PwC MyanmarWeekly Business Intelligence

Issue 12324 August 2018

www.pwc.com/mm

PwC | August 2018

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PwC | August 2018

1. Weekly Key Financial & Business News

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PwC | August 2018

Weekly Key Financial & Business NewsHeadlines

Budget Transparency Forum held in Kayah State

CBM permits trading of dollar swaps, says local banks reason for kyat drop

Japan to help Myanmar deal with waste

Yangon residents unhappy with YCDC: survey

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CBM to discuss border trade with PBOC

PwC | August 2018

Weekly Key Financial & Business NewsHeadlines

MNA suffers over Ks-18 billion in loss in three years

Korean investments could kick start long-delayed construction of Dala Bridge

Latest inclusion roadmap targets digital financial services

Vietnam Telecom Firm Viettel Eyes Philippine Market

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Ooredoo mulls 5G for Myanmar

PwC | August 2018 6

CBM permits trading of dollar swaps, says local banks reason for kyat drop

The Central Bank of Myanmar (CBM) will thisweek launch a new currency swap facility inefforts to stabilise the value of the Myanmar kyat,U Bo Bo Nge, deputy governor of CBM, told TheMyanmar Times on August 19.The move follows a 6 percent deprecation in thevalue of the Myanmar kyat versus the dollarbetween July 16 and August 15, during which theCBM also held a series of meetings with localbanks to discuss the situation.Following those meetings, The Myanmar Timeslast week quoted Azeem Azimuddin, CFO andadvisor to the Chair at Ayeyarwady Bank, assaying that the CBM had agreed to finallyconsider permitting banks to trade derivativessuch as forwards and swaps.“After careful consideration we have on August 19decided to launch the first swap facility betweenthe CBM and local banks. We have negotiatedwith the banks and will commence the swapfacility early this week,” U Bo Bo Nge said.“There are still some minor legal negotiations tobe carried out and those will be completed withinone or two days,” he said.

Under the CBM’s new swap facility, private bankswill deposit local currency at the Central Bank inexchange for the equivalent value in dollars eitherafter 14 days or one month at a pre-agreedinterest rate.The CBM will sell as much dollars as needed tothe local banks. “The banks will be able to get asmuch dollars from us as they need. We will signan agreement on the interest rate with the bankssoon. Using this method, we will be able to bettercontrol the exchange rate to prevent suddenvolatility in the exchange rate,” he said. One of thereasons for the kyat’s swift and suddendepreciation is a shortage of dollars in theeconomy at a time when import volumes havesurged. “The CBM currently monitors the amountof foreign exchange held by each local bank on adaily basis. So far, we have not seen a significantdecrease in their foreign exchange accounts,” saidU Bo Bo Nge.Source: Myanmar Timeshttps://www.mmtimes.com/news/cbm-permits-trading-dollar-swaps-says-local-banks-reason-kyat-drop.html

NewspapersMyanmar Times

20 Aug 2018

PwC | August 2018 7

Budget Transparency Forum held in Kayah State

On August 17, the Kayah State Government, withthe support of The Asia Foundation, organised aBudget Transparency Forum aimed at equippingcivil society organisations and the communitywith the knowledge of Kayah’s state planning,revenues and spending process.A total of 62 participants including Kayah ChiefMinister U L PhaungSho, Speaker of the StateParliament U Hla Htwe attended the forum,which provided information on the state ofKayah’s financial situation.The forum comes at a time when state and regiongovernments in Myanmar are taking steps tostrengthen democratic governance and theirrelationship with citizens after decades of secrecysurrounding budget data and a lack of publicaccess to financial information.For example, for the 2017-18 financial year,Kayin, Bago and Tanintharyi State and RegionGovernments have launched Citizen’s Budgets,which are simplified versions of their subnationalgovernment budget.During the forum an interactive forum, a panelwas formed to discuss the issue of fiscal

transparency and public participation in thebudget and planning process.For example, U Aung Naing Oo, Member of theParliament Accounts Committee pointed to thecomposition of the PAC saying that it includedboth members of parliament and local citizenexperts.Budget Director U Ye Naing Aung outlined howthey had already published the Kayah Citizen’sBudget on Facebook. The panellists recognizedthat these mechanisms still need to be madestronger but also called for civil society to playtheir part in actively and constructively makinguse of the processes and budget informationalready in place.The panel also included, Zaw Min Htut, SeniorProgram Officer of the The Asia Foundation,which aims to strengthen subnational governancein Myanmar.

