pwc myanmar weekly business intelligence · 2019-12-02 · pwc | november 2019 weekly key financial...

PwC MyanmarWeekly Business Intelligence

Issue 18930 November 2019

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PwC | November 2019

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PwC | November 2019

1. Weekly Key Financial & Business News

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PwC | November 2019

Weekly Key Financial & Business NewsHeadlines

With 70% Unbanked Population, Myanmar Bets on Fintech to Improve Financial Inclusion

China seeks road, river route via Ayeyarwady for economic corridor

Real estate sector pulls in highest FDI of over $270 mln in Oct

Chin State to get airport

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Myanmar awards insurance licences to five foreign providers, six joint ventures

PwC | November 2019

Weekly Key Financial & Business NewsHeadlines

Myanmar Inks Four Agreements With S.Korea to Cooperate on Education, Environment, Tech

Final round of bidding for Yangon parking system

ADB approves $195 million financing package for development

Land bank to go online

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Nay Pyi Taw real estate market seeing growth

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PwC | November 2019 6

China seeks road, river route via Ayeyarwady for economic corridor

China is planning to build vital trade and logisticslinks with Myanmar along the Ayeyarwady Riveras part of the China-Myanmar Economic Corridor(CMEC) to bypass poor road infrastructure.Proposed by China in November 2017 as part ofits global Belt and Road Initiative, the CMEC isexpected to connect China’s Yunnan Provincewith Mandalay in central Myanmar beforebranching southeast to Yangon and southwest toRakhine.The Chinese have commenced feasibility studieson a road and river route linking Kunming toMandalay and Yangon via the Ayeyarwady, saidPresident of China Kunming South Asia &Southeast Asia International Logistics ResearchInstitute Liu Jinxin during a forum in Yangon thismonth.He said that on the China side, railroads andbonded warehouses have already beenconstructed at Kunming Tenjun International DryPort.On the Myanmar side though, Mr Liu saidsupporting infrastructure such as inland riverports and other facilities will be needed along the

Ayeyarwady. Myanmar will need helpconstructing a port in Bhamo, the Kachin citylocated by the Ayeyarwady.“Currently, infrastructure along the AyeyarwadyRiver is still weak,” Mr Liu said, adding that basedon the conditions of the river, facilities like portswould be a challenge to build without help.U Hla Oo, chair of the Cross-Border TradeDevelopment Committee, said this is due to highsilt levels in the river. “We will have troubleclearing the silt in a cost-effective and systematicway. The conservation work involved will be veryexpensive,” he saidNevertheless, investors from Japan andSingapore have shown interest in port projectsalong the Ayeyarwady, which is the country’slargest river.

Source: Myanmar Timeshttps://www.mmtimes.com/news/china-seeks-road-river-route-ayeyarwady-economic-corridor.html

NewspapersMyanmar Times

25 Nov 2019


With 70% Unbanked Population, Myanmar Bets on Fintech to Improve Financial Inclusion

Despite the Myanmar government’s push toexpand access to financial services, the countrystill trails far behind the rest of Asia in rates ofparticipation in formal financial services, financialliteracy, savings rates and the use of digitalfinancial services, according to a new report bysocial enterprise ONOW Myanmar. But fintechand mobile technology promise to greatlyimprove financial inclusion.Financial inclusion is still very low in Myanmarwith only 6% of adults using more than onefinancial product. Products and services are notfully meeting the needs of the population, andlimited infrastructure is constraining businessmodel and product offerings, in particular forrural areas, ONOW says in a report titledCapabilities in Digital Financial Services: Calmingthe Fears of Myanmar’s Unbanked.How Myanmar is pushing for financial inclusionTo support financial inclusion, the MyanmarMinistry of Planning and Finance, in partnershipwith UK-funded DaNa Facility, and the UnitedNations Capital Development Fund (UNCDF)Myanmar, has set out ambitious goals through its

Financial Inclusion Roadmap, a strategy referredto as Making Access Possible (MAP).Among other goals, Myanmar aims to increasefinancial inclusion from 30% in 2014 to 40% by2020, and adults with more than one productfrom 6% to 15%, by supporting the developmentof a full range of affordable, quality and effectivefinancial services.Since the plan was launched in 2013, Myanmarhas seen a significant increase in financial access.A report released in 2018 as part of the MAPprogram found that adults with access to at leastone formal financial product increased from 30%in 2013 to 48% in 2018, an almost two thirdsincrease in financial inclusion, surpassing theinitial 2020 target of 40%.

