Rays of hope in Myanmar
Myanmar is a country in the midst of political and economic transition. The current administration is lacking experience, the Rohingya people are suffering arguably the world’s fastest growing refugee crisis and western economies haven’t flown in much capital. That doesn’t provide many opportunities to explore growth.
However, there is a ray of hope. The exchange only launched two years ago and while liquidity is still thin, the economy is continuing to expand. The current administration has made amendments to the foreign investment law, meaning that foreigners can invest up to 35% directly into Myanmar companies starting from August 2018. The rationale behind this is to inject some much needed liquidity and volatility to the market – currently, most players in the stock market are ‘buy to hold’ retail investors.
On the private equity side, there are some more fundamental problems, especially with infrastructure. Huge investment is needed in the power sector to improve access to electricity for every household. The current administration has announced that they expect 90% of houses to have access to electricity by 2030, but this needs significant investment.