Source: Myanmar Timeshttps://www.mmtimes.com/news/budget-transparency-forum-held-kayah-state.html

NewspapersMyanmar Times

21 Aug 2018

PwC | August 2018 8

Japan to help Myanmar deal with waste

Japan will provide waste management technologyto Myanmar to help the country deal with itsburgeoning garbage problem.The aid was formalised in a memorandum ofunderstanding on environmental conservationsigned on Monday by Myanmar’s Ministry ofNatural Resources and EnvironmentalConservation and Japan’s Ministry ofEnvironment. “Japan will mainly assist us byproviding the technology. We will quickly learn toeffectively manage (our garbage) from Japan’s 20years of experience,” said U Kyaw San Naing,director of policy and legal affairs at theDepartment of Environmental Conservation.Japan will assist Myanmar in segregating wasteand disposing of it systematically.Among the different types of waste – kitchen,hospital and electronic – Myanmar is having themost trouble managing kitchen waste.“It is fundamental to dispose of kitchen rubbishby segregation, if we want to adopt Japan’sgarbage system. If rubbish is separated and sortedinto categories, garbage trucks can collect it bywaste type. This system will be gradually and

effectively implemented, though there are stillsome weaknesses,” U Kyaw San Naing said.In addition to promoting proper wastemanagement, Japan will also help in reducingcarbon emissions, conservation of biodiversity,and mitigating the effects of climate change.“Through this MoU, we can seek good advice andguidance based on their experience, knowledgeand technology,” said U Ohn Win, minister ofNatural Resources and EnvironmentalConservation. Japan is currently operating awaste-to-energy factory in Yangon. “Six energy-saving projects are planned,” the minister added.It is important to improve waste management forsustainable development, said Tadahiko Ito,Japan’s minister of Environmental Conservation.“We must cooperate practically. I hope thatthrough the concerted efforts of our twocountries, we can lay down a soundenvironmental conservation policy,” he said.

Source: Myanmar Timeshttps://www.mmtimes.com/news/japan-help-myanmar-deal-waste.html

NewspapersMyanmar Times

22 Aug 2018

PwC | August 2018 9

Yangon residents unhappy with YCDC: survey

A survey conducted by civil service groupAlinsaetamarn Library and Resource Centre hasrevealed that the majority of Yangon’s residentsare dissatisfied with the Yangon CityDevelopment Committee (YCDC).The survey, which polled the views of 1,205members of the public across Yangon, wasconducted in March.The results revealed that most residents areunhappy with the city’s garbage collection anddrainage system. In fact, more than three quarterssaid they were willing to pay more fees for bettergarbage collecting services and drainage. Around65 percent of those polled were also unhappy withthe traffic and road conditions in Yangon.Notably, few were satisfied with how the YCDCcommunicates important information to thepublic. According to the survey, only 7pc receiveinformation about the municipal budget andspending on projects.Meanwhile, 57 said they are not poorly informedabout the YCDC’s official procedure whengranting permits for construction and the qualitycontrols in place, while 70pc said there is no

transparency in the selling and renting of landowned by the regional government.Ma Ohnma, who runs the Alinsaetamarn Libraryand Resource Centre, said most of residents whoparticipated in the survey are unaware of theYCDC’s responsibilities and how the regionalbudget is expended. “We can see from the resultsof the survey that people don’t know what theYCDC does,” she said.The survey also found that most residents are ofthe view that the YCDC should not engage inowning private businesses.Since the survey was conducted in March, theYCDC has come up with a to-do list to improve itsperformance, including a public voting system forsenior positions such as mayor in future electionsand removing staff found to be corrupt.

Source: Myanmar Timeshttps://www.mmtimes.com/news/yangon-residents-unhappy-ycdc-survey.html

NewspapersMyanmar Times

22 Aug 2018

PwC | August 2018 10

CBM to discuss border trade with PBOC

The Central Bank of Myanmar (CBM) will meetwith the Peoples’ Bank of China (PBOC) todiscuss issues related to border trade, said deputygovernor U Bo Bo Nge. He was responding to aMyanmar Times question on whether local bankbranches would be set up to facilitate the flow ofmoney in and out of the country as a result oftrade at the Myanmar-China border.“As China is a major trade destination forMyanmar, we have been holding talks with theChinese Central Bank as well as the Departmentof Trade under the Ministry of Commerce (MOC)on ways to facilitate trade, especially Myanmarexports,” he said.Border trade between China and Myanmaraccounts for 80 percent of all trade taking place atthe Myanmar border. Yet, while Myanmarimposes duties on goods sold to China, the latterdeems the exports illegal. The Chinese banks arenot permitted to issue letters of credit orauthorise telegraphic transfers to settle payments.The Chinese government also restricts imports ofcommodities from Myanmar. Currently,Myanmar is permitted to export a quota of rice to

China using US dollars as the medium ofexchange. However, most of this forex quicklyflows back out of Myanmar when traders importgoods from China. In fact, as imports typicallyexceed exports, the supply of official forex usuallyruns short, so many local traders also use forexsupplied under the informal Hundi system totrade, U Bo Bo Nge said. The informal use ofcurrency and lack of a legal banking system tofacilitate trade at the Myanmar border placeslocal traders at a disadvantage. This is becausethere are no banks offering credit and paymentfacilities in Myanmar, so locals resort to openingrenminbi bank accounts in China to make andreceive payments.That places most merchants at a disadvantage. InMarch, China closed a total of 217 accounts ofMuse traders at the Agricultural Bank of China inYunnan province. The account holders weresuspected to have links to drugs and narcoticstrading.Source: Myanmar Timeshttps://www.mmtimes.com/news/cbm-discuss-border-trade-pboc.html