Source: Consult Myanmarhttps://consult-myanmar.com/2019/11/25/with-70-unbanked-population-myanmar-bets-on-fintech-to-improve-financial-inclusion/

NewspapersConsult Myanmar

25 Nov 2019


Real estate sector pulls in highest FDI of over $270 mln in Oct

The real estate sector recorded the highest shareof foreign fund inflows at US$274.68 million inOctober, the first month of the current financialyear, after Hong Kong-listed Amata Companyinvested in the development and operation ofSmart and Eco City and related businesses on2,000 acres of land near East and South Dagontownships.In October, six other enterprises invested over$10 million in the manufacturing sector, whiletwo enterprises pumped in $6.47 million into theother services sector, according to statisticsreleased by the Directorate of Investment andCompany Administration (DICA).So far, domestic investments from 87 enterprisesin the real estate sector have reached K4,421billion, according to the DICA.More than 22 per cent of domestic investmentsmade by Myanmar citizens have flowed into thereal estate sector, while investments have alsobeen made in manufacturing, hotels and tourism,construction, industrial estate, energy, mining,livestock and fisheries, agriculture, and otherservices sectors, according to the DICA.

Realtors are expecting the reduced income tax tostimulate the realty market, which has been coolfor the last three years. They also anticipate theapproval of a real estate service law, which wouldregulate informal deals and prevent buyers andsellers from being defrauded by unscrupulousrealtors, according to real estate officials.At present, buyers and sellers have been forced toavoid paying taxes, owing to high appraisal andtax rates. Most dealers are informally carrying outreal estate deals using only the special andgeneral power of attorney, said realtors.The reduction in taxes is likely to persuadetraders who evaded taxes in previous years to paytaxes and make changes in ownership, theyadded.For the 2019-2020 financial year, the standardland price per square foot in Yangon’s townshipshas been reduced by 10 per cent compared to theyear-ago period..Source: The Global New Light of Myanmarhttps://www.globalnewlightofmyanmar.com/real-estate-sector-pulls-in-highest-fdi-of-over-270-mln-in-oct/

NewspapersThe Global New Light of Myanmar

26 Nov 2019


Chin State to get airport

Myanmar is building an airport in themountainous Falam township of Chin state tobring more tourists to the region. Xinhuareported.The authorities are using a state budget of 19.93billion kyats (13.28 million U.S. dollars) for thefirst phase of the Surbung Airport project,according to the Department of Civil Aviation lateon Monday.Runways, terminals and navigation facilities arebeing built and 58.3 percent of the airportconstruction work are said to have beencompleted.It is hard for people to move within the state dueto the lack of reliable transport infrastructure andin the monsoon season, landslide and floods makeit almost impossible to travel.

Source: Mizzima Newshttp://mizzima.com/article/chin-state-get-airport

NewspapersMizzima News

27 Nov 2019


Myanmar awards insurance licences to five foreign providers, six joint ventures

The Financial Regulatory Department todayawarded licences to five foreign insurers and halfa dozen joint ventures to operate in the Myanmarmarket.British Prudential, Japanese Dai-ichi Life, HongKong AIA, US Chubb and Canadian Manulife havebeen permitted to issue life insurance policies inMyanmar with their fully-owned subsidiary, morethan half a year after the five insurers weregranted provisional licences.The approval marked Myanmar’s first-everlicencing to foreign fully-owned life insurers.The Department also granted licences to three lifeand three non-life joint ventures between foreignand local firms. Three JVs for non-life insuranceare between AYA Myanmar General Insuranceand Sompo Japan Nipponkoa Insurance; GrandGuardian General Insurance and Tokio Marine &Nichido Fire Insurance; and IKBZ Insurance andMitsui Sumitomo Insurance. Another three lifeJVs are between Capital Life Insurance and TaiyoLife Insurance; Citizen Business Insurance andThai Life Insurance; and Grand Guardian LifeInsurance and Nippon Life Insurance.

Insurance liberalisation is a flagship reform ofDaw Aung San Suu Kyi’s government, albeit onetarnished by repeated delays, executives say. Heradministration had initially committed to openingup the insurance market in the first quarter of2017 and pressure was building for the ministry tofollow through the pledge.The finance ministry announced it would grant upto three life insurance licences to foreigncompanies a day after The Myanmar Times onJanuary 1 revealed that Samsung Life Insurancehad shut down its Myanmar subsidiary. In April,it awarded provisional licences to five instead.Despite the delays, international insurers remainkeen to tap into a market where current insurancepenetration is among the lowest in the world.

Source: Myanmar Timeshttps://www.mmtimes.com/news/myanmar-awards-insurance-licences-five-foreign-providers-six-joint-ventures.html


