with such estab- lished stores. I you don`L Iuve Lo sIure wILI omIne, your percentage will be much IIgIer, Ie suId. L wIII all move online, you will have 10 percent left that wIII noL move onIIne. Samwer said Rocket In- ternet ventures around the world already had 44 million fans on Facebook, more than Nike and Ap- ple combined, noting that the cities with the most active users of Facebook are Bangkok, Jakarta and Istanbul, with none of the top 10 cities in the United States. Deutsche Post, the worlds largest postal and logistics company which Is prohLIng Irom boom- ing deliveries for online retailers, predicts e-com- merce could account for up to 40 percent of total trade by 2025 in devel- oped countries, from un- der 10 percent in most markets now, and up to 30 percent in emerging markets, up from a tiny fraction today. :.,~._..~ ,:.__~. Rocket Internet ...:..q. ..,..~_.:. Oliver Samwer ~ ..~ e , ., ~ .~ .q:,.~,....~.~ ..:.q:.~e..._ ...:. .q.. . , ..:.._ ...~ ~ ~..~.,_ e . :.._ ~:._ ~,:~~:.~ ..'..|~ .:.__e.._~:. ~....:. .~ . .q: ... . ~ .,. .:. ~ .~ ...._.:_~:.. ~ ._ . ~....:..~ . . . ~ . ~e ,~~ . . ~. ,:._ _ ~ .. . , .q . :..|~ ._ . .. . ~ , ._ . :.e q. ~ ~q , ~e , , ~ .~~ .:~ ~.~.q:,.~,.....:. .q.. : . , .:.. . ~ _ ~q, .._.:_~:._.._e.._. ...: .~..e:._.. ~~:,~.q..q .|~ ~.,~~e .~.._e._.. ._.:. .q.| .'' e , .~._.:_. . ..,~....:..~..q:.. .,..:.._ .....e:. ~~ .. . e .: . . ~ q, ~:,:...:._. .e.~ _~:.~ ..~e,..q.,..:..~ .~ ._._~._~: . , .~ .~ ._.:._. S o e
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P a u l M o r r is / B lo o m b e r g Myanmar Summary June 26-July 2, 2014 Myanmar Business Today mmbiztoday.com SOCIAL SCENES 30 Nadda Buranasiri ,CEO of Tai Air Asia X. Wai LinnKyaw Nadda Buranasiri, Chainarong Keratiyutwong and air hostesses at the event. Wai Linn Kyaw Lucky draw winners pose for a photo. Wai Linn Kyaw Air hostesses pose for a photo. Wai Linn Kyaw Lucky draw program at the event. Wai Linn Kyaw Ceremony of Tai Air Asia X celebrating new connectivity 68 Residence Sales gallery Opening Ceremony Dr Aung Kyaw Win,U Hla Myint,Mayor of YCDC,U Myint Swe,prime minister of Yangon Division at the ribbon cutting event. Kyaw Min U Myint Swe, prime minister of prime minister of Yangon Division. Kyaw MIn Grand Opening of the KHG Development Sales Gallery U Kyi Soe, president of KHG Development gives opening speech. Wai Linn Kyaw U Myint Swe, chief minister of Yangon Region, at the event. Wai Linn Kyaw Delegates cutting ribbon at the grand opening of the KHG development sales gallery. Wai Linn Kyaw Delegates at the event. Wai Linn Kyaw U Myint Swe looks at a development model. Kyaw Min Delegates at the event. Kyaw Min Crest giving ceremony. Kyaw Min June 26-July 2, 2014 Myanmar Business Today mmbiztoday.com CLASSIFIEDS 31 June 26-July 2, 2014 Myanmar Business Today mmbiztoday.com 32 ENTERTAINMENT The Mingon Pugodu und Bell: Giguntic Lnnished Stopu And The World's nd Lurgest Bell Eric Grundhauser N ice pile of bricks youve got here. The Mingun Pahtodawgyi is a nice pile of bricks indeed and holds the record for being the biggest pile of bricks in the world. Intended to be a 500 foot high stupa, a mound housing Buddhist relics, the PuILoduwgyI remuIns unhnIsIed Lo LIIs duy but is still an awe-inspiring structure. Measur- ing 450 by 450 feet and 172 feet high, it dwarfs the surrounding area, and would easily have rivalled the size of the Great Pyramid of Giza Iud KIng Boduwpuyu hnIsIed ILs consLrucLIon. Construction began in 1790, using mostly slave labour, and causing a massive drain on