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Myanmar investment climate   oct 2013 ธ.กสิกรไทย
 

Myanmar investment climate oct 2013 ธ.กสิกรไทย

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    Myanmar investment climate   oct 2013 ธ.กสิกรไทย Myanmar investment climate oct 2013 ธ.กสิกรไทย Presentation Transcript

    • Myanmar Investment Climate “How Thai banks can support investors to do businesses” Oct 2013 Yangon Representative Office Global Business Development Department
    • Agenda • Quick Fact - Myanmar • Myanmar Financial System: Structure & Products • Investment: Initial Capital Injection & Source of Fund • International Trade: Letter of Credit, Remittance & Guarantee • Opportunities for Investors • KBank: AEC Plus Strategy & Yangon Representative Office
    • Quick Fact MYANMAR
    • Country Overview Name Republic of the Union of Myanmar Capital Nay Pyi Taw Area 676,578 km2 (ranked 40th in the world) Population 54.6 million Ethnic Group Burma 68%, Shan 9%, Karen 7%, Rakhine 4%, Chinese 3%, Indian 2%, Mon 2%, Others 5% Language Burmese (Official), Numerous minority languages Religions Buddhist 89%, Christian 5%, Muslim 4%, Animist 1%, Others 2% Administrative 7 Regions: Ayeyarwady, Bago, Magway, Mandalay, Sagaing, Taninthayi, Yangon Division 7 States: Chin, Kachin, Kayah, Kayin, Mon, Rakhine, Shan Government Unitary Presidential Constitutional Republic • President THEIN SEIN (since February 4, 2011) • Vice President SAI M0UK KHAM (since February 3, 2011) • Vice President NYAN HTUN (since August 15, 2012) Timezone 6.5 hours ahead of GMT Fiscal Year April 1 - March 31 Currency Kyat ( MMK) – MMK970 = USD1 Membership ASEAN, BIMSTEC, WTO, UNCTAD, UNESCO, UN, WHO, WIPO, IMF
    • GDP Growth Forecast % Change (YoY) 5.3 5.5 6.0 6.5 6.7 Source: ADB • In 2012, GDP grew 6.0%, valued at more than $54 billion while GDP per capita reached $855 • Growth is forecasted to rise gradually to 6.5% in 2013 and 6.7% in 2014 • Economy will grow as the country continue to reform its policy and improve investment & business climate
    • 6,412.7 1,887.4 1,474.3 2,448.3 4000 Trade Balance 100.5 5000 Import Export 3,405.5 6000 2,235.8 7000 4,543.3 8000 4, 131.4 6,779.1 9000 7,586.9 10000 8,861 USD Million 9,068.9 8.977 9,035.1 9,135.6 Overall International Trade Performance 3000 2000 1000 2009 - 2010 2010 - 2011 2011 - 2012 -1000 Source: Ministry of National Planning and Economic Development, Myanmar 2012 - 2013 2013 - 2014 (A pr - M ay) - 413.1 2008 - 2009 - 91.9 0
    • By Country & By Products USD Million USD Million Top 5 Export Items 1 2 3 4 5 • Natural Gas • Beans and Pulses • Jade Top 5 Import Items 1 2 3 • Vehicles & Spare Parts • Construction Materials • Iron & Steel • Marine Products • Garment • Petroleum Products 4 5 • Machinery & Spare Parts
    • Foreign Direct Investment 2008 - 2013 Total FDI = USD 27,794 Million 2,500.26 By Country By Sector
    • Myanmar Financial System “Structure & Products”
    • Myanmar Financial Institutions Structure Myanma Economic Bank (MEB) Myanma Investment and Commercial Bank (MICB) Central Bank of Myanmar Myanma Foreign Trade Bank (MFTB) State-owned Banks FX (4) Myanma Agriculture and Development Bank (MADB) Domestic Private Banks FX (19) Semi Private Banks (7) Foreign Representatives (33) Private-owned Banks (12) (15) Source : Central bank of Myanmar & Deloitte System • • Still in an early stage, contributing a mere 0.08% of total GDP. Underdeveloped computerized system; Running on deposit service based.
    • Foreign Currency Exchange Myanmar Currency: Kyat Foreign Currency Exchange: Change system from Dual Exchange Rate (1 USD = 6 MMK) to Managed Float System (1 USD = 800 MMK) on Apr 12 (Before: 7 rates from 6 – 1,200 MMK per 1 USD) Foreign Exchange Certificate (FEC): FEC has NO longer used since end of June 2013 Cross Border Payment: CBM allows to settle in 3 currencies: USD, THB & MMK
    • Retail Banking • Deposit  Current Account: MMK, USD, EUR or SGD  Saving Account: MMK (8% interest rate – Foreign is NOT allowed)  Fixed Account: MMK (8.5-10% interest rate – Foreign is NOT allowed) • Lending  Overdraft (13% interest rate, 1% service charges & 1% commission fees)  Hire Purchase (1% service charges, 30% down & 3-yr progressive rate) • Cards  MPU Card (Debit Card) • Remittance  International Remittance  Worker Remittance
    • Wholesale Banking • Trade Finance  Letter of Credit (L/C): Import and Export  Collection  Remittance  Guarantee: Issuance and Advising • FX Services  Exchange Counter  FX Arrangement (Today ONLY)
    • Investment “Initial Capital Injection & Source of Fund”
    • Investment: Initial Capital Injection Which Financial Institutions are allowed to do? Allowed by DICA Central Bank of Myanmar Myanma Economic Bank (MEB) Myanma Investment and Commercial Bank (MICB) Myanma Foreign Trade Bank (MFTB) State-owned Banks (4) Myanma Agriculture and Development Bank (MADB) Domestic Private Banks (19) Semi Private Banks (7) Foreign Representatives (28) Private-owned Banks (12)