NewspapersMyanmar Times

23 Aug 2018

PwC | August 2018 11

Korean investments could kick start long-delayed construction of Dala Bridge

An industrial zone to be developed by the Yangonregional government and Myanmar Wooree Co, aSouth Korean firm, at the west bank of theYangon River could be the impetus needed forconstruction of the much-touted Dala Bridge tocommence.Once the bridge, which will connect downtownYangon to the western side of town, isconstructed, the new industrial zone is expectedto become a hotspot for investments. Now, plansare being made so that the Dala Bridge, alsoknown as the Myanmar-Korea Friendship Bridge,will be operational by 2020-21, said U Phyo MinThein, Yangon Region Chief Minister.The Yangon region government and MyanmarWooree Co on August 11 signed a Memorandumof Understanding to construct an industrial zonenear where the planned bridge connects to Dalatownship.There are also plans to construct industrial zonesin Kawhmu and Kon Chan Kone, which are part ofthe 11 new industrial zones proposed to theHluttaw for implementation in Yangon region.The zones are both also located at the west bank

of Yangon and will benefit from the bride.Although it is relatively near the Yangondowntown area, Dala remains undeveloped andaccessible via ferry or boats crossing the YangonRiver. In that light, the need for a bridgeconnecting the city to Dala is much in demand.In fact, talk of building the Dala Bridge was firstmooted six years ago. The project has yet to beimplemented owing to disagreements aboutmeasurements between the Ministry ofConstruction and Myanma Port Authority (MPA),which is under the Ministry of Transport andCommunications.Based on a press conference in June, the twoministries have agreed on a height of 49 metersfor the bridge, but have yet to agree on thedistance between the supporting pillars under thebridge.

Source: Myanmar Timeshttps://www.mmtimes.com/news/korean-investments-could-kick-start-long-delayed-construction-dala-bridge.html

NewspapersMyanmar Times

23 Aug 2018

PwC | August 2018 12

MNA suffers over Ks-18 billion in loss in three years

Myanmar National Airlines (MNA) suffers a lossof over Ks-18 billion during three fiscal years afterthe transformation into the company, accordingthe report by the Joint Public Account Committeefindings on the Union Auditor-General’s findingreport and comment for 2016-2017 FY.The MNA, which started its operations outside ofthe Union fund since 2013-2014 FY, has to takeover the Myanmar Airways’ money as well asmoveable and immoveable properties and salariesof retired staffs that moved to other departments.There was a loss of Ks-8.962 billion in 2015-2016FY, Ks-5.695 billion in 2016-2017 FY and Ks-3.401 billion in 2017-2018 FY.The MNA still suffer losses but the rate of lossesare declining. Currently, the MNA is offeringdomestic flight services to 27 towns and overseaflight schedules by 15 flights.The number of passengers reached 587,272 in2015-2016 FY, 1,027,904 in 2016-2017 FY and1,425,439 in 2017-2018 FY.The Union Auditor-General Office has suggestedthat the MNA’s operations sustained heavydamages during two years after the purchase of

more flights. The MNA should review andscrutinize its purchasing policies and proceduresas it has shown weaknesses in buying flights. Inaddition, the MNA’s cash account opening needsto follow the notification issued by the Ministry ofPlanning and Finance.With the approval from a cabinet meeting, thegovernment has to pay a loan of US$ 54.33million (375.406 million yun) taken by the MNAfor the purchase of three Xian MA-60 flights withthe loan of Ex-Im bank of China.The MNA has opened cash accounts at home andabroad, with the approval of the President’sOffice. The MNA is shifting its ticket sale systemfrom manual to IT and has appointed more than840 ticket sale agents. The MNA needs to upgradeits cash payment and remittance system as it isoperating domestic and foreign flight schedules.The MNA has to suffer losses as it has to purchasenew flights and/or hire flights as it has to keepabreast with other international airlines.Source: Eleven Myanmarhttp://www.elevenmyanmar.com/business/14679

NewspapersEleven Myanmar

23 Aug 2018

PwC | August 2018 13

Latest inclusion roadmap targets digital financial services

The change in the new roadmap for FinancialInclusion Roadmap (2018-2022) will involvecreating a digital services working group managedby Central Bank and Financial RegulatoryDepartment (FRD), U Zaw Naing, FRD directorgeneral, told The Myanmar Times.“The digital services working group members willbe drawn from the private sector, such asinsurance firms, private banks and micro-financeinstitutions. We will allow product by product[one by one] regarding digital finance. We arelatecomers for the cashless financial market,which other countries have already developed.”He pointed out that Myanmar usage for digitalfinancial services stood at 8pc, though 74pc of theworking population uses mobile phone. In recentyears, Myanmar has seen an expansion of formalfinancial sector due to an increase in private bankdepositors, as well strong growth in themicrofinance and cooperative sectors. The newroadmap will include financial literacy andcustomer protection.“Most people are worried about mobile bankingand digital financial services, about their cash

disappearing with a single click.“We conducted the survey for digital financialservices on 12,000 pensioners in North Dagontownship, only 600 people are able to use it. Someare not familiar with the app. Others don’t wantto use,” he continued. One reason they came tooffice to take pension is to meet with their friends.Financial literacy is paramount.The Financial Inclusion Roadmap (2018-2022)was based on a comprehensive survey of 5,500rural and urban households. “We will try andsubmit the roadmap to the cabinet at the end ofthe year,” U Zaw Naing explained. The 2018assessment, conducted during the beginning ofthat year, discovered a significant increase infinancial inclusion growth from the MAP (MakingAccess Possible) 2013 findings. Adult’s access toat least one formal regulated financial serviceincreased from 30pc in 2013 to 48pc today.

