PwC MyanmarWeekly Business Intelligence

Issue 11422 June 2018

www.pwc.com/mm

PwC | June 2018

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PwC | June 2018

1. Weekly Key Financial & Business News

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PwC | June 2018

Weekly Key Financial & Business NewsHeadlines

A new deal for oil and gas

Mottama’s Yangon ambition spans nine projects

Phase 3 of Yangon Int'l Airport improvement project nearing completion

Multi-Purpose Terminal to be Constructed in Kawkmhu Township

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Luxury Kantharyar Office Tower Development Opens June 20th for VIP Tour

PwC | June 2018

Weekly Key Financial & Business NewsHeadlines

Financial inclusion makes big inroads into Myanmar

Partnerships drive iflix’s growth in Myanmar

Better PR, infrastructure needed to woo more Korean investors

As demand rises, CarsDB seeks funds for further expansion in Myanmar

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Gas power plant in Mandalay to be ready by next February

PwC | June 2018 6

Mottama’s Yangon ambition spans nine projects

Mottama Holdings Limited, a Yangon-basedcompany owned by Myanmar-Chineseentrepreneur U Yang Ho, has nine major projectsin the pipeline, valued at US$1 billion andexpected to be all completed by 2022, accordingto the company’s announcement on June 15.Established in 1997, Mottama’s nine projectscover residential apartments, office towers,shopping malls and public recreational centres.There are four projects carried out withinternational partners: M Tower on Pyay Road,Min Residences on Mindhama Road, MottamaCentre and affordable housing project M GreenApartment in Yangon’s Mingaladon township.The remaining five projects are domesticpartnerships: an aquarium inside KandawgyiPark, Harbour Trade Tower on Strand Road, HLtower on Pyay Road, Bonnamy Tower on KyaikWine Pagoda Road and Mottama Business Toweron Mindhama Road.U Yang Ho, who now chairs Mottama, said thecompany focuses on the urban development indowntown Yangon.Six projects are currently under construction and

three projects - Mottama Business Tower,Bonnamy Tower and M Green Apartment - are setto begin construction next year.The most spectacular among the projects will bethe $2.5 billion Yangon railway station project,which is set to be Myanmar’s largest joint ventureinvestment project under the National League forDemocracy-led government and which will takeeight years to complete. In February, the CentralTransport Development Consortium (CTDC) hasbeen selected as the preferred bidder to redevelopthe 25.7 hectares (63.5 acre) prime site aroundYangon Central Railway Station in the city centreof Myanmar’s commercial capital. Mottama ispart of the consortium.Min Dhama, one of 23 subsidiary companies ofMottama, has a 40 percent share, whileSingapore-listed Oxley Holdings and Beijing-headquartered Sino Great Wall Company eachhave a 30pc share. The drafting of the investmentagreement started in April.Source: Myanmar Timeshttps://www.mmtimes.com/news/mottamas-yangon-ambition-spans-nine-projects.html

NewspapersMyanmar Times

18 June 2018

PwC | June 2018 7

A new deal for oil and gas

With an offshore oil and gas tender on thehorizon, the Ministry of Electricity and Energysays it is reviewing the fiscal terms in itsproduction sharing contracts to make the countrymore internationally competitive.THE GOVERNMENT is reviewing the structure ofits contracts with energy companies amidwarnings that the present fiscal terms aredeterring investment, particularly in riskier ormarginal projects.Myanmar’s high-taxing fiscal regime and lowglobal energy prices are clearly having an impacton the sector, with energy companies havingrelinquished almost half of the offshore blocksawarded in a 2014 bidding round.The “government take” – the proportion ofrevenues from oil and gas projects that goes to thegovernment – can be as high as 94 percent underpresent production sharing contracts, accordingto energy research and consultancy firm WoodMackenzie. Despite this, investors bear all therisk; the government invests nothing inexploration or development.Government officials say just eight exploration

wells are planned this year, reducing prospects fornew discoveries at a time when existing reservesare depleting and the country desperately needsnatural gas to generate power and fuel economicgrowth.U Zaw Aung, the director general of the Oil andGas Planning Department, said the review of thefiscal terms was underway.“We are looking at the terms and conditions, all ofthe fiscal terms, and how we will adjust them … tomake [the sector] more attractive,” he said. “Butwe cannot make a decision on that alone. Aftermeeting, we will submit it to the Ministry ofElectricity and Energy office for the minister’sapproval as well as [the approval of] concernedministries.”“Our PSC is very flexible,” he said. “If operatorsfind a new discovery and it is not economicallyviable [under the current terms] we will considerbecause we are always trying to get mutualbenefit.”Source: Frontier Myanmarhttps://frontiermyanmar.net/en/a-new-deal-for-oil-and-gas

