YANGON -- Initial fanfare has given way to a sleepy quiet on Myanmar's Yangon Stock Exchange, which has just four listed names after a year and half of trading, as a lack of seasoned investors dissuades potential listings.
The YSX Expo, held at a hotel here in the country's most populous city this weekend, drew more than 1,000 people interested in learning about the role of stock markets and the advantages of investing. Nearly all of those attending had zero trading experience, with some asking speakers such questions as what stocks to buy. Even so, lengthy lines formed to open brokerage accounts at booths set up by six major securities companies.
Although interest in investing is growing, such eagerness has not translated into momentum for Yangon's fledgling exchange. Trading on the YSX, which began in March 2016, three months after the exchange opened, has stagnated following a brisk start. The Myanpix stock index has sunk to half of its peak value.
"I have to say that things could be better," Japan Exchange Group CEO Akira Kiyota, whose company is an investor in the YSX, acknowledged Sunday, referring to the bourse's dearth of listed names and brokerages.
Meager investor ranks are a major factor in the sluggishness. There are just 30,000 brokerage accounts open in Myanmar. Many initially enthusiastic retail investors soon withdrew from the market when they saw share prices sink. Thin trading has kept stock prices depressed, so companies see little appeal in listing.
Myanmar's government responded in mid-August by announcing tax relief for YSX-listed companies that will cut their rate to 20% from the standard 25%. The government also said corporations looking to list will be subject to a tax payment review stretching back only two years. The YSX could receive a boost from foreign money as well, should the national assembly pass legislation allowing such investment.
One or two more companies are expected to list this year after evaluating factors including the government's stance. Further reforms are anticipated, thanks to shared recognition among the exchange's operators, the government and businesses that the bourse is vital to Myanmar's economic growth.