PwC MyanmarWeekly Business Intelligence

Issue 10627 April 2018

www.pwc.com/mm

PwC | April 2018

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PwC | April 2018

1. Weekly Key Financial & Business News

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PwC | April 2018

Weekly Key Financial & Business NewsHeadlines

Excel KC Myanmar disqualified from implementing YPS in Yangon

Myanmar's broadband price war

Myanmar, Vietnam agree to raise bilateral trade over $1b by 2020

MPU cards, Visa and MasterCard credit cards to be enabled under YPS

4

Interview with Myanmar’s transport and infrastructure chief

PwC | April 2018

Weekly Key Financial & Business NewsHeadlines

Yangon focuses on creating growth opportunities, raising living standards

Trade totaling $13.7 billion expected during six month interim period

KfW extends loans for SMEs via CB, Myanmar Apex bank

Yangon deep-sea port brings hope in disappearing villages

5

Accor flies Mercure flag in Yangon

PwC | April 2018 6

Myanmar's broadband price war

Fierce competition and cheaper bandwidth havesent broadband prices tumbling – and put someISPs out of business – but speed and servicequality still often lags behind mobile data.WHEN THE Internet in Myanmar websiteexamined broadband prices in November 2016, itturned up a sad statistic. A broadband connectionin Myanmar was 10 times more expensive than inCambodia, on a megabit per second basis. Andwhile the setup fee in Cambodia was just a US$30deposit, in Myanmar you would pay $400 for theprivilege. But it got worse: Many internet serviceproviders (ISPs) were charging an annual fee, too.The comparison with Thailand or Vietnam waseven bleaker.Eighteen months on, the landscape isunrecognisable. Some ISPs are now offering4mpbs fibre-to-the-home connections for lessthan K50,000 a month – still expensive byregional standards, but a fraction of earlier prices.Competition is fierce: Many new players haveentered the market, including giants like MPT,Telenor and Ooredoo.The smaller players have seen their business

plans completely upended. Consider MyanmarSpeedNet. When it launched in May 2017, it wascharging $95 a month for 2mbps and a $250installation fee. Just four months later, it hadwaived the installation fee and was charging justK49,000 a month. But at least MyanmarSpeedNet has survived: some, like Bluewave, havecome and gone in a matter of months.“Service providers are dropping prices to a levelthat’s hardly sustainable. Some of the ISPs in themarket are on the verge of collapse and aredesperately going all in, taking inconsiderate risksto acquire and retain new customers,” said MrHerbert Kanale, the editor-in-chief of Internet inMyanmar.“This war will definitely leave casualties and aseverything is moving at a fast pace in Myanmar,we should see the first signs of bankruptcies andconsolidation by the end of 2018,” he said.

Source: Frontier Myanmarhttps://frontiermyanmar.net/en/myanmars-broadband-price-war

NewspapersFrontier Myanmar

23 April 2018

PwC | April 2018 7

Excel KC Myanmar disqualified from implementing YPS in Yangon

Excel KC Myanmar will no longer be eligible tobuild and implement a card payments systemcovering public transportation, the YangonRegional Government said on April 21.After discussing terms of the contract, thegovernment said Excel KC Myanmar did not havethe necessary qualifications to implement theYangon Payment Services (YPS) system and thatthe company’s status as tender winner for theproject has been revoked.Excel KC Myanmar had won the tender for YPSon January 10.In December, the Yangon Regional Governmentshortlisted three companies, including Excel KCMyanmar, as potential candidates to implementYPS. A total of 14 companies had tendered for theproject.As Excel KC Myanmar has since been foundunsuitable for the job, the government will nowreview the capabilities of the other two companies- AnyPay Payment Services Co and Asia StamarTransport Intelligent Co – and choose the mostqualified candidate to implement YPS.One reason Excel KC Myanmar no longer qualifies

is that Acer Company, which would have helpedto raise foreign investment capital and contributetechnological knowhow in the execution of YPS,had pulled out from the Excel KC Myanmarconsortium, the regional government said.Among Excel KC Myanmar’s stren-gths are itspartners, including Acer, as they were able tobring in foreign capital as well as newtechnologies needed to build a competent YPSsystem. On April 9 though, Acer said it waspulling out of the consortium, essentially thedisqualifying the whole consortium from carryingout the contract.The move will further delay implementation ofthe YPS, which is the brainchild of Yangon ChiefMinister U Phyo Min Thein. After upgrading thepublic bus network to the new Yangon BusService last January, bus conductors werereplaced by cash boxes.

Source: Myanmar Timeshttps://www.mmtimes.com/news/excel-kc-myanmar-disqualified-implementing-yps-yangon.html

NewspapersMyanmar Times

24 April 2018

PwC | April 2018 8

Myanmar, Vietnam agree to raise bilateral trade over $1b by 2020

Myanmar and Vietnam have agreed to raisebilateral trade and have set a target of exceeding$1 billion in trading value by 2020.The pact was made during State Counsellor DawAung San Suu Kyi’s two-day visit to the countryon April 19-20, according to a statement from theMinistry of Foreign Affairs.Currently, Vietnam is Myanmar’s ninth largesttrading partner. Bilateral trade between Myanmarand Vietnam hit $830 million 2017-18,representing a 50 percent increase from theprevious year, according to the Ministry ofCommerce (MOC).However, Myanmar currently runs a trade deficitwith Vietnam, with imports reaching $400million in value in 2016-17 compared to exports,which totaled just $88 million in value during thesame year.For the ten months of 2017-18, Myanmar importsfrom Vietnam had surged to $490 million, withexports trailing at just $100 million in value.Myanmar mainly imports capital equipment suchas machinery and semi-finished goods fromVietnam, while its main exports are in agriculture.