NewspapersFrontier Myanmar

18 June 2018

PwC | June 2018 8

Phase 3 of Yangon Int'l Airport improvement project nearing completion

The runway and apron of Yangon InternationalAirport are being extended as part of phase 3 ofthe upgrading project, according to YangonAerodrome Company Ltd (YACL) in charge of theproject.The Yangon airport improvement project hasthree phases, and the work of phase 3 includingconnection between Terminal 1 and Terminal 2will finish soon."The project has phases 1, 2 and 3. Now, we are inphase 3. The work for connecting Terminal 1 andTerminal 2 is nearing completion. The runwayand apron are also being extended. MingalardonCargo Services (MCS) will be moved inside. And aVIP terminal will be built where MCS used to be,"said Ye Htut Aung, deputy director general of theDepartment of Civil Aviation.Phase 3 includes the linkage between Terminal 1and Terminal 2, the extension of the runway andapron, extension of the cargo building, theconstruction of a VIP/CIP terminal and upgradingof Terminal 2.An agreement was signed with YACL toimplement the project for 36 months. But the

company has reportedly informed the concernedministry about another 18 months to complete theproject.Yangon International Airport provided aviationservices for 5.45 million passengers in 2016 and5.92 million passengers in 2017.Yangon airport serves as a main entry toMyanmar, and plans are underway to buildanother Hanthawady International Airport as anational project.

Source: Eleven Myanmarhttp://www.elevenmyanmar.com/business/14157

NewspapersEleven Myanmar

18 June 2018

PwC | June 2018 9

Multi-Purpose Terminal to be Constructed in Kawkmhu Township

A multi-purpose terminal will be constructed atThayet Taw Village, Kawkmhu Township, Yangon,according to U Zaw Aye Maung, Region Ministerfor the Ethnic Affairs at Yangon RegionalParliament on June 5.“It will generate more income for the country bytransporting various goods including the goodsfrom China’s inland provinces through Yangon-Mandalay-Bamaw-Myitkyina road and Yangon-Mandalay-Lashio-Muse road. Moreover, as it willcreate job opportunities for local people,unemployed rates will be lower,” he said.“By shipping oil directly from the exportercountries will further adjust the local oil priceswith international prices and reduced cost inlogistic will keep the prices stable while theproject makes the nearby area develop,” theminister said.“Being a multi-purpose terminal, it will includevarious terminals for exporting rice, wheat, bean,and industrial products, importing raw materials,oil, and fuel for transportation,” he added.International experienced companies RoyalHaskoning and Subana Jurong has conducted

feasibility studies for building fuel storage facilityand multi-purpose terminal and the first phase ofthe project will be implemented on 500 acres ofland out of 1,053 acre on 2.2 kilometer long riverbank.Presently, Myanmar has nine terminals forshipping and in water trade and 95 percent of thesea route trade is managed in Yangon Terminal.Yangon Terminals including Thilawa Terminalhas the capacity to host 46 ships at once and 20trade shipping lines use Yangon Terminal tradingwith Singapore, Malaysia, India, China, SriLanker, Indonesia, Vietnam, Bangladesh andThailand.

Source: Myanmar Business Todayhttps://www.mmbiztoday.com/articles/multi-purpose-terminal-be-constructed-kawkmhu-township

NewspapersMyanmar Business Today

19 June 2018

PwC | June 2018 10

Luxury Kantharyar Office Tower Development Opens June 20th for VIP Tour

Asia Myanmar Shining Star Investment Co., Ltdtoday announced that its prestigious 5A classoffice tower development offering a total of196,000 sq. feet of space next to Kandawgyi Lake,Yangon, will open its doors for the first time forsneak peaks on June 20th to an exclusiveaudience of local and foreign jet-setters.The construction company which has almostfinished erecting the Kantharyar Centre complexincluding a high-end shopping mall, a suite ofserviced apartments and the upscale Wyndham 5-Star hotel, is currently adding the finishingtouches to its twin office tower developmentsituated next to picturesque Kandawgyi Lake,3.5km from downtown Yangon.The group hopes to create synergies between theOffice Tower, Wyndham Hotel, servicedapartments, and on-site shopping mall facilities.Commercial tenants such as CB Bank, KFC,JCGV, and Alibaba are believed to be among thefirst occupants of the complex. Offices havealready been snatched up by the likes of Global500 companies, Sinohydro and WellTransportation, together with industry leaders

including ICT Star and M9 Group. Asia Myanmarbelieves this is poised to hoist Yangon intocompetition with neighboring business mega-hubs such as Bangkok and Singapore, in terms ofconvenience and prestige.The open house launch event is to be held duringbusiness hours on June 20th, in partnership withlocal real estate agent Slade Property services.They will offer executive guided tours of theimposing glass structure and its offices, whichcommand enviable and unobstructed views of theclassically Burmese style Kandawgyi Lake andnearby iconic Shwedagon Pagoda, as well as otherlandmarks across the Yangon urbanscape.‘’This super premium space ideally suits bothMyanmar and international companies who wishto set their flagship office space right at thebeating heart of Myanmar’s economic capital’’said Mr. Yuan Cheng, Sales & Marketing Directorat Asia Myanmar Shining Star.Source: Myanmar Business Todayhttps://www.mmbiztoday.com/articles/luxury-kantharyar-office-tower-development-opens-june-20th-vip-tour

