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December 8, 2019

NEWS
ECONOMY

Country’s largest mini-grid unveiled in Magway

Image result for solar mini gridWith the mini-grid, up to 400 households in Magway’s Lel Ma village now have access to electricity.Myanmar’s electrification rate is one of the lowest in the world at around 50 percent. Kapil Seth, chief executive officer of Mandalay Yoma Energy, hailed the investment as a landmark in electricity access for remote areas of the country.

Mandalay Yoma Energy is a solar energy joint venture between French ENGIE Group’s GDF International SAS and Singapore-based consuntancy Sol Partners Pvt Led.Mandalay Yoma Energy says it is looking to develop more solar and hybrid mini-grids to electrify tens of thousands of households across Myanmar’s rural areas and work closely with the Department of Rural Development to develop more mini-grid programmes. The Rural Development Department’s mini-grid programmes are part of the World Bank-supported Myanmar National Electrification Plan 2030 that aims to electrify every household in the country by 2030.

The World Bank released a report this year estimating that US$2 billion of annual investments by 2030 are required to reach complete electrification.  The Myanmar government raised electricity tariffs in July, making solar panel installations a more attractive proposition because of their cost competitiveness and advantage of being deployed more quickly than other renewable energy sources.Meanwhile, a 2017 report by Paris-based independent International Energy Agency revealed that decentralised solutions such as mini-grids are the most cost-effective option to deliver electricity to more than 70pc of people who have yet to gain access to electricity.

Source: Myanmar Time

Land bank to go online

Image result for Myanmar Land bankMyanmar’s land bank will be fully digitalised and online access given to investors applying for land on which to do business in the country,” said U Thaung Tun, chair of Myanmar Investment Commission. Obtaining land is the main challenge for both local and foreign investors when they set up businesses in Myanmar.

The country is already making several economic reforms, and aims to accelerate the reforms, said U Thaung Tun, and the setting up of the online land bank is one of the priorities of the Ministry of Investment and Foreign Economic Relations. The current economic reforms are of great help for the future economic development of the country. Myanmar’s rank moved up from 171st to 165th on the Doing Business Report 2019 released by the World Bank due to the economic reforms.

“We welcome the government’s reforms for private sector development. Foreign investments are needed for the emerging market of Myanmar. The current reforms will contribute a lot to future development,” said Thomas Neisinger, the German ambassador to Myanmar.

Source: Myanmar Times 

MOALI, KOICA sign RoD for Project for SAEM

Image result for agriculture myanmarThe Record of Discussion signing ceremony for “The Project for Strengthening Agricultural Extension in Myanmar (SAEM)” was held between Department of Agriculture and Korea International Cooperation Agency-KOICA at the head office of the DOA, Ministry of Agriculture, Livestock and Irrigation on 19 November.

During the ceremony, Dr. Ye Tint Tun, Director-General, Department of Agriculture and Ms. Lee Youn Soo (Chief Representative, KOICA Myanmar office) delivered the general information on the said Project and they continued with the singing of ROD between each other.

The total project budget is US$ 9.5 million, the project duration is from 2019 to 2023 and this project will cover 27 townships, 13 districts in 10 states/regions. The objectives of the project are to enhance productivity and increase farmers’ income by improvement the extension system and to upgrade the national extension system by empowering extension staff with modernized technologies.

Source: Global New Light of Myanmar

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

Image result for ayala yomaPhilippine conglomerate Ayala Corporation will take 20 percent stakes in two of Serge Pun’s listed companies for a total of US$238 million, making the Myanmar tycoon the first to benefit from recent market liberalisation allowing significant foreign ownership of listed holdings. Ayala, with investments in real estate, telecommunications, energy and infrastructure, will acquire stakes in Singapore-listed Yoma Strategic Holdings and Yangon-listed First Myanmar Investment, becoming the second-largest shareholder in both.

The deal, announced on Thursday 14 November, will be worth $238 million in total and values the two companies at about $1 billion combined. Both sides said it was the Philippines’ biggest private investment in Myanmar. The deal involves share issues of S$0.45 (US$0.33) per share by Yoma Strategic and K15,000 (US$9.90) by FMI, representing a premium of 37.7pc and 36.5pc over the average traded price on November 12 and 13 respectively. Ayala president and chief operating officer Fernando Zobel de Ayala will sit on the boards of the two companies.