28 Nov 2019


Final round of bidding for Yangon parking system

The Yangon City Development Committee(YCDC) is preparing for a final tender onNovember 29 for the implementation of a smart-parking system in Yangon.U Lin Khaing, secretary of the YCDC’s road andbridge subcommittee said the final tender willtake place this month for the parking system insix of Yangon’s townships.It is hoped the parking system will help to curbthe indiscriminate parking that has often beenblamed for the traffic woes of the country’scommercial capital.According to U Lin Khaing, 26 companies hadsubmitted initial bids for the parking system andsix have been selected to participate in the finaltender.“We’ve approved the final tender this week andwe will choose the best candidate for the project,”U Lin Khaing said during a press briefing on theproject last week.Once the system is up and running, YCDC says isplans to collect parking fees of K200, K300, andK500 per hour depending on the type of vehicle.The YCDC said should the smart-parking system

prove successful, then it will be implemented inother parts of the city.“If the authorities want to collect parking fees, weare ready to pay it. But, they have to make surethere are enough parking bays. I think the biggerproblem is the lack of parking bays in the city,”said business owner U Yan Win when asked hisopinion on the parking system.The Yangon Region government announced lastyear that an advanced parking system will be setup to tackle the problem of the lack of parkingspace, which is often blamed for the daily trafficcongestion in the city.The YCDC hopes that the new system will stoppeople parking indiscriminately especially if thefee collection for parking is enforced .Of the more than one million registered vehiclesin the country, some 600,000 are registered inYangon.

Source: Myanmar Timeshttps://www.mmtimes.com/news/final-round-bidding-yangon-parking-system.html


28 Nov 2019


Myanmar Inks Four Agreements With S.Korea to Cooperate on Education, Environment, Tech

YANGON—Myanmar signed four Memorandumsof Understanding (MOUs) with South Korea oncooperation on fisheries; technical and vocationaltraining; the environment; and development ofdigital economy, higher education, smart citiesand connectivity during State Counselor DawAung San Suu Kyi’s trip to Busan earlier thisweek.The State Counselor visited the city from Nov. 25-27 to attend the ASEAN-ROK CommemorativeSummit and 1st Mekong-ROK Summit, which area part of Korea’s New Southern Policy to deepenrelations, including economic ties, with SoutheastAsian nations.Daw Aung San Suu Kyi held a bilateral meetingwith South Korean President Moon Jae-in duringthe ASEAN-ROK Commemorative Summit onTuesday. After the meeting, three MOUs weresigned between the two countries— “Cooperationin Fisheries”, “Cooperation in the Field ofTechnical and Vocational Education andTraining” and “Comprehensive EnvironmentalCooperation”.Another MOU on development cooperation was

signed between South Korea and five ASEANcountries including Myanmar at a ceremony tomark the 2019 International DevelopmentCooperation Day.Under the latter agreement, South Korea and fiveASEAN countries (Myanmar, Cambodia, Laos,Vietnam and the Philippines) pledge tostrengthen cooperation in the areas of digitaleconomy, higher education, eliminating explosiveremnants of war, smart cities and connectivity.During the meeting with Daw Aung San Suu Kyi,Moon pledged to enhance the Seoul-Naypyitawpartnership, with a particular focus on expandingcooperation on culture, education, agriculture,fisheries, environment, infrastructure and ruraldevelopment as well as fostering people-to-peoplecontacts, according to a press release from theMyanmar Ministry of Foreign Affairs.

Source: The Irrawaddyhttps://www.irrawaddy.com/news/burma/myanmar-inks-four-agreements-with-s-korea-to-cooperate-on-education-environment-tech.html

NewspapersThe Irrawaddy

28 Nov 2019


ADB approves $195 million financing package for development

The Asian Development Bank (ADB) hasapproved a $195 million financing package for aproject that will develop climate-resilient andmarket-oriented infrastructure and livelihoods in2,942 villages in Myanmar’s Ayeyarwady, Chin,Sagaing, and Tanintharyi regions. This will helpreduce rural poverty and strengthen the villages'climate and disaster resilience, benefiting around1.8 million people, according to a statement.The project will help identify, develop, and fund3,000 climate- and disaster-resilient communityinfrastructure subprojects, which include villageaccess or farm roads, small bridges, water supply,electric grid connection, and multipurposecenters. These infrastructure subprojects, whichwill be selected based on their contribution to thevillage’s resilience as well as public and economicbenefits, will have a strong gender component,with women comprising 40% of the laborrequirements in their construction andoperations.“Myanmar is one of the most vulnerable countriesto climate and disaster risk, and people living inthe country’s rural areas face the greatest threat,

given the lack of development and climateresilience there,” said ADB Natural Resources andAgriculture Specialist for Southeast Asia Ms.Stefania Dina. “ADB’s project will help ensurethat people in the rural areas of Myanmar havethe necessary capacity, support, and know-how todeal with the effects of climate change, whilehelping them get out of poverty throughlivelihood support.”Myanmar’s rural areas are largelyunderdeveloped, with only 16% of the populationhaving access to electricity, about 30% lackingaccess to year-round drinking water, and 25% notconnected by any road. Traditional agriculture,which is highly dependent on weather patterns, isthe main source of rural livelihoods, accountingfor 25.7% of the country’s gross domestic productand 49% of employment. Climate change putsMyanmar’s rural population at risk, affecting theirproductivity and exposing them to naturalhazards and other climate-related vulnerabilities.Source: Mizzima Newshttp://mizzima.com/article/adb-approves-195-million-financing-package-development