NewspapersMyanmar Business Today

19 June 2018

PwC | June 2018 11

Partnerships drive iflix’s growth in Myanmar

Given increasing mobile penetration and ahealthy appetite for amazing contents, iflix, aglobal streaming service provider with presencein 27 nations across Asia, the Middle East andAfrica, is experiencing strong growth in Myanmar,according to Adeana Greenlee, the firm’s head ofIndochina.Greenlee said in an interview that Myanmar hasdemonstrated huge potential since the firmlaunched the nation’s first international SVOD(subscription video on demand) service in March2017. “There has been a 100-percent increase insubscribers since the beginning of this year. Wehope all subscribers in Myanmar will behabitually using the service by the end of thisyear,” she said.As reported by Mediaweek in May 2018, iflixboasts over 12 million subscribers. With newmarkets and new features, the firm’s growthmetrics are anything but average, said Greenlee.“The growth we have seen to date is exceptional,and we expect similar and accelerated growthgoing forward in both our new and existingmarkets,” she said.

She added that partnerships with telecomoperators, retailers and other local counterpartswere “instrumental” in the firm’s growth.“We have been able to successfully collaboratewith local partners, content providers andregulators in Myanmar to build a service we wishto share with everyone. By improving paymentgateways and offering a vast library of freecontent, we want to ensure the people ofMyanmar gain access to world-classentertainment,” Greenlee said.The firm is now working closely with threetelecom operators – MPT, Telenor and Ooredoo –to deliver the most convenient payment solutionsfor subscribers, she said, while hinting atpotential future cooperation with MyTel, thenation’s fourth telco which recently entered themarket.

Source: Eleven Myanmarhttp://www.elevenmyanmar.com/business/14168

NewspapersEleven Myanmar

20 June 2018

PwC | June 2018 12

Financial inclusion makes big inroads into Myanmar

Myanmar has seen a significant increase in thenumbers of adults with access to at least oneformal financial services product, according toresearch presented on June 19 as part of thenationwide Making Access Possible (MAP)financial inclusion study.MAP operates through a partnership between theUK-funded DaNa Facility, United Nations CapitalDevelopment Fund (UNCDF) Myanmar, and theMinistry of Planning and Finance’s FinancialRegulatory Department (FRD). The financialdiagnostic provides a composite profile of theaccess to and use of financial services nationwide,based on a comprehensive survey of 5,500 ruraland urban households.The study found that adults with access to at leastone formal financial product increased from 30pcin 2013 to 48pc in 2018, an almost two thirdsincrease in financial inclusion, against a target setin 2014 of 40pc. This implies that over 6 millionmore adults have access to formal financialservices now than in 2013, while adults with morethan one formal financial product also increasedto 17pc.

Gail Marzetti, head of UK’s Department forInternational Development (DFID), which fundsDaNa Facility, said that this increase in access toformal financial services means that people acrossMyanmar are increasingly able to save, invest andprosper through their use of formal financeservices.“It also demonstrates that we still have a lot ofwork to do as we strive to increase access toformal financial services and ensure that peoplearound the country have the financial means andtools they need to improve the lives of theirfamilies and communities,” Dr Marzetticommented.Myanmar Financial Inclusion Roadmap (2014-2020) was drafted by the government aftercarrying out the first survey in 2013. Through theRoadmap, one of the targets was to increaseformal financial inclusion from 30pc to 40pc by2020 but according to this 2018 survey, it hasalready been well beyond that 2020 target.Source: Myanmar Timeshttps://www.mmtimes.com/news/financial-inclusion-makes-big-inroads-myanmar.html

NewspapersMyanmar Times

21 June 2018

PwC | June 2018 13

Better PR, infrastructure needed to woo more Korean investors

Myanmar must be more proactive andenthusiastic across its attempts to attract foreigninvestors, such as visiting with the countries itplans to attract investments from. It should alsobetter communicate developments that would beof interest to investors, such as recent directiveson liberalising the education and retail sectors,Lee Hyuk, Secretary General of the ASEAN-KoreaCentre, told The Myanmar Times during aninterview yesterday.“Local officials and businesses need to visit thecountries from which they are targeting foreigndirect investments (FDI), such as South Korea,and engage with potential investors there so thatpeople are aware of what Myanmar has to offer,”Mr Lee said during the sidelines of the Myanmar-Korea Investment Promotion Seminar.Myanmar can also do a better job communicatingdevelopments relevant to foreign investors. Theseinclude recent measures to open up the domesticeducation and retail sectors to foreigninvestments in April and May, respectively.More could have been done to promote the retailsector to overseas investors, for example. “South

Korea is globally competitive in the retailindustry. E-mart, for example, is planning to openin Vietnam and has plans to expand intoneighbouring countries including Myanmar,” MrLee said.South Korea’s education system is also globallyrenowned. “With the liberalisation of theeducation sector and IT development, I believemore lively exchanges in the sector between ourtwo countries will flourish,” he said.As such, Myanmar should take advantage of thatopportunity to promote the benefits of investingin the domestic education sector.Regional competitionMyanmar must also do more to promote itself asan investment destination as competition forSouth Korean investments is intensifying acrossSoutheast Asia.