The deal represents the first major foreign investment in a company listed on the YSX since Myanmar’s securities commission announced in July that non-Myanmar individuals and entities would be permitted to acquire up to 35pc of listed firms. Yoma Group runs a diversified portfolio of businesses in real estate, consumer, automotive and banking, partnering with the likes of Yum Brands Inc and Mitsubishi Motors Corp. Earlier this year, Yoma Bank became the first bank in Myanmar with a foreign stakeholder following a decision by the International Finance Corporation to convert a $5 million loan into a 5pc equity shareholding.

Source: Myanmar Times 

Myanmar hopes to be the next Asian winner of US-China trade war as Vietnam nears capacity

Related imageMyanmar expects to attract more investment as manufacturers seeking to relocate production from China to skirt US tariffs encounter capacity constraints in Vietnam. Myanmar aims to woo a total of US$5.8 billion in foreign direct investment this year and cut back the red tape that deters some companies, according to a senior government official, Aung Naing Oo. One advantage for Myanmar – where about one-third of the population lives in poverty – is that Europe and the US offer preferential export terms to boost growth.

At the same time, the US$71 billion economy continues to face traditional obstacles such as insufficient supplies of electricity and industrial land. Recent evidence suggests Vietnam has pulled ahead in the race to lure producers but neighbours including Thailand and Indonesia are stepping up efforts to attract them. Clogged infrastructure is one of the risks for Vietnam, where shipping container capacity will need to grow at almost twice its 10-12 per cent pace of the past decade to keep up with new demand, Bloomberg Intelligence research shows.

Net foreign-direct investment into Myanmar collapsed to 1.8 per cent of gross domestic product last year from 6 per cent in 2017, World Bank data shows. The World Bank has said that production relocation sparked by the US-China trade war is an opportunity for Myanmar. The lender expects the country’s economic expansion to climb toward 7 per cent by 2022, even as domestic conflicts – including in Rakhine – remain downside risks because of their potential impact on investor sentiment.

Source: South China Morning Post

Gold price dips below K1.2 mln in domestic market tracking global cues

Image result for goldWith gold prices sliding in the global market, the price of gold has plunged below K1.2 million per tical (0.578 ounces or, 0.016 kilograms) in the domestic market for the first time since 7 August, according to gold traders. In early September, the price of pure gold crossed K1.3 million per tical in the domestic market, and then, it dropped to K1.188 million on 12 November.

The domestic gold price is positively related to the global gold price. Global prices were pegged at over US$1,500 per ounce on 1 November and then, they fell to $1,453 on 12 November, according to the gold market. The domestic price has remained above K1.2 million per tical since 7 August, rising to a record high of K1.3 million on 5 September with global gold prices on the uptick, said gold businessmen.

According to gold traders, the lowest price for gold in June was K1,099,000 (1 June) and the highest was K1,149,400 (31 June). In August, the gold price touched the lowest level of K1,142,000 on 1 August and the highest level of K1,260,500 on 29 August. In September, the price moved in the range of K1,223,800 (14 September) and 1,307,000 (5 September). Last month, it reached the lowest level of K1,211,500 on 1 October and the highest level of K1,229,000 on 10 October, according to gold traders.

Source: Global New Light of Myanmar 

Govt to launch second stage of electrification plan

Image result for transmission linesThe government will light another 4000 villages across the country in the second phase of its electrification plan, said U Thura Aung Ko, chief engineer and project manager of the Ministry of Electricity and Energy. The agency has begun inviting tenders to supply equipment for the project. Construction tenders have not yet invited. The second phase is expected to be completed in September 2021.

The second phase will supply electricity to villages up to three miles away from the main power line. Under the first phase, which was due in September 2020, some 4500 villages up to two miles from the power lines are being lighted. 2281 villages have been electrified so far in the first phase, while the remaining 2203 villages lack of 400-kilovolt routing transmission lines, which is not included in the project funding. The cost of 400kV lines will be more than the 11kV lines and transformer combined. As a result, fewer villages will be included in the routing distances, set by the World Bank. More villages will be included if the people contribute.

