Spring 2012

INSIDE VIEW: Eyes on Myanmar

MonksFollowing a recent visit to the country, Xin Jiang, from Matthews International Capital Management, details some of the reform processes underway and looks at potential investment opportunities. Myanmar's parliamentary by-elections are scheduled for April and will be the first election involving the National League for Democracy, led by political campaigner Aung San Suu Kyi, since 1990. What may be just as important as the election outcome for the Nobel Peace Prize winner is the level of transparency in this election process so far. The government’s new spirit of openness and co-operation is encouraging and Matthews International Capital Management will continue to monitor the impact of these changes. Since the United States declared the Asia Pacific region to be a new priority, its strategic moves in southeast Asia have included a visit to Myanmar in December last year by Hillary Clinton, the US secretary of state. The visit was generally seen as an endorsement of the reform processes that Myanmar has slowly begun to roll out over the past year. On a recent trip there, I was able to take a first-hand look at some of these developments. Myanmar’s verdant and tropical capital city of Yangon struck me as having a calm and pleasing atmosphere. The air held a bit of a haze as many residents use wood-burning fires for cooking because there is a lack of sufficient electricity or gas. There is also a dated quality to the city that one might expect from a country long isolated – both diplomatically and economically – from the west because of the actions of its former military junta. The vehicles on Yangon’s bumpy roads are at least several decades old and mostly imported. Infrastructure is sorely lacking. Rolling power blackouts occur at least two or three times a day, affecting many people. However, some businesses, such as the hotel I stayed in, maintain their own diesel generators. As Myanmar’s hotel rooms are still limited, rates have doubled over the past few months and are still on the rise, along with tourism. The country boasts numerous beautiful temples and stunning beaches. There is also much buzz over prospects for the entrance of international hotel chains, new serviced apartments and condominiums. Already, land prices in Yangon have shot up. Yangon’s property market is expected to stay strong as plans for infrastructure development promise to boost real estate. Foreigners are not legally able to buy land so the surge in interest from business people and investors from Vietnam, Thailand, China, Singapore and Malaysia should also stimulate Yangon’s rental market. Judging from Myanmar’s modern – yet still under-utilised – airport, the country seems ready for the influx of attention from abroad. What struck me most during my visit was the general makeup of the people. From the hotel and restaurant staff to local business people, they had a warm and easy manner. The population is predominantly Buddhist. It is skilled and well educated. Myanmar has a literacy rate of about 92%, higher than other frontier markets such as Laos or Cambodia. In several separate conversations, residents pointed to an increasing number of Burmese who are currently living abroad are considering repatriating to Myanmar as more opportunities arise. Despite the foreign interest, however, the country still faces many challenges. First and foremost, it needs to demonstrate political and financial stability. Myanmar has no local stock exchange. Its complex and confusing foreign-exchange regime also requires a major overhaul. Fortunately, the International Monetary Fund is already reviewing ways to help unify the country’s foreign exchange system and lift restrictions on international transactions. Many in the region see Myanmar as a potentially attractive investment alternative to Thailand. Myanmar’s reforms should also benefit the region. Thailand, for example, already supplies a significant portion of Myanmar’s cement needs. We expect this demand to grow as infrastructure develops. Myanmar has abundant reserves of oil and gas. Many global resource companies already have a presence in the country, which is also a big exporter of gems such as jade, rubies and sapphires. Xin Jiang is a research analyst at Matthews International Capital Management ©2012 funds global

Sponsored Profiles

Sponsored feature: How is DLT changing the global securities services landscape?

Oct 17, 2019

By Jeslyn Tan, global head of product management, securities services, at Deutsche Bank

Sponsored feature: A new base for fund distribution

Oct 16, 2019

To get the most value out of the digitisation of investment fund distribution, a blockchain-based infrastructure is fundamental. By Olivier Portenseigne, Managing Director and Chief Commercial Officer, Fundsquare.

Sponsored profile: Bridging the gap

Mar 11, 2019

Private equity is a core part of the business for Caceis’ Hong Kong office, which looks after clients in China and Europe. David Li, chief executive officer, explains why private equity enjoys strong client demand and how it is being used to fund China’s international infrastructure ambitions.

SPONSORED FEATURE: Market knowledge key to fund distribution in Asia

Jan 11, 2019

The highly fragmented investment markets in the Asia-Pacific region require detailed knowledge of each market’s unique characteristics and framework. By Lou Kiesch, Partner, and Marc Noirhomme, Director, at Deloitte Luxembourg.

Executive Interviews

Executive interview: Timing the market

Oct 17, 2019

Amy Cho, Schroders’ Hong Kong chief executive and regional head of intermediary clients, tells Romil Patel about Hongkongers’ love of investing, staying nimble in a volatile market and following...

Interview: Asia’s sweet spots

Jul 05, 2019

As the US-China trade war ramps up with a hike in levies, Tai Hui, chief market strategist for Asia-Pacific at JP Morgan Asset Management, tells Romil Patel where he identifies investment value.

Roundtables

Roundtable: Priming for Asia’s growth

Oct 17, 2019

Panellists discuss expanding product capability across Asia-Pacific, the opportunities and regulatory challenges around data and the prospects for ETFs in the region. Chaired by Romil Patel in Hong Kong.

ESG roundtable: Are the ESG stars aligning across Asia?

Jul 05, 2019

Our panel of experts discusses driving higher ESG asset allocation in Asia, growing calls to address the global climate crisis and the importance of governance. Chaired by Romil Patel in Hong Kong.