Source: Myanmar Timeshttps://www.mmtimes.com/news/better-pr-infrastructure-needed-woo-more-korean-investors.html

NewspapersMyanmar Times

21 June 2018

PwC | June 2018 14

As demand rises, CarsDB seeks funds for further expansion in Myanmar

Ko Wai Phyo Kyaw, COO and co-founder ofCarsDB, is seeing business take-off on the back ofa recent change in the way consumers are buyingcars in Myanmar. Now, the digital automobileclassifieds site is ready to initiate new serviceofferings such as insurance and financing toexpand further.With the recent policy shift away from importingright-hand-drive vehicles, buyers have begunexploring car options in the left-hand-drivesegment of the market. “And thanks to theintroduction of competitive financing options, weare also seeing more brand new vehicles beingsold,” Ko Wai Phyo Kyaw told The MyanmarTimes.Those changes in demand also come at a timewhen the number of Internet users in Myanmarhas surged, backed by faster connections andcheaper access to SIM cards and mobile phones.The new environment is the perfect set-up forCarsDB, which is Myanmar’s first and largestdigital automobile classifieds site.“We have more than 300,000 unique users everymonth and more than 2,000 valued car dealer

partners across Myanmar,” said Ko Wai PhyoKyaw. The site claims also to have at least 7,000new cars being listed for sale on its platform everymonth, or around 84,000 a year.Now, CarsDB is on the lookout for investors tohelp it take its services to the next level. It hasalready begun providing automobile insurancepremiums on its site, which will soon includeoptions for buyers to better finance their vehiclepurchases. It has also diversified into advertisingand events management.‘‘We will be keen and happy to speak to investorswho share our long term vision. As a smallgrowing company with limited profitability, weare not able to borrow from the banks yet,” saidKo Wai Phyo Kyaw.In fact, “CarsDB does not set the selling price. It isthe users’ sole discretion to set the prices at whichthey want to sell their vehicles. We are just afacilitator of the car market,” he added.Source: Myanmar Timeshttps://www.mmtimes.com/news/demand-rises-carsdb-seeks-funds-further-expansion-myanmar.html

NewspapersMyanmar Times

22 June 2018

PwC | June 2018 15

Gas power plant in Mandalay to be ready by next February

The National Infrastructure Holding-ledconsortium (NIHC), comprising of three firms,will construct a 145MW gas power plant inKyaukse township, Mandalay Region, accordingto consortium.The tender was launched by the Ministry ofElectricity and Energy (MOEE) in March 2018and NIHC consortium was awarded the tenderlast month, Director Daw Yi Yi Htwe from MCMCo, a member of that consortium, told TheMyanmar Times. Within the consortium, NIHC, aYangon-headquartered infrastructureconglomerate, owns the largest number of theshares, followed Myanmar Chemical & Machineryand then a Chinese firm, one MCM official said.The 145MW gas power plant will involve US$100-120 million investment over a span of five years,the official added.Negotiations are still underway for the PowerPurchase Agreement with the MOEE and aproposal will then be submitted to the MyanmarInvestment Commission, he said. MOEE willsupply 30 million cubic feet of gas per day to theplant which consists of eight 18MW “Wartsila

machines” made in Finland for electricitygeneration, Daw Yi Yi Htwe said. Wärtsilä is aFinnish firm which manufactures and providespower sources and other equipment in the energysector.According to tender agreement with MOEE, theproject proponent has 10 months maximum forconstruction on the land allocated by theministry. Construction started in May and isscheduled to complete by February 2019.Once the construction is completed, the plant willstart operation in February in order to supplyelectricity during the summer, Daw Yi Yi Htwecontinued. The power generated will be added tothe national grid.In early May, the MOEE has selected the winnersof a tender for rental power projects in MandalayRegion.

Source: Myanmar Timeshttps://www.mmtimes.com/news/gas-power-plant-mandalay-be-ready-next-february.html

NewspapersMyanmar Times

22 June 2018

PwC | June 2018

2. Weekly Key Policy News

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PwC | June 2018

Weekly Key Policy NewsHeadlines

NYDC to hold talks on seeking reliable facts about much-criticized Yangon New City Project

No plans by YCDC to build car trading stations

Government removes 2pc of withholding tax on domestic payments

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Myanmar, China to sign MoU on economic corridor project

New MIC chair promises to stay investor-friendly, says Myanmar "open for business"

PwC | June 2018 18

NYDC to hold talks on seeking reliable facts about much-criticized Yangon New City Project