Source: Myanmar Timeshttps://www.mmtimes.com/news/latest-inclusion-roadmap-targets-digital-financial-services.html

NewspapersMyanmar Times

24 Aug 2018

PwC | August 2018 14

Vietnam Telecom Firm Viettel Eyes Philippine Market

HANOI — Vietnamese telecommunicationcompany Viettel has set its sights on thePhilippines as the next destination in its overseasexpansion drive, the company said on Thursday,as the archipelago’s economy clears the way forthe entry of a third operator.Fixing the Philippines’ notoriously patchy andexpensive telecom services was a campaignpromise of populist President Rodrigo Duterte,who had said late last year that a third playerwould join the market and end the duopoly ofPLDT Inc. and Globe Telecom Inc., which have acombined market capital of about $10.7 billion.“Viettel is interested in the third license ontelecommunications in this market,” the military-run Viettel Group, Vietnam’s largest mobilecarrier by subscription numbers, told Reuters inan emailed statement.“Viettel will thoroughly consider participating incase the conditions of the bidding documents arein line with the strategy of Viettel.”The Philippines’ Department of Information andCommunications Technology (ICT) issued draftrules this month on the entry of a third player,

which require foreigners to team up with localpartners holding congressional franchises.oreign ownership of a telecom firm in thePhilippines is capped at 40 percent, althoughEliseo Rio, the acting ICT head, told Reuters in arecent interview that moves were underway tochange that, so foreigners can raise their stakeslater on.The Philippines has one of the world’s largestrates of average daily social media usage, yetinsufficient infrastructure means its 105 millionpeople suffer frequent dropped calls, weak signalsand intermittent data.Viettel has already invested in 10 countries acrossAsia, Africa and America, and had 43 millionsubscribers overseas, as of the end of 2017.In June, Viettel and its local partners launched a$1.5 billion 4G network in Myanmar, makingthem the fourth telecom operator in the country.

Source: The Irrawaddyhttps://www.irrawaddy.com/news/asia/vietnam-telecom-firm-viettel-eyes-philippine-market.html

NewspapersThe Irrawaddy

24 Aug 2018

PwC | August 2018 15

Ooredoo mulls 5G for Myanmar

Ooredoo is preparing significant investment tobring 5G mobile networks to Myanmar, accordingto the company’s chief executive officer, VikramSinha.Ooredoo is celebrating 4 years in Myanmar andhas recently completed further testing of its 4GPro network upgrade project – a move which thecompany says demonstrates its readiness to bringnext generation networks to the people ofMyanmar.The 4G Pro network is capable of providingmobile customers in Myanmar with ultrafastspeeds of up to 500Mbps, some of the fastest inthe region.“The past five years have been something of awhirlwind as we have worked around the clock tobring connectivity to the four corners ofMyanmar. We have taken bold steps along theway, while always remaining true to our missionof enriching our customers’ digital lives. Wewould like to thank the people of Myanmar andour stakeholders for their ongoing support, withparticular thanks to our customers who arealways the main reason we continue to innovate,”

said Sinha, at an event in Yangon.A recent Ookla report revealed that Ooredoo hasthe fastest mobile network in the country, withthe most comprehensive coverage.Ooredoo says that its 4G network already covers92 per cent of the population and that its fibrenetwork stretches over 15,000km across thecountry.

Source: Consult Myanmarhttps://consult-myanmar.com/2018/08/24/ooredoo-mulls-5g-for-myanmar/

NewspapersConsult Myanmar

24 Aug 2018

PwC | August 2018

2. Weekly Key Policy News

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PwC | August 2018

Weekly Key Policy NewsHeadlines

ILO clarifies on disability hiring, minimum wage and holidays

Construction board to be formed under new law

Bill enabling casinos to operate submitted

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Yangon to allow car import under quota system

12-point suggestion submitted to control unstable currency exchange rate$

PwC | August 2018 18

ILO clarifies on disability hiring, minimum wage and holidays

Myanmar’s minimum wage, which is revised onceevery two years, applies to all regions and statesof the country and all sectors and businesses,except small and family-run businesses withfewer than 10 employees. In theory, managementbodies of Special Economic Zones can also table adifferent rate for the National Committee forMinimum Wage to consider.Meanwhile, the 2015 Disabilities’ Rights Lawmakes provision for the introduction of a quotafor hiring people with disabilities but the leveland implementation arrangements have not yetbeen issued. It will be mandatory thatmanagement pays to the funds established for therights of the people with disabilities if the quota isnot met, but the implementation arrangementshave not yet been issued.The International Labour Organisation (ILO)released a Myanmar labour law FAQs foremployers last month, clarifying issues such asminimum wage, paid leave and holidays.Minimum wageThe National Committee for Minimum Wage setsthe minimum wage. Employers should be aware

that the minimum wage should be revised at leastevery two years, provided in Section 5(h) of the2013 Minimum Wage Law. In practice, the factthat the review process starts every two yearsdoes not necessarily mean that a final decision ismade every two years.The latest review started in April last year withthe establishment of the new National Committeefor the Review of the Minimum Wage, whichincluded representation of both employers andworker organisations and independent experts.After a round of negotiations and consultationsnationwide, the committee announced itsrecommendation in late December 2017.Eventually, it released the new minimum wagerate on May 14 with the approval of thegovernment. The new minimum wage becameeffective as of the day of announcement - K4,800per day or K600 per hour.