resources and manpower in the area. The project was widely unpopular during its time, which some suspect caused its cessation. King Bodawpaya was a superstitious man and during the construction, it was proph- esied that the completion of the great stupa would cause his death or the destruction of the country. Worried about maintaining his empire, the king slowed progress on the stupa. When he died, construction was abandoned completely. Despite not completing the stupa, construc- LIon on un uccompunyIng beII wus hnIsIed, und wus sImIIurIy grund In sIze. TIe hnIsIed bell weighed over 200,000 pounds and is 12 feet high. The massive bell can be rung by striking the outside since it has no internal ringing mechanism. Since the early 19th century, the stupa has become increasingly decrepit. An earthquake in 1839 left giant cracks along the face of the stupa, and wear and tear have led it to become almost natural looking. Without the bright white entrance, visitors could easily mistake the stupa for a large earthen mound, or simply a pile of bricks. Myunmur's Snuke Pugodu: Where Serpents ure Considered Holy und Pumpered Accordingly Annetta Black O m cIuIIy cuIIed Yudunu ubumunI Hsu-Luungpye Puyu, LIIs pugodu In PuIIek Is generuIIy known by unoLIer nume: Hmwe Puyu, or LIe Snuke Pugodu. TIIs ouL-oI- the-way pagoda near Mandalay is distinguished by the large pythons who live happily coiled around the Buddha statue within. The temple was founded in 1974 when a Buddhist monk was tending the old pagoda. Inside, the monk found two large pythons wrapped around a statue of Bud- dha. The monk dutifully carried the snakes out to the jungle and returned to clean the pagoda. Within a day the snakes were back, and a third had joined. Each time, the monks would carry the snakes out to the jungle, and each time they would return. Eventually the monks came to see the snakes as holy, possibly the reincarnated souls of monks who used to tend to the pagoda. The monks stopped removing the snakes and instead began taking care of them. They take such nice care of them, in fact, that it makes sense that the snakes like to hang around the pagoda. The two pythons currently in residence are fed a pot of milk und LIree eggs every hve duys us weII us u smuII umounL oI gouL meuL. Every mornIng uL 11:ooum, LIe snukes ure IovIngIy wusIed by LIe monks In u buLI hIIed wILI ower peLuIs. TIey ure someLImes even drIed wILI money IeIL us un oerIng uL LIe pugodu. Each year, thousands of the faithful make a pilgrimage to the temple, and the walls of the pagoda are lined with photos of families visiting the semi-holy serpents. Some depict toddlers happily bathing alongside the snakes. They snakes have never been known to injure anyone and seem quite happy to be touched by the visitors. Though the original pythons have died, new snakes have since been donated by faithful followers. The original snakes can still be seen in the pagoda, albeit in a taxider- mied state. Considering the level of care the snakes receive, the snakes no doubt lived a long and happy life. The area surrounding the snake pagoda is also worth exploring and is full of overgrown and beautiful ruins rarely visited by tourists. T r a v e la d v e n t u r e . c o m T r a v e lp o d . c o m The unnished entrance to the stupa. F lic k r / p y ja m a The Mingun Bell. F lic k r / a n t w e r p e n R The stupa entrance. The Settawya Pagoda with the stupa in the background. The massive stupa, cracked from earthquakes. F lic k r / p y ja m a F lic k r / p y ja m a F lic k r / p y ja m a