New Yangon Development Company (NYDC) hasplanned to hold a talk about NYDC Town Hallwith the intention of seeking strong evidences forYangon New City Project as ChinaCommunication Construction Company Limited(CCCC), a tender winning company, is facingmany questions as to whether or not there istransparency, said Thein Wai (a) Serge Pun, theCEO of the NYDC.“We hear the public opinions on the new townplan through social networks and media eversince the NYDC started setting up the NYDC.Most of the people are attracted to this project.Some people supported the project but some wereagainst it. Criticisms went to Yangon regionalgovernment and the NYDC.“So many questions arose—does the governmentneed to do business? Can’t a ministry or acommittee carry out this new town project? WillYangon new city project become money-wastingproject without seeking profits? Why doesn’t thegovernment do better for Yangon? Is theretransparency in tender option process? Is theretransparency in the authorized permission of the

Chinese company to set out to implement the firstphase of the new town plan, a challenge of theNYDC?” Thein Wai (a) Serge Pun, the CEO of theNYDC said.The most important thing in the implementationof a project or a destination is to have an effectivecommunication network linking with all thoseconcerning the project. If so, different opinionswill accumulate and we will get an acceptablesolution, Thein Wai (a) Serge Pun said.It will be sure to reach the destination if wenegotiate different views depending on mutualrespect. I believe that a better result would appearif an efficient policy was able to be laid downresulting from transparent discussions aboutdifferent opinions on the project beneficial to thepublic like Yangon new city project. For thatreason, the NYDC will hold the first talk of NYDCTown Hall on June 23 in order to presentdifferent views and suggestions for Yangon newcity project.

Source: Eleven Myanmarhttp://www.elevenmyanmar.com/business/14152

NewspapersEleven Myanmar

18 June 2018

PwC | June 2018 19

No plans by YCDC to build car trading stations

YCDC has not yet planned to set up new cardealer trading stations or warehouses, YangonMayor U Maung Maung Soe said at the regionallegislature on June 12.At present, most of the car dealers are selling andbuying the cars by storing the vehicles in differentplaces across the townships. This arrangement isnot good for residents or the traffic.Now, Hlaing dealer compound (in Hlaingtownship), Thirimingalar old market dealercompound (at Kyimyindaing township) and ThanThumar car dealers compound (at Thingun Kyuntownship) are the official car dealer stations butmost of car dealers are doing business at another22 unofficial compounds/ warehouses in othertownships in the city.“‘In Yangon Region, there were many car dealerswho are doing individual business since a longtime ago. At present, there are only three officialdealer compounds for conducting thosebusinesses. As a result, some of roads and streetsin different townships and quarters are full withthe cars,” said MP U Hla Htay from Thingun Kyuntownship. Residents complain a lot about the

parking of vehicles and at times fighting occursbecause both sides are competing for limitedparking spaces.MP U Hla Htay asked in parliament whether thegovernment plans to build new compounds forthe car dealers.“If the government allows individual dealers tostore their cars in big compound buildings, theywill be able to do business and it will not affect theresidents. The government will receive tax fromthe dealers for parking fees. “Individual cardealers are hoping to have a new car dealercompound,” the regional lawmaker commented.MP U Kyaw Kyaw Htun from Hlaing townshipadded that the parking of cars along the streetscompound the issue of traffic in the city. He saidwhenever the vehicles need to enter and leave thecompounds, they cause traffic issues. Newcompounds need to have good infrastructure, andan effective disposal and sanitary system, as wellas other facilities.Source: Myanmar Timeshttps://www.mmtimes.com/news/no-plans-ycdc-build-car-trading-stations.html

NewspapersMyanmar Times

19 June 2018

PwC | June 2018 20

Government removes 2pc of withholding tax on domestic payments

The Ministry of Planning and Finance yesterdayreleased its latest notification (47/2018) onwithholding tax, which replaces notification(51/2017) released May 22, 2017.Effective July 1, an existing 2 percent withholdingtax will removed on residents for paymentsinvolving cooperative business with thegovernment, partnerships, joint ventures,companies, registered associations ororganisations, cooperative societies, foreigncompanies, foreign enterprises involved in thepurchase of goods and for work performed orservices rendered within the country under acontract.Local small and medium enterprises andcompanies will also be exempt from paying the2pc withholding tax.Payments by state organisations and enterprisesfor the purchase of goods and supply of serviceswithin the country under a contract will still besubject to a 2pc withholding tax.Non-residents will continue to pay withholdingtaxes at 2.5pc.The decision, which follows a January move to

remove withholding taxes on exports, is an“excellent step by the government,” said U SoeTun, chair of the Myanmar AutomobileDevelopment Public Company.Meanwhile, residents will be exempt from payingwithholding taxes on interest on loans, while non-residents must pay 15pc.Residents must also pay a 10pc withholding taxon royalties for the use of licenses, trademarksand patents, while non-residents must pay 15pc.