Raising exportsMyanmar should aim to export more to Vietnamto narrow the trade deficit, U Zaw Min Win, chairof Union of Myanmar Federation of Chambers ofCommerce and Industry.“We need to make preparations to export more.The State must encourage and support small andmedium enterprises that can export high qualityagriculture products. The government should alsogrant as much capital as needed to supportexports in the agriculture sector,” he said.In fact, the MOC has already signed amemorandum of understanding with the VietnamMinistry of Agriculture and Irrigation to raiseexports of Myanmar agricultural produce toVietnam, said U Khin Maung Lwin, assistantpermanent secretary at the MOC.

Source: Myanmar Timeshttps://www.mmtimes.com/news/myanmar-vietnam-agree-raise-bilateral-trade-over-1b-2020.html

NewspapersMyanmar Times

24 April 2018

PwC | April 2018 9

MPU cards, Visa and MasterCard credit cards to be enabled under YPS

Bank account holders will be able to use theirATM cards as prepaid cards under the YangonPayment Services (YPS) scheme, said YangonChief Minister U Phyo Min Thein.The Yangon Regional Government is currently inthe process of awarding the contract toimplement YPS to one of two companies: AnypayPayment Services or Asia Starmar TransportIntelligent CoAfter it decides on the right company for the job,preparations will be made for ATM and creditcards issued by the 23 local banks to be enabledunder YPS, which is envisaged to be a single cardpayments system in Yangon.The aim is to enable card holders to use a singlecard for all cash transactions, including takingpublic transport and making payments inrestaurants and supermarkets as well aswithdrawing cash at the ATM.“Existing cards, including ATM cards under theMyanmar Payment Union (MPU) and Visa andMasterCard credit cards, will be enabled underYPS,” U Phyo Min Thein told The Myanmar Timesat a press conference last week.

The regional government on April 21 alsoannounced that Excel KC Myanmar, the originaltender winner, will no longer be eligible to buildand implement YPS in Yangon.After discussing terms of the contract, thegovernment said Excel KC Myanmar did not havethe necessary qualifications to implement the YPSsystem and that the company’s status as tenderwinner for the project has been revoked. Excel KCMyanmar had won the tender for YPS on January10.U Phyo Min Thein said fees would be involvedwhen using MPU cards or credit cards under YPS.“To launch this system, we will need anappropriate fee rate which is convenient andaffordable for all. So, we decided to award thecontract to a separate company that is able toimplement the system with the right fee,” theChief Minister said.

Source: Myanmar Timeshttps://www.mmtimes.com/news/mpu-cards-visa-and-mastercard-credit-cards-be-enabled-under-yps.html

NewspapersMyanmar Times

25 April 2018

PwC | April 2018 10

Picture a busy intersection in a Southeast Asiancity, and you’ll find yourself surrounded bymotorbikes revving and swerving through thetraffic. Not in Yangon, though.Myanmar’s largest city banned motorbikes in2003, making it fertile ground for buildingaffordable and reliable public transport. For thefirst time in its modern history, the country isdeveloping a long-term plan for public transport,Permanent Secretary of the Ministry of Transportand Communications, U Win Khant. “We aretrying to develop an efficient, modern, safe andenvironmentally-friendly transport system,” hesays. GovInsider looks at how the country isrestoring rail demand, modernising state-ownedoperators, and introducing regular bus servicesfor the first time.Myanmar’s rail infrastructure has fallen intodespair due to a lack of maintenance. “Rail linesare under-invested,” U Win Khant notes. TheYangon-Mandalay railway line was once thecountry’s backbone, but now buses and cheapflights dominate, with trains carrying only 10% ofintercity demand.

The country is working with the JapaneseGovernment and Asian Development Bank (ADB)on projects to improve infrastructure andmanagement of the public transport. “It’s a clearpriority of the government to revitalise andmodernise their railway system, so that in thelong term they have a significant role in thetransport sector,” says Adrien Veron-Okamoto,Transport Specialist, ADB.The 600km Yangon-Mandalay line is beingrenewed with a US$232 million loan from Japan.The upgrade will cut the rail journey from 24hours to about nine hours, when completed in2021-22, making it the country’s “biggest success”in public transport, the permanent secretary says,Overall, Myanmar’s transport sector needsinvestment worth US$60 billion over the next 15-20 years, according to the government. But U WinKhant believes that “the government cannot fulfillour requirements”.Source: Consult Myanmarhttps://consult-myanmar.com/2018/04/25/exclusive-interview-myanmars-transport-and-infrastructure-chief/