    • Investment: Initial Capital Injection (Who?) Stated-Owned Bank • Myanma Foreign Trade Bank (MFTB) • Myanma Investment & Commercial Bank (MICB) Private Bank Focused on top private banks named: • • • • Kanbawza Bank (KBZ) Asia Green Development Bank (AGD) Co-Operative Bank (CB) Ayeyarwaddy Bank (AYA)
    • Investment: Initial Capital Injection (How?) Myanmar Thailand TH Investor - Submit application for money transfer (USD) - Deal FX Rate & Fee with RM/Dealer TH Bank - Send MT103 to MM Bank stating for initial capital MM Bank - Prepare Credit Advice for Investor to submit with DICA - Put money on central account & transfer to Investor’s account when it is opened TH Investor - Receive Credit Advice & apply with DICA - Open account with the bank as soon as receive temporally Permit to Trade from DICA
    • Investment: Source of Fund Option 1: Domestic Fund Option 2: International Fund Key Fact - Interest rate = 13% - ONLY 1-year term - Need BG from foreign banks - Can NOT do with all local banks Key Fact - Credit from main bank in TH - Need to submit proposal to MIC/ Authorities
    • International Trade “Letter of Credit, Remittance & Bank Guarantee”
    • International Trade: Which Bank? Before 2012, ONLY two state-owned banks: • Myanma Foreign Trade Bank (MFTB) • Myanma Investment & Commercial Bank (MICB) NOW, 18 state-owned & private banks Focused on top private banks named: • Kanbawza Bank (KBZ) • Asia Green Development Bank (AGD) • Co-Operative Bank (CB) • Ayeyarwaddy Bank (AYA) • Myanma Apex Bank (MAB) • Myanma Oriental Bank (MOB) • United Amara Bank (UAB)
    • International Trade: Standard Fee in MM
    • Opportunities for Investors “Which sector would be fit for Thai investors”
    • Opportunities for Investors: Manufacturing Garment & Apparel Consumer Products Processed Agro -Product • Myanmar Foreign Investment Law 2012 - Corporate income tax exemption up to 5 years (from 3 years) - Long lease for land 50 + 10 + 10 years ( from 30 + 15 + 15 years) • Relatively competitive labor cost - Minimum wage is around $58 – 70 per month - Compared with monthly wage of TH@ $300, VN@$112, LA@$100, KH@$68 - Minimum wage bill has passed, awaiting details • Export base to gain market access to India & China and to take advantage of favorable tax scheme i.e. GSP from EU
    • Opportunities for Investors: Services Hotel, Travel, & Tourism Healthcare Telecommunication • “Global Hotspot” for both business and tourism - Number of arrivals reached over 1 million mark last year - Projected to reach 3 million in 2015 • Host of major international events e.g. WEF, SEA Games, ASEAN Summit • Development of Hotel Zone in Yangon, Mandalay, Nay Pyi Taw, Mawlamyine • Quality healthcare is in demand • Major overhaul of telecommunication infrastructure and development: Telenor & Ooredoo - Mobile phone penetration rate is 9%, - Compared to KH@70%, LA@87%, TH@125%
    • Opportunities for Investors: Trading Food & Beverage • • • • • White Goods Construction Materials Growing demand for consumption Changing consumer behavior and lifestyle Positive perception toward Thai brands/products Ongoing infrastructure development projects for both government and private Influx of FDI drives the needs for construction materials
    • Opportunities for Investors: Natural Resources Oil & Gas Power Mining • Untapped exploration fields - 7.8 trillion cubic feet of proven natural gas reserves; worth $75 billion - 30 exploration licenses will be offered, 1Q 2014 • Inadequate electricity capacity - ADB estimates demand will grow 13% per year - Production will need to increase 42% to this year’s demand • Mineral rich including gold, copper, lead, zinc, nickel, tin, antimony, chromites - Awaiting Mining Law, expected improved incentives for investors
    • KASIKORNBANK “AEC Plus Strategy & Yangon Representative Office”
    • KBank – Strategy We aim to be “Asian Bank” We will serve : • Outbound business customer, both Corporate & SME, through out Asia by our well established network and partner banks. • Inbound customer through our strong domestic network. Outbound Inbound
    • KBank – Strategy ASEAN 1 Bank 2 Banks (1 MOU) 2 Banks (1 MOU) 2 Banks (2 MOUs) 1 Banks (1 MOU) 1 Rep 35 Partner Banks with 32 Bilateral MOUs E.ASIA 23 JRBs (23 MOUs) 24 JRBs Under JBIC Scheme 1 Rep 2 Banks (2 MOUs) EU & US 1 Branch 2 Banks (2 MOUs)
    • KBank – Yangon Representative Office
    • KBank – Myanmar Team Chief Representative - Yangon Office Mr. Nuttaphong Visitkitchakarn E-mail: nuttaphong.v@kasikornbank.com Tel: +959 421074478 KASIKORNBANK Yangon Representative Office Senior ASEAN Country Business Manager Ms. Orin Chaturabatara E-mail: orin.c@kasikornbank.com Tel: + 662 5626554 Senior Global Business Advisory Specialist Mr. Ritthiwut Watthanachai E-mail: ritthiwut.w@kasikornbank.com Tel: + 662 562 6899 313/315 U Wisara Road Sanchaung T/S Yangon Union of the Republic of Myanmar Tel: +95 (0) 1 524285, 1 514868 Fax: +95 (0) 1 516713