Source: Myanmar Timeshttps://www.mmtimes.com/news/government-removes-2-pc-withholding-tax-domestic-payments.html

NewspapersMyanmar Times

20 June 2018

PwC | June 2018 21

Myanmar, China to sign MoU on economic corridor project

Myanmar is discussing with China to implementMyanmar-China economic corridor project,according to Myanmar Investment Commission.Aung Naing Oo, Director-General of Directorateof Investment and Company Administration said:“Myanmar and China will sign a contract on theconstruction of Myanmar-China economiccorridor. No exact date has been fixed for thecontract signing. But it will materialize in 2018.”Both sides plan to form working committee forthe implementation of Myanmar-China corridorproject. All sea exits will be included in the OBOR(Belt & Road) project as corridor.On May 14, both sides finalized the discussionabout the MoU of China-Myanmar economiccorridor.Myanmar will invite local and foreign investmentsto develop infrastructure, industrial zones, urbanprojects, agricultural zones, logistics, and bordertrade and tourism sector, according to the DICA.This economic corridor will be part of OBORproject.“Thanks to this economic corridor, there emergerailroads, motor roads and jetties. Not only China

but also local and foreign companies willimplement the project," he added.

Source: Eleven Myanmarhttp://www.elevenmyanmar.com/business/14199

NewspapersEleven Myanmar

23 June 2018

PwC | June 2018 22

New MIC chair promises to stay investor-friendly, says Myanmar "open for business"

During a meeting with four chambers ofcommerce in Yangon on June 22, U Thaung Tun,the new chair of the Myanmar InvestmentCommission (MIC), reinforced intentions to "turnMyanmar into a major regional trade andinvestment destination."The new chair, who officially replaced U KyawWin as head of the MIC on June 16, stressed thatthe body will be transparent, efficient andinvestor-friendly under his leadership.In his first gesture towards upholding thatpromise, U Thaung Tun said one of his toppriorities will be to carry out the so-called MICendorsement under the new Myanmar InvestLaw. This involves setting "strict time limits" forprocessing business permit applications with theMIC, which will be "substantially" reduced fromthe current minimum of 60 days.U Thaung Tun stressed the importance of legalreforms in opening up the Myanmar economy,including the enforcement of the MyanmarCompanies Law on August 1. In that connection,the Directorate of Investment and CompanyAdministration (DICA) has also announced June

22 that all registered companies and entitiesunder the 1914 Myanmar Companies Act and the1950 Special Company Act are required to re-register on the newly established MyanmarCompanies Online electronic registry during the 6month period between August 1, 2018 to 31January 2019.He also touched on on Myanmar's efforts todiversify and raise its exports under the NationalExport Strategy, highlighting the benefits forforeign investors who set up manufacturing basesin Thilawa Special Economic Zone."I would like to underscore that Myanmar hasenormous potential and that the time is ripe toinvest in the country," U Thaung Tun said, addingthat the MIC will strive towards ensuring "win-win situations" for both the government andforeign investors in Myanmar.

Source: Myanmar Timeshttps://www.mmtimes.com/news/new-mic-chair-promises-stay-investor-friendly-says-myanmar-open-business.html

NewspapersMyanmar Times

23 June 2018

PwC | June 2018

3. Weekly Investment News

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PwC | June 2018

Weekly Key Investment NewsHeadlines

Myanmar’s Delta Capital hits final close of second fund at about $70m, falls short of $100m target

Coffee Chain Finds Opportunity in Myanmar Market

AIM-listed MySQUAR acquires MyPAY Myanmar, raises $2.9m to fund deal

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Singapore Myanmar Investco in share sale agreement to dispose unit for US$10.8m

Myanmar builds US$20.9 M worth offshore fixed pilot station

PwC | June 2018 25

Myanmar’s Delta Capital hits final close of second fund at about $70m, falls short of $100m target

Private equity firm Delta Capital has raised closeto $70 million for its second investment fund,falling short of its target of $100 million, yetbecoming the largest Myanmar-specific vehiclethat has been raised so far. MyanmarOpportunities Fund II (MOF II), the vehicle DeltaCapital has been raising for the last year and ahalf, hit its final close at about $70 million inApril 2018, a top executive with the firm said.Alexandra Vanderschelden, director, DeltaCapital Myanmar, said, the corpus of the secondvehicle was “a good size for investments inMyanmar at this stage” even as she added thatover 60 per cent of the capital (total MOF I andMOF II) had already been allocated. “We areactively sourcing additional investmentopportunities,” she said. Delta Capital seeks toinvest in businesses that chase the middle-classconsumption and growth themes. The investor islooking for opportunities in consumer goods andservices, telecom, financial services, logistics,manufacturing, healthcare and education. “Weparticularly like companies that have a uniquecompetitive positioning and those that leverage

technology to reach higher operational efficiency.We tend to avoid sectors that come withsignificant legacy issues and high regulatoryrisks,” said Vanderschelden. Backers of MOF IIinclude family offices from Europe and Asia, aleading regional corporate as well as threeEuropean development financial institutions.Delta Capital, among the early movers inMyanmar, was formed in 2013 as a collaborationbetween Hong Kong-based Simon Murray &Company (SMC), a pan-Asian investmentcompany, and Serge Pun & Associates (SPA) aprivate investment holding company owned andcontrolled by Serge Pun. Nick Powell leads DeltaCapital as managing partner and sits on the boardof the Fund as well.