NewspapersConsult Myanmar

Interview with Myanmar’s transport and infrastructure chief

25 April 2018

PwC | April 2018 11

Trade totaling $13.7 billion expected during six month interim period

The Ministry of Commerce (MOC) is expectingtrade totaling $13.7 billion for six month April-September period before the new 2018-19 fiscalyear commences on October 1, said U KhinMaung Lwin, assistance secretary of the MOC.Exports are expected to total $6.7 billion in value,while imports are estimated to reach $7 billion forthe period.“While the export of beans and pulses has fallen,demand for Myanmar maize seems to beincreasing. We’ve also been exporting more fruitssuch as mangoes on top of our regular exports ofrice and rubber,” said U Khin Maung Lwin.Myanmar exported around 85,000 tonnes of riceand 30,000 tonnes of maize during the first twoweeks of April. Meanwhile, mango farmers arealso being told not to use chemicals to artificiallyripen the fruit, which is expected to raise exportvolumes and quality.“To maintain our market and to be able to exportbetter quality products, educational activities arebeing carried out in with local farmers,” U KhinMaung Lwin said.According to the MOC, trade volumes for the first

two weeks of April hit $1.07 billion, with importstotaling $670 million exceeding exports of $400million. Compared to the same period last year,imports have increased by about $66 million,while exports are down by $56 million.The government has been taking efforts to raiseexports and narrow the current account deficit.During the 2017-18 fiscal year, Myanmar’s currentaccount deficit ballooned to 5 percent of GDPcompared to 3.9pc in 2016-17 Imports, driven bystrong domestic consumption of overseas goodsand demand for capital goods to supplyinfrastructure projects, grew 12pc during the year.According to the Asian Development Bank, thecurrent account deficit will widen further to 5.4pcof GDP in 2018-19.

Source: Myanmar Timeshttps://www.mmtimes.com/news/trade-totaling-137-billion-expected-during-six-month-interim-period.html

NewspapersMyanmar Times

25 April 2018

PwC | April 2018 12

Yangon focuses on creating growth opportunities, raising living standards

The Yangon Regional Government is drawing up amaster plan with the aid of the JapaneseInternational Cooperation Agency and KoreaInternational Cooperation Agency to transformYangon into an economic hub with job andbusiness opportunities for residents andinvestors, according to a report on thegovernment’s performance by state-owned mediayesterday.Topping the list of priorities is grantingbusinesses access to credit. On this front, theregional government will create a new division toassist small and medium enterprises (SMEs) andfacilitate their relationships with investors so thatmore growth opportunities can be generated.The government will also aim to educate the SMEsector on developing strategic business plans andsound book keeping practices so that the firms areable to qualify for loans needed to develop andgrow.Meanwhile, Yangon Region Chief Minister U PhyoMin Thein said the New Yangon DevelopmentCompany is now ready to begin implementingprojects at the Yangon New City project. The

project will be developed across more than18,000 acres of farmland in Kyimyindaingtownship, Seikgyikanaungto township andTwante township in the south west of Yangon.According to U Phyo Min Thein, the first stage ofdevelopment at Yangon New City will focus oninfrastructure and industry work under PublicPrivate Partnerships with the regionalgovernment.Already, local and international businesses havebeen invited to participate in tendering forprojects and interest from the Chinese, Japanese,Koreans and Asean in road construction, powergeneration and factories is “looking strong,” UPhyo Min Thein said. There have already beenproposals to build two bridges connecting the newcity to the old.Meanwhile, interest from investors in the US andEU has so far been centered in the technology andservices sectors.Source: Myanmar Timeshttps://www.mmtimes.com/news/yangon-focuses-creating-growth-opportunities-raising-living-standards.html

NewspapersMyanmar Times

26 April 2018

PwC | April 2018 13

KfW extends loans for SMEs via CB, Myanmar Apex bank

A loan agreement to extend €10.85 million(US$13.22 million) to finance small and medium-sized enterprises in Myanmar was signed betweenKfW Development Bank (KfW) and two localbanks, according to Daw San Yin Aung from CBBank.The planning and finance ministry, KfW, CB Bankand Myanmar Apex Bank signed the agreement inNay Pyi Taw on April 24, CB Bank’s generalmanager Daw San Yin Aung said.CB Bank is recipient of a loan amounting to €3million, while Myanmar Apex Bank receives theremaining, which is more than €6 million, shecontinued.This is the second round of loans provided byBerlin for Myanmar’s SMEs and is based on abilateral government-to-government agreement.The first grant totalled €4.45 million.KfW’s step loans to the private banks have a 3.5pcinterest rate, 12-year grace period, 3-year paybackperiod and a total repayment period of 15 years.The banks will add 5pc charge for administrativeservices and other services. The loans will beoffered to SMEs with an interest rate starting

from 8.5pc per annum.CB bank has given out first step loans with 8.5pcinterest and the rates remain the same for thesecond step loans. A business can acquire up toK100 million loan, he said.According to KfW’s rules, 75pc of the loans fromboth banks must be allocated for propertyacquisition and 25pc must be for businessoperations, Daw San Yin Aung added.CB bank’s CEO U Kyaw Lin said that challengesremain for the country’s financial system forSMEs to finance themselves. Notably, the lack ofland registration system is problematic.“Additionally, SMEs themselves must have solidfinancial statements,” he observed, adding thattax payment and financial statements are areaswhere businesses need to catch up before bankscan efficiently and effectively give out loans.