NewspapersMizzima News

28 Nov 2019


Land bank to go online

Myanmar’s land bank will be fully digitalised andonline access given to investors applying for landon which to do business in the country,” said UThaung Tun, chair of Myanmar InvestmentCommission.Obtaining land is the main challenge for bothlocal and foreign investors when they set upbusinesses in Myanmar.The country is already making several economicreforms, and aims to accelerate the reforms, saidU Thaung Tun, and the setting up of the onlineland bank is one of the priorities of the Ministry ofInvestment and Foreign Economic Relations.The current economic reforms are of great helpfor the future economic development of thecountry. So, the country’s economy will surelyimprove, said U Thaung Tun.Myanmar’s rank moved up from 171st to 165th onthe Doing Business Report 2019 released by theWorld Bank due to the economic reforms.“We welcome the government’s reforms forprivate sector development. Foreign investmentsare needed for the emerging market of Myanmar.The current reforms will contribute a lot to future

development,” said Thomas Neisinger, theGerman ambassador to Myanmar. – Translated

Source: Myanmar Timeshttps://www.mmtimes.com/news/land-bank-go-online.html


28 Nov 2019


Nay Pyi Taw real estate market seeing growth

As more and more people are moving toMyanmar’s capital Nay Pyi Taw, demand in thereal estate market has been growing year by year,says Zayar Real Estate Agency’s managingdirector U Nanda Kyaw.“As new companies and offices move, there aremore and more people who want to buy propertyto set up businesses or live in. The city isbecoming more crowded than before. There aresome people who buy land in advance becausethey are afraid of not having chance later on, eventhough they don’t plan to live there at thepresent,” U Nanda Kyaw said.He says people approaching his company arebuying for residential use and others for businesspurposes. Those buying for business purposes arelooking for sites located along main roads whilethose seeking residential property are looking atlocations with existing communities and goodtransportation links.“Townships in the inner city like Tha Pya Koneand Shwe Kyar Pin are seeing the highestdemand, followed by Ottarathiri and Pobbathiri,”said U Nanda Kyaw.

After a reduction in the taxes for property, thenumber of property transactions have increased.Sales of one-storey houses costing between K30and 50million have been brisk.Before the reduction, people were reluctant to paythe taxes on property purchases in expensivelocations, but lately they are willing to pay andmore interested in buying lands in expensivelocations.Even old wooden houses in somewhat populatedareas with a good locations are transacting withprices ranging from K10 million to K20 million,said U Nanda Kyaw.“Properties with good location and medium pricerange are being purchased more. The pricedoesn’t increase but in on a normal trend,” hesaid.Some people are purchasing the plots in townareas with prices starting from K40 million, sayNay Pyi Taw real estate insiders.

Source: Myanmar Timeshttps://www.mmtimes.com/news/nay-pyi-taw-real-estate-market-seeing-growth.html


29 Nov 2019

PwC | November 2019

2. Weekly Key Policy News

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PwC | November 2019

Myanmar Workers to Push for Higher Minimum Wage

Weekly Key Policy NewsHeadlines

Speculative Yangon city mega-project draws ‘white elephant’ concerns for Myanmar

Time to deliver

Parliament approves merger of industry, finance ministries

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Electricity rate hike is good for economy


Speculative Yangon city mega-project draws ‘white elephant’ concerns for Myanmar

YANGON: On the western bank of the muddyHlaing River, development and prosperity is adistant view. It can be seen across the expanse ofwater in the rising apartment blocks, officebuildings and grinding industry.Over there is Yangon proper, a city of some sixmillion people and the economic hub ofMyanmar. Over here is a simpler life of smallvillages, struggling rice fields and roads as bumpyas local prospects.But both the landscape and the outlook of thepopulation on the western bank are set fordramatic change in the coming years. A megaproject is planned on this land, a new metropolisto be powered by Chinese money.The New Yangon City project is an ambitious andcontroversial idea in its early conception days.The grand vision of Yangon’s regionalgovernment, which created the New Yangon CityDevelopment Company (NYDC) in March lastyear to partner with a Chinese state investmentfirm, is to build a brand new smart and “liveable”city with a population of 1.2 million people by2050.

Faced with worsening congestion, urban sprawland unreliable electricity and water supply, it isthe government’s plan to ease looming urbantroubles in Yangon, while spreading economicdevelopment to a long neglected region.It would also be a futuristic projection ofMyanmar ambition with designated green spaces,world class technology, an innovation hub,cultural corridor and hundreds of thousands ofnew houses. The project also promises to generatenearly one million new jobs. The first phase isbudgeted to cost about US$1.5 billion.Despite the lofty targets though, the projectappears years from taking shape with fierceopposition among lawmakers and experts. Thecriticisms range from the lack of detail, toprocedure problems, foreign influences,environmental concerns and the very nature ofthe project itself.