Source: Myanmar Timeshttps://www.mmtimes.com/news/ilo-clarifies-disability-hiring-minimum-wage-and-holidays.html

NewspapersMyanmar Times

21 Aug 2018

PwC | August 2018 19

Construction board to be formed under new law

A law is being drafted to establish a ConstructionIndustry Development Board (CIDB) which willset standards for the construction industry, UKyaw Lin, deputy minister of the Ministry ofConstruction told the Pyidaungsu Hluttaw onAugust 20.The new law is being drafted with help from theBuilding and Construction Authority of Singaporeand the Malaysian CIDB.U Kyaw Lin said the law will make sure thatconstruction businesses across the countrycomply with international standards on safety,health and the environment. An officialconstruction management manual setting normsfor the industry will also be rolled out.“After the legislation process is completed, asimple construction management manual will bereleased,” he said, adding that, “in it, requiredmeasures such as setting up a fire alarm systemwill be included.”If a CIDB is established, rules enabling a morelevel playing field for larger constructioncompanies and smaller ones can be set. The newlaw will cover both public and private projects

and aim to generate more transparency in the bidand tender process as well as public spending.“Standardised regulations and specifications,such as the allowable height or whetherdevelopers are allowed to build a mezzanine floor,will be set for the industry,” he said. It will alsoinclude a minimum standard of quality involvingthe type of building materials used. This willdiscourage developers from cutting corners toreduce costs and ensure projects are completedon time.Following the enactment of the new law, theMinistry of Construction will relinquish itssupervisory role over the construction ofbuildings to the state and regional governments.Meanwhile, officials found to be involved incorruption will be removed. Although there arethousands of construction companies inMyanmar, few have good track records andexperience in building high quality buildings.

Source: Myanmar Timeshttps://www.mmtimes.com/news/construction-board-be-formed-under-new-law.html

NewspapersMyanmar Times

22 Aug 2018

PwC | August 2018 20

Bill enabling casinos to operate submitted

The Public Affairs Management Committeesubmitted the Gambling Bill 2018 to PyithuHluttaw on August 21. If the bill, which includesamendments the 1986 Gambling Act, is acceptedby the hluttaw, foreigner-only casinos will likelybe permitted to operate in Myanmar.The benefits of the casino business are expectedto be two-fold, as it will not only bring moretourists and tax revenues. The casinos are alsoexpected to draw more foreign currency into thecountry at a time when a shortage of US dollars isdriving down the value of the kyat.Currently, gambling businesses are banned inMyanmar. “But once the hluttaw approves theamended bill, casinos will be allowed to open inMyanmar,” said U Aung Hlaing Win, an MP fromMingaladon township.He added that due to the needs of the economy,there is “no time” to write a new legistlation andthat rules and bylaws to the existing bill will beadded once amendments to the legislation isapproved and enforced.U Kyaw Soe Lin, secretary of the Bill Committee,said the casinos will likely be opened near the

Myanmar border areas to attract more foreignersfrom neighbouring Thailand and China.However, the casinos are strictly out of bounds forlocals. Meanwhile, opening casinos in touristhotspots steeped in culture and heritage such asBagan will be prohibited.“Only foreigners will be allowed into the casinos.As such, the government will target areas with themost foreigners, such as near the border,” said UAung Hlaing Win.U Aung Hlaing Win pointed out that Macau, theonly territory of China where gambling is legal,has a budget surplus that is five times Myanmar’sdeficit. If the casino business is permitted, theMyanmar government will receive income fromcasino licenses as well as taxes on winners andcasino operators, which will help it offset part ofthe budget deficit, expected to hit K4.9 trillionthis year.

Source: Myanmar Timeshttps://www.mmtimes.com/news/bill-enabling-casinos-operate-submitted.html