Source: Myanmar Timeshttps://www.mmtimes.com/news/kfw-extends-loans-smes-cb-myanmar-apex-bank.html

NewspapersMyanmar Times

26 April 2018

PwC | April 2018 14

Yangon deep-sea port brings hope in disappearing villages

About a dozen houses, mostly small bamboo huts,occupy the narrow strip of land between theriverbank and the sea wall that protects Taw KaLuu village from the Yangon River, not far fromwhere its muddy waters empty into the Gulf ofMottamaThe houses in the village, in Yangon’s outersouthwestern Kungyangon Township, are underthreat because the riverbank has beendramatically eroded by the tide.“These houses probably have to move inside thesea wall this year,” village administrator U AungTun Kyaw told Frontier on April 7.When villagers helped the Irrigation and WaterUtilisation Management Department to build thesea wall five years ago it was at least 500 feet (152metres) from the riverbank, Aung Tun Kyaw said.“Now, as you can see, it is only about 50 feetaway,” he said.Aung Tun Kyaw said that if the erosion of theriverbank continued at its current rate, the seawall would have to be built up to 5 kilometres (3miles) inland and the villagers would probablyneed to be relocated.

A deep channel in the river near the village meansthat it runs fast when the tide is going out,constantly wearing away the riverbank.“The sea-lane is so close to the riverbank thatyour shout can be heard by the crew on sea-goingvessels,” said Aung Tun Kyaw, adding that beyondthe deep channel there was shallow water and asandbar.Villagers had measured the depth of the channelat low tide at about 15 metres (50 feet), he said.“We haven’t measured it at high tide; it must bemuch deeper.”Sandbars are formed by sediment deposited by ariver and are constantly changing according to thevelocity of the current. Villagers say the sandbarsat the mouth of the Yangon River are aggravatingthe erosion of the riverbank.

Source: Frontier Myanmarhttps://frontiermyanmar.net/en/yangon-deep-sea-port-brings-hope-in-disappearing-villages

NewspapersFrontier Myanmar

27 April 2018

PwC | April 2018 15

After an extensive renovation, AccorHotelsofficially raised the first Mercure flag over aproperty in Myanmar’s commercial capital lastweek.Unofficially, the former Micas Hotel Apartmentswas rebranded Mercure Yangon Kaba Aye in thethird quarter of 2017 and remained open forbusiness, during a renovation that ended inMarch.Last July under Accor’s management, the hotelinitially offered a USD114 ‘opening’ rate for aroom with a kitchenette, valid until September 302017.Today, the stay has got considerably cheaper.Booking.com posts a rate, before tax and service,at USD 92.16 after eight months on the Mercureticket. Last week’s ‘official’ opening was the icingon the cake, a celebration for VIPs and the hotelgroup’s executives to pat themselves on the backfor acquiring their first Mercure managementcontract in the country.The Mercure brand offers a loose fit forindependent hotel owners, who gain full access toAccorHotels’s formidable distribution system and

loyalty programmes without too many pressingobligations to meet the usual stringent brandguidelines.It allows AccorHotels to cherry pick contractsfrom a variety of hotels that lack hardware fit withany of its mainstream brands.The former Micasa Hotel Apartments is owned bySC Capital Partners Group, which has justcompleted a comprehensive renovation including40 rooms and 143 one to three-bedroom suites forshort or long-term stays ( 30-days minimum).Booking.com fields just 49 reviews on the hoteland gives it a ranking of 8.4 and a four-star rating,while TripAdvisor posts 159 reviews and lists it13th out of 451 properties for best value inYangon.Based on location, Mercure’s immediatecompetitors are Sedona Hotel selling at USD125.99, Inya Lake Hotel at 85.67, Melia Yangon atUSD 134.50 and Hotel Parami at USD 86.94.Source: Consult Myanmarhttps://consult-myanmar.com/2018/04/27/accor-flies-mercure-flag-in-yangon/

NewspapersConsult Myanmar

Accor flies Mercure flag in Yangon

27 April 2018

PwC | April 2018

2. Weekly Key Policy News

16

PwC | April 2018

Weekly Key Policy NewsHeadlines

Property weak on canned tax amnesty bill

Government to collect tax to fund telecoms in rural areas

Casinos may be allowed to operate after gambling law amendment

17

Myanmar permits full foreign capital investments in education sector

Draft Health and Occupational Safety Law submitted to Hluttaw

PwC | April 2018 18

Property weak on canned tax amnesty bill

With interest in investment properties inMandalay expected to be lackluster in the comingmonths, property agents reckon demand willlikely centre on homes priced below K1,000 lakh.“Currently, most sectors of the economy areslowing, so we do not see much demand for resaleproperties,” U Wunna Soe, a property agent fromPoe La Min Real Estate Agency, said.“The economy, including the real estate sector,has been slow. Only serious home buyers will beinterested in the property market. They willmostly be interested in homes priced belowK1,000 lakh,” he said.The other reason for the weak appetite forproperty, especially for investment purposes, isthe recently canned tax amnesty bill. If enactedunder the 2018 Union Tax Law, that bill wouldhave allowed holders of previously undeclaredincome to bring their money back into theeconomy at a tax rate of just 3 percent for the firstsix months.“The real estate sector had hoped that the marketwould become active again with the influx offunds back into the economy,” U Wunna Soe said.