The National Electrification Plan (NEP) is being implemented by the Ministry of Electricity and Energy, and Ministry of Agriculture, Livestock and Irrigation with a loan of $400 million (K607.58 billion) from the World Bank. Electrification of villages is being carried out with $310 million from the Ministry of Electricity and Energy, and $90 million from the Department of Rural Development.

Source: Myanmar Times 

US dollar exchange rate slides on low demand

Image result for exchange rateThe US dollar has been sliding against the Kyat in the local currency market, with the exchange rate touching a low of K1,513 per dollar on 6 November, a decline of about K17 from October-end, said money exchangers. At the end of October, the rate was pegged at K1,530.

While the US dollar index was around 97 in the global market, the exchange rate slipped to K1,523 on 2 November and K1,516 on 4 November in the local forex market. According to a money exchanger, it is normal for the dollar to depreciate against the Kyat in November. At present, exports of rice and pulses are increasing, and the demand for the dollar is falling in the holidays. The dollar rate is likely to remain cool and it seems it may not climb up.

The Central Bank of Myanmar (CBM) buys dollars from private banks to govern the market. The CBM set the reference exchange rate (weighted average market rate) at K1,516.9 per dollar on 4 November. In October last year, the dollar exchange rate had hit a high of K1,600. On September 6, the rate dropped to K1,565.

Source: Global New Light of Myanmar 

Operations to connect Dawei SEZ to national grid begin

Image result for dawei sezThe necessary infrastructure is being set up to link Dawei Special Economic Zone (SEZ) to the national grid, which will enable the area to enjoy access to electricity within the next 2-3 years, said U Soe Myint, deputy permanent secretary for the Ministry of Electricity and Energy. Backed up loans from ADB, the ministry is expected to provide up to 300 megawatts of power to the SEZ.

Dawei SEZ will be able to enjoy electricity after the grid is extended from Mawlamyine to Ye and Dawei by 2021-22 under the first phase of the project. Eventually, the entire region of Tanintharyi will enjoy access to electricity. Currently, the whole of Tanintharyi including Dawei, is not connected to the grid and locals have to buy electricity from private providers at high prices. Electricity rates vary from K200 to K500 per unit, depending on location. At those levels, investors are unlikely to set up operations at the Dawei SEZ, prompting the government to take action.

The Dawei SEZ project has actually been in the works since the previous government’s administration but delayed due to the lack of suitable infrastructure as well as social and environmental issues relating to the location of the SEZ. In October 2019, Myanmar and Thailand agreed to speed up development of Dawei SEZ by providing the area with access to electricity and building roads to connect it to the Thai border. Dawei deep sea port project will continue according to a contract between Italian-Thai Development Company Ltd and the Myanmar government. The total designated area for the SEZ is 196 sq km.

Source: Myanmar Times 

Myanmar climbs in World Bank’s ease of doing business index

Related imageMyanmar improved its ranking on the World Bank’s Doing Business 2020 report by six positions, coming in 165th place out of 190 countries on the index compared to 171st in the previous. The ease of doing business index in the report is released every year and based on 10 indicators. The country made strides forward in several areas and is among the top 20 reformers for the year.

In starting a business, Myanmar leap to 70th place from 152nd the year before. Just five years ago, it was the least favorable place in the world. Among the reforms taken to improve the ease of starting a business in the country included making the necessary information easily available. Entrepreneurs said the level of corruption and red tape has also fallen. Meanwhile, it now only takes two days to register a new company on the country’s new online MyCo system, for a fee of just K250, 000, which is lower than before. It is now also much easier to register a new property.

The country also made progress in dealing with construction permits. In that area, Myanmar is now ranked 46 compared to 81 before. Despite moving up in the ranks, Myanmar is still the least favorable country to do business among the ASEAN countries. There was no progress made in trading across borders and resolving insolvencies, while the country actually slipped in the ranks in areas such as supplying electricity and paying taxes. Getting credit, another area the World Bank considers for its index, needs to improve as well.

Source: Myanmar Times 

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