Source: Channel News Asiahttps://www.channelnewsasia.com/news/asia/yangon-city-mega-project-myanmar-china-state-investment-12051770

NewspapersChannel News Asia

23 Nov 2019


Time to deliver

The Myanmar government knows it needs toimprove the country's economic performance andextend the benefits of development more evenlyacross society. With elections only a year away,the ruling National League for Democracy (NLD)needs some big wins to prove to the country'sentrepreneurs and the urban middle class that itis pro-business.In recent weeks the government has announcedplans to push ahead with financial sector reform,with increased moves to liberalise the bankingindustry, ease restrictions on money transfers,launch much-awaited government bond auctionsand privatise loss-making state-owned factories."The NLD is running out of time, and in themeantime the economy is continuing to stagnate,"said Kyaw Kyaw Hlaing, a political commentatorand CEO of the conglomerate SmartTechnologies."So far their economic record in government hasbeen disastrous: there's no plan, no vision, and nostrategy," he told Asia Focus.The government has faced a Herculean task sincecoming to power in April 2016. On the one hand,

the NLD was committed to economicliberalisation, creating jobs and increasing thecountry's attractiveness to foreign investors, whilealso maintaining prudent economic policy, bothfiscal and budgetary.At the same time, it faced enormous resistancefrom the country's old guard -- the topbureaucrats, the cronies of the former militaryjunta and those who had benefited from thetraditional opaque way of doing business. Thesegroups remain entrenched and have quietlyopposed the government's efforts to bring aboutchange. Policies that stress greater accountabilityand transparency are clearly aimed at reducingthe influence of the old oligarchs."International investors have been waiting a longtime for the promised economic reforms,especially in the financial sector," said WilliamMaung, a local expert on the banking andinsurance sector.

Source: Bangkok Posthttps://www.bangkokpost.com/business/1801414/time-to-deliver

NewspapersBangkok Post

25 Nov 2019


Parliament approves merger of industry, finance ministries

The Pyidaungsu Hluttaw (Assembly of the Union)on Tuesday approved a proposal by President UWin Myint to merge the industry and financeministries despite the concerns of somelegislators.The merger was approved by a vote of 349 to 222.U Soe Win, who heads both ministries, welcomedthe decision by the assembly, saying it wouldfurther boost efficiency in managing state-ownedfactories.He said a single ministry can better manage theworkshops and factories under the Ministry ofIndustry to aid economic growth and create jobs.“Such a merger doesn’t mean abolishing oneministry. It means a merger of two ministries tospeed up the work for the goals of the country,”he said.During discussions on the issue last week, MP USoe Thein, a former industry minister, said thetwo ministries have different functions, so amerger may not result in more efficientmanagement.However, U Soe Win said a merger would help inthe privatisation of some state-owned enterprises.

“Most of the 112 state-owned factories are losingmoney, so it is difficult for these factories toimprove production and technology,” he said.“Only the systematic transition of factories to theprivate sector can implement the process ofindustrial development,” he added.The minister said consultations will be held withthe different ministries to determine where theycould best fit in under the new scheme.“Members of the staff will be able to choose thedepartment best suited to their expertise andexperience,” said U Soe Win.The Ministry of Industry has more than 23,000employees. They could ask to be transferred to thenew ministry or to other ministries.Those who choose to resign from public servicewould be given compensation based on thenumber of years they worked.

Source: Myanmar Timeshttps://www.mmtimes.com/news/parliament-approves-merger-industry-finance-ministries.html


27 Nov 2019


Electricity rate hike is good for economy

Businesses and the general public in Myanmar aredivided on the recent bold policy move to hikeelectricity tariffs. But the big question is: how canthe electricity reform contribute to the country’sdevelopment?On one hand, the business community seems tobe accepting of higher tariff rates as that couldlead to a more stable power supply with lesspower outages. This in turn could bring downmaintenance and other production costs withlower use of other costly sources of energy such asdiesel-powered generators during power outages.On the other hand, many households may find thetariff increases too steep given the country’s lowper capita income. The higher power tariffs meanthat consumers will not only have to pay more fortheir personal electricity consumption at home,but also for other goods and services that requireelectricity.Since Myanmar embarked on economic reformand opening its market in 2012, it has witnessedrapid economic growth averaging almost 7percent in the past seven years along with a sharpincrease in electricity consumption. According to

AMRO’s 2019 Annual Consultation Report onMyanmar, electricity use in the country increasedby an average of 15pc annually from 2012 to 2018.Until the recent tariff increase, households inMyanmar enjoyed the lowest electricity tariffs inthe region – around US$.02-.03 per kilowatthour, compared to $.06-$.12 per kilowatt-hour inother low-income countries in the region – whichresulted in high electricity consumption byhouseholds. The low rates also contributed tounder-investment in energy infrastructure, as thegovernment has limited funds while the privatesector has little incentive to invest in risky andlow-yield projects. Demand outgrew the limitedelectrical supply in Myanmar, giving rise tofrequent power outages and hamperingmanufacturing. Poor energy infrastructure andthe lack of a stable power supply are cited asreasons holding back foreign and domesticinvestment in Myanmar.