NewspapersMyanmar Times

22 Aug 2018

PwC | August 2018 21

Yangon to allow car import under quota system

Vehicle import in Yangon Region will be allowedunder Yangon Vehicle Quota Certificate (YVQC)system, and the quota will be announced inOctober, Yangon Region chief minister Phyo MinThein told a press conference on clarification ofthe government's functions in the second year ofthe term on August 24."We are planning to issue Yangon car licencesunder YVQC system in the import of cars toYangon Region. Starting from coming October,Yangon car quota will be set under YVQC system.Only then will we be able to drive with a Yangonofficial licence. We will also be able to control theincreasing number of cars in Yangon," said thechief minister.Under the YVQC system, a car import permit willhave to be purchased with the price ranging fromK3 million to K9 million depending on enginepower. Car importers can apply for YangonRegion licences.Phyo Min Thein said Yangon's car trading systemin which cars are imported and sold on a smallscale is a challenge. He stressed the need to opencar sales centres in accord with the law and

procedures. Current sales of cars in Yangon couldbe described illegal, he added.The chief minister said it was necessary tosystematically open car sales centres for bothimported brand new cars and used cars."In allowing people to import cars on a small scalefor private use, we have found that most peopleimported their cars and sold them for businesspurposes. This is not because they don't want touse their cars. Actually, cars have been importedfrom Japan to create an illegitimate car tradingmarket," the chief minister commented.There have been discussions between the unionand Yangon Region governments to adopt a newcar import system for traffic control. The newunion vehicle law carries a provision allowingimport of brand new cars and making efforts toimprove car manufacturing in Myanmar, said thechief minister.

Source: Eleven Myanmarhttp://www.elevenmyanmar.com/business/14726

NewspapersEleven Myanmar

25 Aug 2018

PwC | August 2018 22

12-point suggestion submitted to control unstable currency exchange rate

Ye Min Aung, Vice President of the Union ofMyanmar Federation of Chambers of Commerceand Industry submitted a 12-point suggestion tothe private sector development committee led byVice-President Myint Swe.The move aims to deal with the instability ofcurrency exchange rates systematically by theUnion government and the Central Bank ofMyanmar. He suggested the government shouldcontrol quota, tariff rate quota, minimum access,standard, specifications, tax and customs systemfor imported goods.His suggestion also includes the expansion oftrade financing for overseas banks, theimplementation of bilateral currency swapschemes with major trading partners such as theuse of Chinese Yuan and Thai Baht for tradingwith those countries, the development ofinterbank currency market under the supervisionof the central bank and the formation of workinggroups for the rapid establishment of import-export public bank with the inclusion of local andforeign shareholders.In addition, he suggested tax reliefs for export

industry to effectively promote the export sector,the formation of National Export PromotionCouncil to penetrate local products to theinternational market and coordination for fruitfultrade, coordination with relevant trading partnerson official trading and the extensive use of banksin border trades due to a drop in the inflow of 40per cent of export earnings into local banks, theissuance of directives that ban the use of moredollars in settlement, the expansion of privateforeign remittance services for an massive inflowof salaries sent by Myanmar migrant workers,helping foreign investors for the inflow of capitalbrought-in, creating business-friendlyenvironments on the ground, the extension ofstaff strength of customs department to offerround-the-clock services for export industry andthe swift scrutiny of the inflow of loans andinvestments of foreign micro finance companiesby the central bank and the Ministry of Planningand Finance.Source: Eleven Myanmarhttp://www.elevenmyanmar.com/business/14726

NewspapersEleven Myanmar

26 Aug 2018

PwC | August 2018

3. Weekly Investment News

23

PwC | August 2018

Weekly Key Investment NewsHeadlines

Myanma Awba opens new agrochemical production complex in Yangon

Japanese investors eye retail sector investments in Myanmar

Yoma Bank extends $5m debt to microfinance entity VisionFund Myanmar

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Myanmar, Japan to build Aung San National Green Park in Yangon

Amata Holding preps for YSX listing on back of strong tourism potential

PwC | August 2018 25

Myanma Awba opens new agrochemical production complex in Yangon

Myanma Awba Group, Myanmar’s largestmanufacturer and distributor of agriculturaltechnology, launched Myanmar’s first privateagrochemical production complex in YangonRegion on August 19.The US$35 million Hmawbi Agricultural InputComplex (HAIC) is located near Wa Nat KyaungVillage in Hmawbi Township, occupying 126 acresof land.Myanma Awba is providing up to $25 million tofinance the HAIC, while the remaining funds havebeen provided by the International FinanceCorporation (IFC).The agriculture sector contributes almost a thirdof the country’s GDP and provides jobs for at least70 percent of the population.Despite this though, agrochemicals such asfertilisers and pesticides, which are necessary foragriculture, are mostly imported. As high qualityagrochemicals are encouraged, farmers are seeingtheir costs of production rise by the year.To ease that load, HAIC will manufacture morethan 200 proprietary agrochemical blends whichit will distribute at an affordable price to local

farmers. This will reduce the cost of productionper acre for each farmer, U Aung Thu, unionminister of Ministry of Agriculture, Livestock andIrrigation, said at the opening ceremony.Based on his estimates, a local production plantcan help to reduce farmers’ costs up to 20 percentand raise competitiveness.By 2021, HAIC expects to supply around half ofMyanmar’s agrochemical demands, said UThadoe Hein, chair and CEO of Myanma Awba.“Given the importance of the agriculture sector inMyanmar, it is time for us to take charge anddevelop our capacity and capabilities inagrochemical formulation technology,” he said.HAIC is aiming to manufacture 3.3 million-10.3million liters of insecticides, fungicides andherbicides in concentrate form within the nextfour years. It will also manufacture 1.7 million-5million kilograms in powder form.