Source: Deal Street Asiahttps://www.dealstreetasia.com/stories/myanmars-delta-capital-hits-final-close-of-second-fund-at-about-70m-falls-short-of-100m-target-99915/

NewspapersDeal Street Asia

18 June 2018

PwC | June 2018 26

Coffee Chain Finds Opportunity in Myanmar Market

Myanmar International Business Alliance Co., Ltd(MIBA), a franchise of South Korea’s CoffeeBrand, ‘TOM N TOMS’ Coffee for Myanmar,opened its first café at Terminal (3) YangonInternational Airport in June.TOM N TOMS was established in 1998 and as perits motto ‘The Coffee Master from Korea’ Theyhave expanded to the international market withmore than 700 outlets in Korea, Singapore, China,Thai, Malaysia, Mongolia, Philippines, Macao,Australia, America and now in Myanmar.U Aung Sithu Khant, Director of MIBA, themaster Franchise of TOM N TOMS, said “Today,Myanmar Economic Development has emergedand its growth can be seen easily with the proof ofForeign Investments and Global Brandsentering.”“Coffee lovers will like the real coffee taste of ourTOM N TOMS. Besides coffee, we are also sellingother food and beverages and TOM N TOMS’most favorite Pretzel as well. We believe that ourcoffee outlet will be top choice for coffee lovers,whether it’s hanging out with friends or a familyouting or for business meetings,” he added.

Just as the international outlets, TOM N TOMSMyanmar will provide quality, modern andwarmth decoration and opened its first outlet inYangon and plans to open a second outlet inKantharyar Center very soon.

Source: Myanmar Business Todayhttps://www.mmbiztoday.com/articles/coffee-chain-finds-opportunity-myanmar-market

NewspapersMyanmar Business Today

19 June 2018

PwC | June 2018 27

AIM-listed MySQUAR acquires MyPAY Myanmar, raises $2.9m to fund deal

AIM-listed MySQUAR Ltd, a Myanmar-languagesocial media, entertainment and paymentplatform, has announced the acquisition ofmobile payment operator MyPAY Myanmar Ltd,for a consideration of £2 million ($2.6 million),according to its filing on the London StockExchange. MySQUAR simultaneously alsoannounced raising £2.2 million ($2.9 million)through a convertible bond issue offering tofinance the acquisition. MySQUAR has acquiredMyPay through the issue of 72.5 million shares ina cash-cum-stock deal. MyPay’s shares willrepresent 8.6 per cent of the issued share capitalof MySQUAR. “The acquisition of MyPayMyanmar enhances our drive to be the leadingdirectly regulated mobile payments facility forremittances back into Myanmar,” said MySQUARCEO Eric Schaer. MyPAY Myanmar, set up in2016, is in the process of applying to the CentralBank of Myanmar for a payments licence. Theconvertible bonds, which financed the deal, wereissued to Atlas Capital Markets Ltd, a London-based alternative investment fund, at £10,000($13,000) each with a maturity date of two years.

The fundraising also includes the issue of 666,667warrants awarded over 42.9 million shares at£0.0186 ($0.024). The additional sum receivedfrom the bond issue will be used for MySQUAR’sproduct development and to finance workingcapital needs. “Having now deployed the capitalraised from the first issue of Convertible Bonds toAtlas in providing the balance of funds foracquiring MPM and funding the working capitalrequirements, we have raised further capital tocontinue to invest in our Myanmar local languagesocial media network and in particular our mobilepayments application,” Schaer said. MySQUARhas developed Myanmar-language games such asHawk Hero and MyFish, which claim to have 1.5million registered users.

Source: Deal Street Asiahttps://www.dealstreetasia.com/stories/aim-listed-mysquar-raises-2-9m-to-fund-mypay-myanmar-acquisition-100211/

NewspapersDeal Street Asia

21 June 2018

PwC | June 2018 28

Singapore Myanmar Investco in share sale agreement to dispose unit for US$10.8m

MAINBOARD-listed Singapore MyanmarInvestco (SMI) on Monday announced that itssubsidiary, Myanmar Infrastructure Group(MIG), has entered into a US$10.8 million sharesale agreement with Tiger Infrastructure for theproposed disposal of its 99.9 per cent-ownedindirect subsidiary, TPR Myanmar.TPR, which was incorporated in Myanmar in2014, is a subsidiary of MIG, and the agreementincludes the disposal of 9,999 issued ordinaryshares in TPR, as well as all tower stock andpower equipment stock held by TPR in itswarehouse and its port.TPR builds, leases and operatestelecommunication infrastructure and towers inMyanmar. The remaining one issued ordinaryshare of TPR is held by a nominee of thecompany, SMI said.Meanwhile, purchaser Tiger Infrastructure isinvolved in the supply of infrastructureengineering design and consultancy services. Itssubsidiary Tiger Infrastructure Myanmar (TIM)Co is in the same industry as TPR and similarlybuilds, leases and operates telecommunication