Source: Myanmar Timeshttps://www.mmtimes.com/news/electricity-rate-hike-good-economy.html


29 Nov 2019


Myanmar Workers to Push for Higher Minimum Wage

YANGON—The Confederation of Trade Unions inMyanmar (CTUM) is bringing a proposal to raisethe minimum wage from 4,800 kyats (US$3.19)to 7,200 kyats per day to the National Committeefor the Minimum Wage.The CTUM recently conducted surveys in Yangon,Bago, Mandalay, Sagaing and Magwe regions andShan, Kachin and Karen states, calculating theaverage costs families have to spend on food,housing, healthcare and education. The surveycovered people working in manufacturing,construction, mining, logging, agriculture andcargo loading at ports.The proposed rate, equal to 900 kyats per hourfor an eight-hour work day, is based on thesesurveys, according CTUM central committeemember U Win Zaw.The CTUM will also negotiate with other laborrights organizations to adjust the new rate, hesaid.“We will discuss it with others to reach aconsensus. We will demand 7,200 kyats per day.Compared with big economies, this is still not agood wage but it is a fair wage,” said U Win Zaw.

“A pyi of rice [2.56 liters] costs at minimum 1,600kyats. Meat costs 2,000 kyats without buying anyoil or onion. This is already 3,500, or 4,000 kyatsincluding pocket money for children. Expensesare a minimum of 7,000 kyats a day. Rent on ahouse is 50,000 kyats [per month] and theelectricity bill is 5,000 kyats,” said Ma Nan KhinHmwe, who works at a garment factory.Labor organizations are set to meet on Nov. 30 todiscuss the framework for another survey on theminimum wage, according to Ko Thet Hnin Aung,general secretary of the Myanmar Infrastructure,Craft and Service (MICS) labor organization.“We will determine the content of the survey withthe common consensus,” said Ko Thet Hnin Aung.But U Win Zaw said it’s unlikely the new rate willbe set at 7,200 kyats per day.

Source: The Irrawaddyhttps://www.irrawaddy.com/news/burma/myanmar-workers-push-higher-minimum-wage.html

NewspapersThe Irrawaddy

29 Nov 2019

PwC | November 2019

3. Weekly Investment News

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PwC | November 2019

Weekly Key Investment NewsHeadlines

Myanmar startup incubator Phandeeyar in talks to raise external capital

Shan State seeking more investors for agricultural sector

AirAsia Group Seeks Partners in Cambodia, China, Myanmar

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Myanmar tycoon open to foreign investment in wake of Ayala-Yoma deal

Myanmar logistics startup Kone Si nabs 6-digit sum from YCP, Nest Tech


Myanmar startup incubator Phandeeyar in talks to raise external capital

Myanmar-based startup incubator PhandeeyarAccelerator, that has so far been makinginvestments from its own balance sheet, is for thefirst time in talks to raise external money for itspermanent capital vehicle to clock investments inearly-stage tech ventures, its CEO Jes KaliebePetersen told DealStreetAsia in a chat.Phandeeyar, which means “Creative place”, has sofar funded 17 local startups since its inception in2015. Going forward, it expects to raise as muchas $1-2 million from limited partners (LPs) toinvest over the next few years.“We invest at an early stage, and ticket sizes aregenerally smaller here than they are in othercountries in the region. So, we don’t need, forexample, $10 million before we can start makinginvestments,” explained Petersen. “That gives us alot of flexibility to do the investments. But at thesame time, we also have a mission to expand theecosystem and engage more investors to committo the startups that we support,” he added.Even as it is a permanent capital vehicle, it’s openfor limited partners to participate. For theuninitiated, a permanent capital vehicle or PCV,

as its commonly called, is an investment entitycreated for managing permanent capital, whereinthe time frame is not specified.Phandeeyar’s portfolio includes early-stage techcompanies such as RecyGlo, a recycling solutionsprovider that operates in Myanmar and Malaysia,freelancer platform Chate Sat and logistics startupKone Si, which have raised capital from otherinvestors after the accelerator put in money.In total, over half of Phandeeyar’s portfolio firmshave raised follow-on funding.Even as the firm has not made any exits sincethese are just the early years of investment,Petersen revealed that the book IRR has beenmore than 22 per cent.“We’re pretty happy with that,” he said.A local chapter of the Founder Institute franchisethat’s the world’s premier idea-stage accelerator,Phandeeyar invests in Myanmar startups as aventure capitalist with a special focus to createsocial impact…Source: Deal Street Asiahttps://www.dealstreetasia.com/stories/phandeeyar-fundraising-163901/