Source: Myanmar Timeshttps://www.mmtimes.com/news/myanma-awba-opens-new-agrochemical-production-complex-yangon.html

NewspapersMyanmar Times

20 Aug 2018

PwC | August 2018 26

Japanese investors eye retail sector investments in Myanmar

Wholesalers and retailers from Japan, Thailandand South Korea met with the Ministry ofCommerce (MOC) to discuss investments in theMyanmar retail sector, said U Yan Naing Tun,director general of the Department of Tradeunder MOC.Among the companies was Japanese retailer AeonCo, which invested in the Myanmar retail sectorunder a joint venture – Aeon Orange Company -with local partner Creation Myanmar Group ofCompanies (CMGC) in August 2016.Aeon Orange Co acquired 14 supermarketsoperated by Hypermart Asia Co, an affiliate ofCMGC. It opened its first store in NorthOkkalapa, Yangon, in September during the sameyear.The Myanmar Times understands that Aeon iseyeing opportunities to further expand itspresence in Myanmar.“Interest from Japanese, Thai and South Koreaninvestors has spiked since the MOC allowedforeigners to wholly-own wholesale and retailbusiness in Myanmar,” said U Yang Naing Tun.“We are in the process of reviewing proposals to

invest in the sector from foreign companies,” UYan Naing Tun, said.The MOC issued Notification 25/2018, whichauthorises 100 percent foreign-owned companiesas well as joint ventures between internationaland domestic investors to carry out retail andwholesale businesses in the country, on May 9.Under the new rules, 100pc foreign-owned firmsmust make initial investments of US$3 millionand $5 million to operate a retail or wholesalebusiness, respectively, in Myanmar. Meanwhile,for joint ventures with foreigners where the localinvestor has at least a 20pc equity ratio, the initialinvestments necessary for retail and wholesale are$700,000 and $2 million, respectively.On July 26, the MOC issued standard operatingprocedures (SOP) for retail and wholesalebusiness registrations as well as a list of productsallowable for trade.

Source: Myanmar Timeshttps://www.mmtimes.com/news/japanese-investors-eye-retail-sector-investments-myanmar.html

NewspapersMyanmar Times

21 Aug 2018

PwC | August 2018 27

Yoma Bank extends $5m debt to microfinance entity VisionFund Myanmar

Yoma Bank has signed an agreement to provide aK7 billion ($4.9 million) loan to VisionFundMyanmar, a microfinance entity that serves over180,000 clients in the frontier market.VisionFund Myanmar is a subsidiary ofVisionFund International (VFI) – both affiliatedwith World Vision. Globally, VisionFundInternational has a network of microfinanceinstitutions in over 30 countries. VisionFundMyanmar is one of the MFIs in Myanmar that hasa large geographical coverage, serving both ruraland urban communities. It has 48 branches in 12regions in the country. “This marks an importantmilestone for VisionFund since this signals for usthe beginning of unlocking domestic sources offunds to support our mission on povertyalleviation,” said Rommel Caringal, CEO ofVisionFund Myanmar. Last year, VisionFundMyanmar received $4-million loan from theJapan ASEAN Women Empowerment Fund andMicrofinance Initiative for Asia Debt Fund, bothmanaged by impact investment managerBlueOrchard Finance Ltd. The InternationalFinance Corporation, a member of the World

Bank Group, has also been providing financialassistance to VisionFund Myanmar in the form ofdebt facility. The latest funding is Yoma Bank’seighth MFI funding agreement. It has previouslyextended debt facilities to Pact GlobalMicrofinance Fund, Advans Myanmar, AIM-listed Myanmar Investments International, MahaAgricuture and BRAC Myanmar Microfinance CoLtd. “The social impact of Yoma Bank’s fundingthrough VisionFund is particularly welcome asthey support low income families,” Hal Bosher,Advisor to the Chairman and CEO of Yoma Bank.

Source: Deal Street Asiahttps://www.dealstreetasia.com/stories/yoma-bank-extends-5m-debt-to-microfinance-entity-visionfund-myanmar-105248/

NewspapersDeal Street Asia

22 Aug 2018

PwC | August 2018 28

Myanmar, Japan to build Aung San National Green Park in Yangon

Japan and Myanmar will sign and an MOU todevelop and international-standard mixeddevelopment project near the KyaikkasanStadium in Tamwe township, Yangon, Daw KhinSan Hlaing, member of the National EconomicCo-ordination Committee, told The MyanmarTimes.On August 19, the government met with residentsof Kyaikkasan to explain the project, which willinclude international-standard sports andrecreational facilities as well as a businesscomplex.The new Aung San National Green Park willinvolve Japan investing in the sports andrecreational area, while Myanmar will focus onbuilding the business complex, which will bedeveloped over one third of the 100 acreKyaikkasan sports area.The government will lease the land at Kyaikkasanfor US410 million per year for the businesscomplex. Meanwhile, Japan will pay Myanmar$100 million in national development funds aswell as an additional $100 million for the buildingmaterials and infrastructure needed for the sports

area, according to the National Economic Co-ordination Committee.The project had actually been mooted during theformer government’s term. At the time, both sideshad agreed to develop a sports complex andCentral Business District. The project involvedJapanese mall operator Aeon Co investing in asupermarket and shopping center in the area,according to the website of the Ministry ofNatural Resource and EnvironmentalConservation in 2015. However, negotiationswere not completed and development of theproject did not get off the ground.Based on the new government’s relationship withJapan, discussions to develop this project havesince recommenced.