infrastructure and towers in Myanmar.The sale consideration of US$10.8 millioncomprises US$9.8 million in cash for the saleshares – 10 per cent of this amount will be paidwithin three business days of the date of theagreement (June 1), with the balance paid on thecompletion date. In addition, US$1 million in cashfor the sale stock, will be paid to MIG within threebusiness days from June 1.Net proceeds of US$10.7 million after deductingexpenses, will largely go towards working capital,servicing bank loans and other operatingrequirements.It added that the telecoms infrastructure marketis undergoing rapid consolidation leaving limitedopportunities for smaller players, and that TPRwith its small market share, is likely tounderperform its larger competitors.

Source: Consult Myanmarhttps://consult-myanmar.com/2018/06/22/singapore-myanmar-investco-in-share-sale-agreement-to-dispose-unit-for-us10-8m/

NewspapersConsult Myanmar

22 June 2018

PwC | June 2018 29

Myanmar builds US$20.9 M worth offshore fixed pilot station

Myanmar is building a US$20.9 million worthoffshore fixed pilot station, according to MyanmaPort Authority (MPA).International bulk carriers enters Yangon portfrom the mouth of the sea 67 kilometers awayfrom Yangon.Chief navigation officers from the MPA gavecommand and controlled the carriers to enter andexit the port safely.Currently the MPA has anchored two alternatingpilot vessels at the mouth of the sea to controlentry and exit of carriers.At present, more ships have been entering at theYangon port. The MPA planned to build thethree-storey offshore fixed pilot station as itneeded more staffs to deploy at the pilot vesselsand maintenance costs of the pilot vessels are big.The offshore station will give advantages such asreducing overall cost and controlling the ships inall weather conditions.The offshore station project included a three-storey building with 33.2 meters in length and30.4 meters in width, a jetty, a generator, watertreatment system, navigation equipments, radar

and three pilot boats.The MPA invited tender to build the station andChina Harbour Engineering succeeded the tender,sources said.

Source: Consult Myanmarhttps://consult-myanmar.com/2018/06/22/myanmar-builds-us20-9-m-worth-offshore-fixed-pilot-station/

NewspapersConsult Myanmar

22 June 2018

PwC | June 2018

3. Weekly New Tenders

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PwC | June 2018

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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Yangon Regional Government: Request for Expressions of Interest for Strategic Consulting & Master Planning Services, New Yangon Development Company Limited, Closing Date: 26 June 2018

Ministry of Agriculture, Livestock and Irrigation: Invitation for Technical and Financial Proposals, The Department of Rural Development, Closing Date: 4 July 2018

Ministry of Construction: Request for Expressions of Interest for Flooding and Landslide Emergency Recovery Project (FLERP), Closing Date: 9 July 2018

PwC | June 2018

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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No applicable tender announced for the week ending June 22 2018

PwC | June 2018

4. MIC Permitted Projects

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PwC | June 2018

MIC Permitted Projects (Meeting 8, 2018)

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No. Name of Company Type of Investment Form of Investment

1 Summit SPA Motors Limited (Japan)Assembly, manufacturing and sales of container boxes

Joint Venture

2 Great Wall-Zhong Neng Co., Ltd (China)Manufacturing and sale of organic fertilizer and all kinds of fertilizer

Joint Venture

3Khin Maung Nyunt Steel Products & Galvanizing Co Ltd (Vietnam)

Production and marketing of galvanized products

Joint Venture

4 Myanmar Electrical Business Group Public Co., LtdManufacturing and distribution of porcelainand polymer insulators for high voltage electrical applications

Myanmar Citizen Investment

Source: DICA

PwC | June 2018

5. Upcoming Events

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PwC | June 2018

Upcoming Events (June 2018) List

Date Location Name of Event Sector Price Focus Points

26-27 June 2018 Yangon

3rd Emerging Asia Banking & FinTechSummit 2018

Finance TBC

“aims to deliver first-hand insights and robust opinions from industry experts to help the attendees to better strategize their blueprints.”

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

PwC | June 2018

Upcoming Events (July 2018) List

Date Location Name of Event Sector Price Focus Points

20-22 July 2018 YangonMyanmar International Tourism Expo

Hospitality Free

“The first edition of Myanmar International Tourism Expo (MITE) is organized by ICVeX, a professional exhibition organizer in Southeast Asia. It will be a platform for foreign tourism organizations or all related business to source Myanmar partners and for Myanmar people to discover new overseas destinations as well as limited-time exclusive offers.

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

© 2018 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 Business Intelligence Publication

For further information please contact:

Jovi SeetSenior Executive Directorjovi.seet@sg.pwc.com

Brandon LyeDirectorbrandon.lye@sg.pwc.com

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