“However, the bill failed to be enacted and theproperty market will likely continue to slow,” headded.The property sector has been in the doldrumssince 2016, when the government imposed taxesof between 15pc and 30pc on various properties,depending on their value. As such, demand forproperties above K300 lakh has slowedsubstantially in the last two years.

Source: Myanmar Timeshttps://www.mmtimes.com/news/property-weak-canned-tax-amnesty-bill.html

NewspapersMyanmar Times

25 April 2018

PwC | April 2018 19

Government to collect tax to fund telecoms in rural areas

Funds will be collected from a tax on telecomsoperators starting in June to extend thetelecommunications network to remote areas ofthe country that do not yet have access, said anofficial of the Ministry of Transport andCommunications.The Telecommunications Law, section 54 statesthat the ministry can establish and supervise aUniversal Service Fund to fulfill basic telecomsservices in the public interest in any location byimplementing universal service plans.Deputy Director General U Myo Swe of theDepartment of Post and Telecommunication saidthat it expects the Universal Service Fund to startcollecting money from operators in June.“The preparation processes to collect theUniversal Service Fund from telecoms operatorsis nearly finished.” U Myo Swe said.“We’ll collect 2 percent of the income of theoperators. We expect to begin in June,” he added.The department drafted the Universal ServiceStrategy with the help of a consultant hired by theWorld Bank according to the provisions of theTelecommunication Law and sought public

comment on the plan in February.The telecoms network is now available to nearly90 percent of the country’s population, andtelecoms services are put at the disposal ofresidents in areas lacking telecommunicationsnetwork if telecommunications infrastructure isalready in place.“The current network covers over 90pc ofMyanmar’s population. But for those areas thatcannot get access to the network, network towerswill be built with the Universal Service Fund fromthe operators,” said U Myo Swe.“Other telecommunications services will beavailable once the basic infrastructure is built,”the deputy director general said.Supporting rural areas’ access to the network viathe fund contributes to the regions and thecountry, said local business owners.

Source: Myanmar Timeshttps://www.mmtimes.com/news/government-collect-tax-fund-telecoms-rural-areas.html

NewspapersMyanmar Times

24 April 2018

PwC | April 2018 20

Casinos may be allowed to operate after gambling law amendment

Casinos will be allowed to operate in Myanmarafter amendments are made to the Gambling Lawby the Ministry of Home Affairs (MHA), isenacted, said U Aung Naing Oo, director generalof the Directorate of Investment and CompanyAdministration (DICA) this week.This comes after five regional and state chiefministers from Mandalay, Tanintharyi, Shan,Kayin and Mon in January asked Vice President UHenry Van Thio to grant permission for casinos tooperate in hotels in their respective areas.Currently, casinos are banned in Myanmar underthe 1986 Gambling Law. Amendments arecurrently being processed by the MHA afterwhich casino operations will be allowed in thecountry, U Aung Naing Oo told The MyanmarTimes.U Aung Naing Oo added that casino investorshave shown interest in expanding in Myanmar forfour years now. Casino operators from Macao andEast Asia are among those who have expressedinterest, he said.Once amended, the Gambling Law will takeprecedence over the Hotel and Tourism Law,

which is now being discussed in Parliament. “TheHotel and Tourism Law contains one stipulationwhich allows casinos to operate together with ahotel,” said U Yan Win, chair of the MyanmarTourism Federation.“However, if the Gambling Law is not amended,casinos will not be allowed to operate, even if it iswith a hotel,” he said.He added that casinos can be used to draw moretourists into Myanmar and used to promotetourism in the country.However, under former President U Thein Sein’sterm, the Myanmar Investment Commission hadreleased a statement (1/2013) which allowedcasinos for foreigners in restricted areas underthe remit of the Ministry of Hotels and Tourism.Two casinos are already operating in Myeik,Tanintharyi Region, together with two hotels onTha Htay island and Yadana Island.