Source: Myanmar Timeshttps://www.mmtimes.com/news/myanmar-japan-build-aung-san-national-green-park-yangon.html

NewspapersMyanmar Times

22 Aug 2018

PwC | August 2018 29

Amata Holding preps for YSX listing on back of strong tourism potential

U Win Aung, CEO of Amata Holding PublicCompany, is preparing to list his company on theYangon Stock Exchange (YSX) to take fulladvantage of the upcoming opportunities hebelieves lie ahead for the Myanmar tourismindustry.“There are actually many multi-nationalcompanies looking to invest in tourism as theindustry holds great potential for growth. But it isstill a very immature industry so foreign investorsare all monitoring the progress on the sidelinesuntil they are ready to enter,” U Win Aung toldThe Myanmar Times in an interview.“We want to secure our position and expand ourpresence in this industry so we can be ready tocooperate with the big boys when they enter thecountry. We also changed our status to public inanticipation of the new regulations under theCompanies Law which allows foreigners to investup to 35 percent in public firms,” he added.Amata Holding operates four hotels and resorts inBagan, Inle Lake and Ngapali under the Amatabrand. It also runs its Oriental Ballooning hot-airballoon services in Bagan, Inle Lake, Mandalay

and Ngapali.The company, which started out as a familybusiness in 2003, first applied to the Securitiesand Exchange Commission of Myanmar (SECM)to conduct a public offering in 2016. It is now inthe midst of completing the two-year process toqualify as a public-listed company on the YSX andis one of the four companies under the SECM'sList of Approval of Public Offering.In fact, Amata Holding had initially sought alisting on the Singapore Exchange but changed itsmind after YSX-listed First Myanmar InvestmentCompany brought its tourism arm, MemoriesGroup, to market on the Singapore bourse inJanuary.“As there is already another Myanmar tourismgroup listed in Singapore, we decided to list onthe YSX to tap investors here instead,” said U WinAung.

Source: Myanmar Timeshttps://www.mmtimes.com/news/amata-holding-preps-ysx-listing-back-strong-tourism-potential.html

NewspapersMyanmar Times

24 Aug 2018

PwC | August 2018

3. Weekly New Tenders

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PwC | August 2018

Tenders (Myanmar)List

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

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No applicable Tenders announced for the week ending 24 August 2018

PwC | August 2018

Tenders (Multilateral organizations) List

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

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ADB: TA-9074 MYA: Project Management Specialist (49297-001), Closing Date: 31 August 2018 (Individual)

PwC | August 2018

4. MIC Permitted Projects

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PwC | August 2018

MIC Permitted Projects (Meeting 12, 2018)

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No. Name of Company Type of Investment Form of Investment

1 Go Excellent (Myanmar) Co., LtdAssembling manufacturing and sales of motor vehicles

Joint Venture

2 Aida Amazing Co., LtdManufacturing and sales of waste recycle products

Joint Venture

3 Myint Dachan Co., Ltd Production and sales of animal feed Joint Venture

4 Myint Dachan Co., Ltd Poultry breeder farm and hatchery Joint Venture

5 Great Wall-Zhong Neng Co., LtdManufacturing and sales of plywood and blockboard by using eucalyptus

Joint Venture

Source: DICA

PwC | August 2018

5. Upcoming Events

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PwC | August 2018

Upcoming Events (September 2018) List

Date Location Name of Event Sector Price Focus Points

11-12 Sep 2018 NaypyitawMyanmar Global Investment Forum 2018

Investment forums

Free

“offer expert insights into the industries key to the Myanmar economy. With in-depth explorations of the infrastructure, energy, oil and gas, agriculture and tourism markets, this event offers a comprehensive overview and a unique opportunity to understand the prospects of this exciting frontier market can offer”

18-19 Sep 2018 Yangon Myanmar Connect 2018 Telecoms1200per pass

“Myanmar Connect is the only conference to connect the entire telecoms industry within Myanmar and this year will explore the telecoms sector and the wider ecosystem in Myanmar’s continued journey towards a digital future.”

26-28 Sep 2018 Yangon Agri Myanmar Agriculture Free

“Agri Myanmar is the leading agriculture event in Myanmar promises great chances for business cooperation, networking, potential market entry, as well as for exchanging useful information and innovative ideas.”

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

© 2018 PricewaterhouseCoopers Myanmar Co Ltd. All rights reserved. In this

document, “PwC” refers to PricewaterhouseCoopers Myanmar Co Ltd, which is

part of the network of member firms of PricewaterhouseCoopers International

Limited, each of which is a separate and independent legal entity.

www.pwc.com/mm

PwC Myanmar Weekly Business Intelligence Publication

For further information please contact:

Jovi SeetSenior Executive Directorjovi.seet@sg.pwc.com

Brandon LyeDirectorbrandon.ys.lye@sg.pwc.com

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