FMR launches financial services coverage

FMR Research is pleased to announce the launch of the Myanmar Financial Services Monitor, a unique source of business and commercial information on the sector.

Spanning banking, insurance, microfinance, capital markets and mobile money, FMR’s new subscription-based service tracks one of the country's highest-potential industries, and one undergoing rapid change.

The Myanmar Financial Services Monitor features weekly reports with news and analysis, plus detailed company profiles, a data library and other resources. It is researched and published by FMR’s team in Yangon, and adds to our existing coverage across energy and power, real estate and construction, and transport infrastructure.

To mark the launch, FMR hosted a financial services breakfast event last month at the Yangon Stock Exchange (YSX) in partnership with the British Chamber of Commerce in Myanmar and Baker McKenzie law firm.

It featured a panel discussion covering a wide range of issues, with participants comprising:

• U Myo Min Thu - AYA Myanmar Insurance
• Daw Tin May Oo - Member, Securities Exchange Commission Myanmar
• Hal Bosher - Yoma Bank
• M Daniels - Baker McKenzie

FMR has also published a detailed, 100+ page report on the financial services sector, which is available to download free of charge through this link

Key findings from the report include the following:

Banking

Myanmar’s banks are busy adapting to the country’s economic transformation. The largest lenders have upgraded their core banking systems, mobile and online banking has become commonplace, and hundreds of thousands of credit and debit cards have been issued. After years of being required to lend only against strict collateral rules, banks are now experimenting with lending against cash flows and receivables.

Some lenders have seen deposits rise more than 20% year-on-year, and there is huge growth potential given that around 80% of the population is estimated to be unbanked.

Insurance

Local insurers remain trapped in a strict regulatory regime that requires them to offer the same suite of products at exactly the same rate.

Foreign insurers, meanwhile, are still barred from operating. But the regulator is in the process of deciding the terms on which foreign firms will be allowed to enter the market. Local firms are hoping to soon be allowed to form joint-ventures with foreign partners and at long last operate in market where they can design their own products and premium rates.

Many players see significant change in the insurance market in the years ahead, given the still nascent structure of the industry.

Microfinance

MFIs are hopeful that reforms in the banking sector will help solve one of their biggest problems — access to capital. New regulations in 2016 lifted caps on MFIs taking voluntary deposits from customers, but they remained barred from taking deposits from the general public.

Local banks, with limited expertise in microfinance and a preference for land as collateral, have been reluctant to lend to the sector.

But MFIs continue to expand, and demand for credit is still far in excess of what the sector can provide. Foreign investors are also looking at the microfinance sector, potentially as an alternative to conventional banking.

Capital markets

More than two years after it was established the Yangon Stock Exchange remains a lonely place with only five listings and minimal trading volumes.

The bond market consists solely of government Treasury auctions, which are open only to banks and sold at unappetising rates. But the YSX has renewed efforts to attract public companies to consider listing, and the Securities and Exchange Commission of Myanmar is working on a framework for municipal and corporate bonds.

This is likely to take time to materialise, but would offer a new investment product for institutional and retail investors, a new tradable product for the YSX and a source of funds for companies struggling to access bank loans.

About FMR

FMR is Myanmar’s leading provider of industry-specific business information, and serves a wide range of local and international clients.

Established in 2014, the company offers four subscription-based services that are researched and produced by a team of local and international staff based full-time in Yangon.

Our current services comprise:

• Myanmar Financial Services Monitor
• Myanmar Real Estate and Construction Monitor
• Myanmar Energy Monitor
• Myanmar Transport Infrastructure Monitor

Each contains a range of up-to-date, accurate and detailed information including project databases, news and analysis, data, tenders and company profiles.

FMR’s services enable companies and other organisations to identify business opportunities, track the industry, find partners or suppliers, conduct market research and follow developments.

We also offer customised research and advisory services for clients seeking in-depth reports to support a specific project or investment.

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