Source: Myanmar Timeshttps://www.mmtimes.com/news/casinos-may-be-allowed-operate-after-gambling-law-amendment.html

NewspapersMyanmar Times

27 April 2018

PwC | April 2018 21

The Myanmar Investment Commission (MIC) haspermitted foreigners to make full capitalinvestments in private schools in Myanmar,according to Notification 7/2018 issued by theMIC on April 20.This means foreigners will now be able to fullyown and operate private schools teaching acurriculum prescribed by the Ministry ofEducation (MOE) or an international curriculum.International service providers will now be able tomake investments in basic education schools,technical, vocational and training schools, highereducation schools, subject-based schools andprivate schools designated by the MOE, accordingto the notification.The move is good news for local students, whowill now be able to choose from moreinternational education options, Daw Khin HninSoe, principal and director of MyanmarMetropolitan College, said.Even before the notification was released, foreigninterest in the Myanmar education sector hadbeen on the rise. Earlier this month, London-listed Myanmar Strategic Holdings (MSH) and

Auston Institute of Management announced ajoint venture to set up and operate a privateschool in Yangon.The initial curriculum will include the Diploma inEngineering Technology, Diploma in ConstructionProject Management and Diploma in Networking,Information Systems and Security.MSH also announced the planned opening of itsthird Wall Street English language centre inYangon in August. It opened the first two centreslast year and is targeting up to ten centres acrossMyanmar by 2027.Daw Khin Hnin Soe said that a framework shouldbe set up to maintain the quality of investors whoenter into the sector. “The government shouldmonitor foreign direct investments (FDI) into thissector and approve only the quality options,” shesaid.

Source: Consult Myanmarhttps://consult-myanmar.com/2018/04/27/myanmar-permits-full-foreign-capital-investments-in-education-sector/

NewspapersConsult Myanmar

Myanmar permits full foreign capital investments in education sector

27 April 2018

PwC | April 2018 22

Draft Health and Occupational Safety Law submitted to Hluttaw

The draft of the Health and Occupational SafetyLaw written by the Ministry of Labour,Immigration and Population has been submittedto the Hluttaw, said Minister U Thein Swe.The bill will be discussed in the coming Hluttawsession, he said at the Workplace Safety andHealth Seminar on Wednesday.“It depends on the Hluttaw to approve it. It couldtake a long time to approve if the Hluttaw hasother matters to deal with,” he said.He said the law needs to be carefully implementedas it concerns several ministries and requirescooperation to carry out the details.“As Myanmar has no experience on the matter, wewill debate it in depth before carrying it out. It isnot easy. It needs to be discussed as it is veryserious,” he said.Once the law has been approved, inspectors forworkplace safety can be appointed and adepartment can give instructions for workplacesafety measures.Myanmar is now acting as the chair for workplacesafety and health in the ASEAN region. AlthoughMyanmar is working on the topic, proper

education and equipment to ensure workplacesafety are still lacking.“Not having a law about it is part of the reason,and some business owners themselves are notaware of it. Similarly, workers don’t take itseriously or are not aware of it.Let’s say construction workers don’t want to wearhelmets and boots on site.They also don’t want to wear masks, as theybother them. They need to be educated, andeveryone needs to cooperate,” said U Thein Sweto The Myanmar Times.Once the law is passed, more effective work willbe carried out on educating workers andemployers on safety, conducting inspections, andproviding assistance, he said.The International Labour Organization (ILO)asked to increase data and information on theissue to contribute to occupational safety inMyanmar.Source: Myanmar Timeshttps://www.mmtimes.com/news/draft-health-and-occupational-safety-law-submitted-hluttaw.html

NewspapersMyanmar Times

27 April 2018

PwC | April 2018

3. Weekly Investment News

23

PwC | April 2018

Weekly Key Investment NewsHeadlines

Zay Kabar Co partners Chinese to develop one-stop bazaar in Mingaladon

Myanmar delivery startup Food2U gets six-digit sum from Premium Distribution

South Korea eyes new Myanmar industrial zone for automotive exports

24

Foreign investment expected to hit $3.4 bn in six months

Myanmar: Microfinance firm MFIL secures $6m loan from Yoma Bank

PwC | April 2018 25

Zay Kabar Co partners Chinese to develop one-stop bazaar in Mingaladon

Myanmar conglomerate Zay Kabar Company andChinese developer Zhejiang Luding InvestmentCo have signed an agreement to jointly develop abazaar in Mingaladon township.Designs for the project, which will involve thedevelopment of a wholesale and retail market,residential units and office buildings across 124acres of land, have been submitted to the YangonCity Development Committee (YCDC) andMyanmar Investment Commission (MIC) for thenecessary approvals.Construction is expected to begin after the MICapproves a grant for the project. Both companieshave committed a total of $700 million to developthe project.The idea to develop the bazaar came about afterthe Ministry of Construction approved theconstruction of a 40.5 kilometer highway linkingStrand Road in downtown Yangon to the Yangon-Mandalay highway.One of the advantages of the highway is that itwill reduce traveling time between downtownYangon and Yangon International Airport, whichis in Mingaladon, to just 20 minutes during peak

hour traffic.Soon, Yangon residents can also make use of thehighway to visit the Mingaladon Bazaar, which“will be a one-stop shopping bazaar inMingaladon,” said U Khin Shwe, chair of ZayKabar Company.“The Mingaladon Bazaar will provide consumerswith an option to buy everything they need in onearea as traffic congestion and space constraints inthe downtown area sometimes prevent them fromdoing so.”Zay Kabar will work with the China’s ZhejiangLuding Investment Co, which is expected toprovide the financing and technological know-how, to develop the project.

