“The next step after [signing the memorandum] will be enacting the Securities Law, its by-laws and other rules and regulations, and then organising the necessary institutions. After that, we will first try to create a culture for the capital market and then for the stock exchange establishment,” he added.
He said the government was behind schedule because of economic sanctions and the multiple exchange rate regime, which it has only recently started to address.
“Mainly, it was because of sanctions. And then the exchange rate difference. If exchange rate unification hadn’t been carried out, we couldn’t have gone down this path. Now … the route has been opened,” he said.
The Central Bank governor agreed that there were still many tasks to be completed.
“We will have to do these things simultaneously rather than one by one. After creating the laws and Securities Exchange Commission, there are still many things left to be done, including formation of public companies and securities companies,” U Than Nyein said.
For the Central Bank’s new partners, TSE and Daiwa, the timeframe also appears tight.
“The plan to establish an exchange by 2015 is tight, I think. It is rather difficult for Myanmar side and more difficult for Japan side as well,” Mr Takashi Fukai, president and representative director of Daiwa, told The Myanmar Times.
“We have discussed the system that we will work according to. Many necessary institutions are still left to be developed. And we need to ensure that investors are familiar with the environment of capital markets,” he said.
Officials from the companies stressed that there had been “no serious negotiations” on establishing the two exchanges.
“We are working together. There is no negotiation, I mean Daiwa and TSE are directed to get together to support Myanmar. There is no serious negotiation [but] we [would] like to work together,” said Mr Shunzo Kayanuma, the director and global communicator of TSE.
On the future role of MSEC, he said: “We hope to establish a single exchange. We don’t know the relationship between the new stock exchange and MSEC. We need to find out the best solution how to deal with this. At this no moment, there is no clear picture.”
Mr Inami of MSEC said the speed and manner in which Myanmar progressed towards a stock exchange would be largely up to the government.
“We are not the securities company so we are not [able] to operate the stock exchange, so we invited TSE to support Myanmar together. [Setting up an exchange] is the next step. We will discuss it in the future but at the moment we have no idea. We need to discuss with the Myanmar side on what is the best way for the Myanmar’s future stock exchange,” he said.
TSE president Mr Atsushi Saito said public education was an important step that could not be neglected.
“Firstly we are articulating the legal framework and the training of the staff. Actually, the short term reward for Japan is not our target. I would like to devote ourselves to the development of the people of Myanmar. We are not targeting or aiming for any short-term return on this participation,” Mr Saito told The Myanmar Times recently.
Mr Kayanuma agreed it was important that corners were not cut in an effort to expedite the process.
“The people in Myanmar are expecting to establish a stock exchange by 2015. So we are directed to provide an effort to support for it. At this moment, we are not sure [whether it is possible]. But we are hoping the process can actually be done properly … maybe we can reach our goal in 2015,” he said.