NewspapersDeal Street Asia

26 Nov 2019


Shan State seeking more investors for agricultural sector

Myanmar Investment Commission (MIC) Chair UThaung Tun is urging get more local and foreigninvestments be made in the agricultural sector ofShan State.U Thaung Tun said this at the Shan StateInvestment Fair in Taunggyi, Shan State onNovember 26. During the event MIC and theShan State government invited foreign investorsto consider the state’s agricultural sector ratherthan other sectors.“I want to invite investors mainly for Shan State’sagricultural sector. Shan is a state that has goodpotential for agricultural businesses. We hope tocreate more sustainable agricultural businesses inthe state. Our country is also seeking equaldevelopment of agricultural, livestock andindustrial sectors,” said U Thaung Tun.Among the state’s goals is to become an importantregion providing agricultural goods for local andforeign markets. At present, the state alreadyproduces coffee, pickled tea leaves, maize, butter,and vegetables.Agricultural products from Shan State arecurrently being sold in the local market and also

exported. Coffee from the state is being exportedto the Americas, Europe and, Asia. Its other cropsare being exported mainly to China.State officials say the state’s land and weather aresuitable for agricultural businesses while itsstrategic location near Thailand and China offersadvantages in distribution of goods.Shan State Chief Minister U Lin Htut believesagriculture is brimming with potential for thestate.“We alreadyhave moderate infrastructure likeroads, water and power for investors and we planto improve such infrastructure even more in thefuture,” U Lin Htut said.The main challenge for the sector is the lack ofmodern agricultural technologies as most farmersare still using traditional methods. The chiefminister said, capital investments would help tochange this and improve productivity.

Source: Myanmar Timeshttps://www.mmtimes.com/news/shan-state-seeking-more-investors-agricultural-sector.html


27 Nov 2019


AirAsia Group Seeks Partners in Cambodia, China, Myanmar

After a brief halt, AirAsia Group has resumed itsovertures to partners in Cambodia, China, andMyanmar as it seeks to found new franchise unitsin these countries. However, it has abandonedplans to launch a unit in Viet Nam, Group ChiefExecutive Officer Tony Fernandes told Nikkei inan interview.Fernandes added that the airline was prioritisingthe lookout for a partner in Cambodia.Technically, Cambodia does not have foreignownership limits on airlines and AirAsia Groupcould establish a unit in this country without alocal partner.Plans for a Chinese unit were more of a long-termidea, but Fernandes underlined that AirAsianeeded to “stay relevant” in the country.The low-cost group pulled the plug on newforeign ventures earlier this year, at that timesaying that it would halt the establishment of newunits for three years. In early 2018, it wasreported to be in talks with now-defunct FMI Air(ND, Yangon) regarding the establishment of aMyanmarese unit. Plans to launch AirAsiaCambodia (Phnom Penh) were first reported by

the local media in 2017 but never materialised. Inturn, AirAsia China (Zhengzhou) was dropped inlate 2018 after there was no progress in talks withthe China Everbright Group and HenanGovernment Working Group, with whom AirAsiasigned a Memorandum of Understanding in 2017.Fernandes underlined that the airline did notchange its mind on AirAsia Vietnam (Da Nang),which was dropped in April 2019.“I don’t have any plans in Vietnam for now aftertrying three times. We cannot find the rightpartner and now I think there are too manyairlines there. Our time will come,” Fernandessaid.The stillborn Vietnamese unit was to be createdtogether with Gumin Company Limited and HaiAu Aviation Joint Stock Company.AirAsia Group currently has units in Malaysia,Thailand, Indonesia, the Philippines, India, andJapan.Source: Consult Myanmarhttps://consult-myanmar.com/2019/11/28/airasia-group-seeks-partners-in-cambodia-china-myanmar/

NewspapersConsult Myanmar

28 Nov 2019


Myanmar tycoon open to foreign investment in wake of Ayala-Yoma deal

Myanmar tycoon Win Aung is open to foreigninvestment in the listed industrial-estate providerhe oversees, following Ayala Corp.’s tie up with afirm traded on the nation’s fledgling stockexchange.In an interview in Yangon, Win Aung said a stakesale is an option as he plans to expand MyanmarThilawa SEZ Holdings Pcl, which operates amanufacturing zone where 109 firms have openedfactories or plan to do so.“We’ll need more capital and technology,” WinAung, the firm’s chairman, said Thursday.“Detailed plans will be revealed later after theauthorities officially allow foreigner participationon the Yangon Stock Exchange.”Myanmar is trying to expand a stunted boursethat currently has just five stocks by allowingoverseas purchases of domestic equities from2020. The Philippines’ oldest conglomerate Ayalais investing in one of those five — First MyanmarInvestment Pcl — via an $82.5 million convertibleloan that will become a 20% shareholding whenrules permit.The four-year-old Thilawa special economic zone

is viewed by some as the largest in Myanmar.Japanese, Thai and Malaysian firms account forthe bulk of the factories located there, accordingto Win Aung.Trade WarMyanmar’s business community hopes to benefitfrom the U.S.-China trade war by luringmanufacturers fleeing tariffs. Win Aung said thetension had yet to impact Thilawa significantly.“But Myanmar is in a good position to benefitfrom the trade war,” he said. “It’s really importantthat the government sets the right policies on howto attract potential investors.”Win Aung is also the founder and chairman ofconglomerate Dagon Group. He was on the U.S.government’s list of “specially designatednationals” until 2015, under a sanctions programthat targeted individuals and entities when thecountry was run by a military junta.