Source: Myanmar Timeshttps://www.mmtimes.com/news/zay-kabar-co-partners-chinese-develop-one-stop-bazaar-mingaladon.html

NewspapersMyanmar Times

23 April 2018

PwC | April 2018 26

Myanmar delivery startup Food2U gets six-digit sum from Premium Distribution

Food2U, Myanmar’s home-grown food deliveryplatform, has raised a six-digit investment fromPremium Distribution, a distributor in retail, foodservices and non-food products, according tosources familiar with the development. PremiumDistribution is known to be backed by City MartHoldings, Myanmar’s icon in the retail industry. Itimports and distributes products includingbrands like Nestle, Fontana, Cadbury, Ferreroand non-food items like Classics, Lock&Lock andLuminarc. Premium Distribution has notresponded to a DEALSTREETASIA query seekingconfirmation of the development at the time ofpublishing this article. The investment is said tohave closed in April. The post-money valuation ofthe startup, founded in early 2015, is said to be inthe region of over $2 million. Food2U is led byfounder and managing director Kyaw Myo Thet,whose background is software engineering. InMay last year, Food2U raised a six-digit amountfrom individual investors comprising Zin LinnAung, Ko Ko Gyi and iMyanmarHouse.comfounder, Nay Min Thu. Food2U, which hadachieved a run rate of handling about 5000

deliveries per month last year, has expanded itsservices beyond Yangon to Mandalay andTaunggyi.Food2U is also known to have forged apartnership with Pizza Hut in Myanmar, a jointventure between Pizza Hut Myanmar, City MartHolding and Jardine Restaurant Group. InMyanmar, Food2U competes with online fooddelivery service YangonDoor2Door. The markethas also seen another entrant, Shwe Bite, bornout of Phandeeyar Innovation Lab’s acceleratorCohort 2. Shwe Bite delivers home-cooked food,empowering women and homemakers to earnextra income.

Source: Deal Street Asiahttps://www.dealstreetasia.com/stories/myanmar-delivery-startup-food2u-gets-six-digit-sum-from-premium-distribution-96593/

NewspapersDeal Street Asia

23 April 2018

PwC | April 2018 27

South Korea eyes new Myanmar industrial zone for automotive exports

State Counsellor Daw Aung San Suu Kyi onMonday received Mr Kim Hyun-chong, Ministerof Trade, Industry and Energy of Korea in Nay PyiTaw, according to state-owned media.During their meeting, the leaders agreed toenhance existing bilateral economic relations bypromoting trade and investment as well assharing technology. South Korea is also welcometo establish new industrial zones in Myanmar.Mr Kim also met with Minister of Commerce DrThan Myint in Nay Pyi Taw. The ministersdiscussed establishing an industrial zone forKorean companies to draw further foreign directinvestments into Myanmar.The focus of the Myanmar-Korea industrial zonewill be to set up an automotive hub tomanufacture and assemble Korean vehicles forexport purposes, said U Yan Naing Tun, DirectorGeneral of the Trade Department under theMinistry of Commerce. The new industrial zonewill be located over 500 acres Nyaung Na Pin,Hmawbi township,Yangon region. According tomaster plans for Yangon –Hanthawaddy – BagoCorridor and Yangon South Western Regional

Development, the Myanmar – Korea industrialzone is expected to draw investments of up to$200 million and should be complete by 2025.The Korea Land & Housing Corporation (LH), inpartnership with the Ministry of Construction, isalready building a $120 million, 2.4 sq mindustrial complex in Hmawbi township.There are also six Korean companies that havealready y opened factories at the Thilawa SpecialEconomic Zone (SEZ), including food company CJCheiljedang and Yojin Construction &Engineering.South Korea has also invested $98 million toconstruct an international-standard logistics hubat Shwe Lin Ban Industrial Zone in Hlaing TharYar township, Yangon region. HUBS MK Co Ltdfrom South Korea and the Myanmar TradePromotion Organisation under the Ministry ofCommerce signed an initial agreement for theproject in January.Source: Myanmar Timeshttps://www.mmtimes.com/news/south-korea-eyes-new-myanmar-industrial-zone-automotive-exports.html

NewspapersMyanmar Times

25 April 2018

PwC | April 2018 28

Foreign investment expected to hit $3.4 bn in six months

It is estimated that Myanmar will see up toUS$3.4 billion in foreign investment in a period ofsix months from April to September this year,said Aung Naing Oo, secretary of MyanmarInvestment Commission.He claimed so during a press conference held atthe Department of Investment and CompaniesAdministration in Yangon on April 24. that 2018-2019 FY would see more foreign investment ininfrastructure sector.Now is the transition period between the previous2017-2018 fiscal year and the upcoming 2018-2019 FY. In this period, foreign investment flowsmostly to the sectors of manufacturing, housingand services.The 2018-2019 FY starts October 1 this year andends on September 30 next year.According to the investment commission, morethan US$5.4 billion worth of foreign investmententered the country up until the first week ofFebruary in 2017-2018 FY.Foreign investments mostly come fromSingapore, China, South Korea, Taiwan, HongKong, Japan and Malaysia.

Source: Eleven Myanmarhttp://www.elevenmyanmar.com/business/13804

NewspapersEleven Myanmar

25 April 2018

PwC | April 2018 29

Myanmar: Microfinance firm MFIL secures $6m loan from Yoma Bank

Myanmar Finance International Limited (MFIL),a microfinance joint venture company of AIM-listed Myanmar Investments International (MIL),has secured a MMK 8 billion ($6 million) loanfrom Yoma Bank. “MFIL will use the loan tofurther expand its loan portfolio and open newbranches in Yangon and Bago,” the company saidin its announcement. The proceeds will also beused to roll out its newly launched microfinanceloan product. The security for the loan was givenby Norwegian Investment Fund for DevelopingCountries (Norfund), Triple Jump andDeveloping World Markets. “MIL is committed tomaking investments that are both profitable andalso socially transformational. MFIL is not onlyproviding MIL with a great return on capital buthas helped to increase the income andopportunities of over 50,000 families. This back-to-back facility led by Norfund will allow MFIL toaccelerate its lending,” said Aung Htun, managingdirector of MIL. MFIL offers services to nearly54,000 borrowers in Yangon and Bago, with anaggregate loan book of over MMK 11 billion($8.29 million). “Our investment will contribute

to economic growth and poverty reduction inMyanmar,” said Fay Chetnakarnkul, head of Asiaat Norfund. The debt support comes about a yearafter MFIL secured a $1-million loan fromSymbiotics SA, a firm that provides investmentadvisory and portfolio management services.MFIL is a joint venture between MIL, MyanmarFinance Company and Norfund with a total paid-up capital of about $6 million. MIL’s contributionin MFIL started in 2014 with a $2-millioninvestment in MFIL. The following year, themicrofinance firm welcomed Norfund as aninvestor with an investment of $1.4 million. MILand Myanmar Finance Company now hold a 37.5per cent stake each, while Norfund owns 25 percent. Having an intention to get long-term debtfacilities, MFIL did receive 1 million loan fromMalaysia’s Maybank in November 2016 andanother $1 million follow-on investment sevenmonths later from Maybank.

Source: Deal Street Asiahttps://www.dealstreetasia.com/stories/mfil-secured-6-million-loan-from-yoma-bank-96838/

NewspapersDeal Street Asia

25 April 2018

PwC | April 2018

3. Weekly New Tenders

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PwC | April 2018

Tenders (Myanmar Government)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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Ministry of Labour, Immigration and Population: Social Security Board Information System Implementation (Postponement of Tender Submission), Closing Date 31 May 2018

PwC | April 2018

Tenders (Multilateral organizations) (cont’d) 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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ADB: Request for expression of interest for Consulting firm hiring - TRADE FINANCE for a bank in Myanmar, Closing Date: 14 May 2018

WBG: Request for expression of interest for Supply Chain Finance Specialist-Financial Institutions Group Advisory Program, Closing Date: 15 May 2018 (Individual)

WBG: Request for expression of interest for Credit Risk Specialist - Financial Institutions Group Advisory Program, Closing Date: 15 May 2018 (Individual)

ADB: TA-9413 MYA: Resilient Communities Development Project - Financial Management Specialist (51242-001), Closing Date: 30 April 2018 (Individual)

PwC | April 2018

4. MIC Permitted Projects

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PwC | April 2018

MIC Permitted Projects (Meeting 5, 2018)

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No. Name of Company Type of Investment Form of Investment

1 Diamond Dragon Co., Ltd Manufacturing and marketing of edible oilMyanmar Citizen Investment

2 Irrawaddy Fisheries Development Co., Ltd Breeding, manufacturing and selling of prawnsMyanmar Citizen Investment

3 Diamond Dragon Co., Ltd Manufacturing of plastic productsMyanmar Citizen Investment

4 Supreme Services Team Hotel Co., Ltd Hotel Services Myanmar Citizen Investment

5 Ayeyar Apex Construction Co., LtdConstruction operation and leasing of residence & service apartment

Myanmar CitizenInvestment

6 Global Mart Development Co., Ltd Hotel ServicesMyanmar CitizenInvestment

7 GPS Joint Venture Co., Ltd Processing & sales of lead concentrate Joint Venture

Source: DICA

PwC | April 2018

MIC Permitted Projects (Meeting 5, 2018) (cont’d)

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No. Name of Company Type of Investment Form of Investment

8 Brighter Energy Co., LtdImportation, storage, distribution and sales of LPG, gasoline and diesel

Myanmar Citizen Investment

9 Hlaing Inland Terminal and Logistics Co., LtdInland terminal logistics centre and bonded warehouse

Myanmar Citizen Investment

Source: DICA

PwC | April 2018

5. Upcoming Events

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PwC | April 2018

Upcoming Events (May 2018) List

Date Location Name of Event Sector Price Focus Points

09-11 May 2018 Yangon

Myanmar Medical Heathcare Exhibition & Conference

Healthcare Free

This event showcases products like Medical Devices, Medical Equipment, Pharmaceutical Products, Hospital & Clinical Equipment, Cosmetics, Skincare, Beauty Enhancement etc.

10-12 May 2018 Yangon Complast MyanmarIndustrial Engineering

Free

This event showcases products like Raw materials, polymers & resins, intermediates, blends & alloys, composites, converting equipment, testing equipment and much more.

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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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