Source: Deal Street Asiahttps://www.dealstreetasia.com/stories/myanmar-tycoon-foreign-investment-164734/


29 Nov 2019


Myanmar logistics startup Kone Si nabs 6-digit sum from YCP, Nest Tech

Myanmar-based on-demand trucking platformKone Si has raised a six-digit US dollar fundingfrom Yangon Capital Partners (YCP) andVietnam-based early stage VC Nest Tech to fuelnational expansion.Prior to this investment, Kone Si received a pre-seed funding from local accelerator Phandeeyar in2017.The startup said it has connected more than 100business shippers and 2,000 truckers to itsplatform, and has enjoyed an average month overmonth sales growth of 30 per cent.Proceeds from the latest financing will be used toboost utilisation of its technology platform, talentacquisition and expansion to other commercialcities in Myanmar.Local businesses are facing the challenges ofoutsourcing transportation to third partiesbecause of lack of standardised procedures andopaque pricing among truckers, according toKone Si.Difficulties for small fleet owners and individualtruckers to get regular jobs also persists due tofluctuating transport pricing controlled by large

trucking groups.“We believe that understanding the powerparadigm between customers and truck suppliersis the key to success in the business. Knowing thefreight flow throughout the year in the country iscritical to help our partner truckers get the returnloads and operating efficiencies,” said Kone SiCEO Zar Phyu Tint Lwin.The frontier market of Myanmar is witnessing ahigh GDP growth of 6-7 per cent per annum,resulting in rising demand for logistics. Kone Si isnot the only player in the freight marketplace.Local rival Kargo Myanmar has also bagged$800,000 seed funding from Cocoon Capital inMay 2019.Nest Tech, which is based in Ho Chi Minh Cityand invests in Southeast Asian startups, hasbacked several businesses in Myanmar includingFlexible Pass, Mote Poh and Yangon Broom.Meanwhile, YCP plans to invest in up to 30Burmese startups within the next couple of years.Source: Deal Street Asiahttps://www.dealstreetasia.com/stories/kone-si-ycp-nest-tech-164274/


29 Nov 2019

PwC | November 2019

3. Weekly New Tenders

30

PwC | November 2019

No applicable Tenders announced for the week ending 30 Nov 2019.

Tenders (Myanmar)List

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

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http://www.mmtimes.com/

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

http://consult-myanmar.com/

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

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

PwC | November 2019

Tenders (Multilateral organizations) List

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

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WB: The 2020 Myanmar World Bank Group Enterprise Survey (ES) and Survey of Informal Businesses, Closing date: 12 Dec 2019

WB: Advisory services for structuring the Yangon Water Distribution PPP Project and assisting YCDC in identifying a suitable private sector developer/operator through a transparent competitive bidding process, Closing date: 05 Dec 2019

https://wbgeconsult2.worldbank.org/

http://www.devex.com/

http://www.adb.org/

https://www.ungm.org/

PwC | November 2019

4. MIC Permitted Projects

33

PwC | November 2019

MIC Permitted Projects (Meeting 18, 2019)

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No. Name of Company Type of Investment Form of Investment

1 Myanmar C.P. Livestock Co., Ltd. Layer farm Wholly Foreign-owned

2 Myanmar C.P. Livestock Co., Ltd. Pig farm and sales of pig Wholly Foreign-owned

3 Range Veterinary Co., Ltd.Manufacturing and marketing of various kinds of veterinary drug andpharmaceutical for animals

Wholly Foreign-owned

4 Than Daung Oo Co., Ltd.Production and sales ofsugar

Wholly Myanmar-owned

5 Myanmar Wan Li Garment Ltd.Manufacturing of various kinds of knitted wear on CMP basis

Wholly Foreign-owned

6 Green Urban Ventures Co., Ltd. Real estate development Joint Venture

7 Shwe Gabar Hlwan Co., Ltd. Crushing and sales of crushed stone Joint Venture

Source: DICA

PwC | November 2019

5. Upcoming Events

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PwC | November 2019

Upcoming Events (December 2019) List

Date Location Name of Event Sector Price Focus Points

02-03 Dec Yangon

Asia IoT Business Platform (AIBP Myanmar)

IT andTechnology

1,200 USD

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

05-07 Dec Yangon Agrilivestock MyanmarAgriculture and Forestry

TBC

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

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

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

https://10times.com/myanmar

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

www.pwc.com/mm

PwC Myanmar Weekly Business Intelligence Publication

For further information please contact:

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

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

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pwc myanmar weekly business intelligence · 2019-12-02 · pwc | november 2019 weekly key financial...

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