PwC Myanmar Weekly Business Intelligence

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PwC Myanmar WeeklyBusiness IntelligenceIssue No. 25031 January 2021

Financial and BusinessInfrastructurePolicy and RegulationTender OpportunitiesMIC Permitted ProjectsUpcoming EventsDisclaimerPricewaterhouseCoopers Myanmar Co., Ltd helps organisations and individuals create the value they’re looking for. We’re a member of the PwC network of firms in 157 countrieswith more than 276,000 people who are committed to delivering quality in assurance, advisory and tax services. Tell us what matters to you and find out more by visiting us atwww.pwc.com/mm.This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors. 2021 PricewaterhouseCoopers Myanmar Co., Ltd, a company duly established and operating under the laws of Myanmar. All rights reserved. PwC refers to the Myanmarmember firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details.The information contained in this publication is for general guidance on matters of interest only and is not meant to be comprehensive. The application and impact of laws can varywidely based on the specific facts involved. Before taking any action, please ensure that you obtain advice specific to your circumstances from your usual PricewaterhouseCoopersMyanmar Co., Ltd client service team or your other tax advisers.31 January 2021PwCPwC Myanmar Weekly Business Intelligence2

PwC Myanmar Weekly Business IntelligenceIssue - 250, 31 Jan 2021Financial andBusinessInfrastructurePolicy andRegulationTenderOpportunitiesHighlights “Myanmar will start vaccinating the public on February 5, said the Ministry of Health and Sports.Elders above the age of 65, individuals with underlying health conditions and those residing in highrisk townships will be prioritised for vaccination.”“Myanmar is calling for Expression of Interests (EOI) for life insurance and general insurancelicenses from citizen-owned firms. The government will choose either one or two companies fromthe applicants to award the licenses to, with the aim of further developing the country's insurancesector”“A Chinese company has invited proposals by Feb. 8 to provide consultancy services and fieldinvestigations environmental and social impact assessments of its ambitious Kyaukphyu deep-seaport project in Rakhine State. The move brings the Belt and Road Initiative project – which wouldopen Chinese access to the Indian Ocean – one step closer to implementation.”Financial and Business Myanmar govt invites EOI for life insurance, general insurance licences Prudential, Yoma Bank cleared to offer bancassurance in Myanmar Chinese group proposes major garment manufacturing hub in Northern Myanmar Myanmar sees reduced trade for first quarter of 2020-21 Investors expect growth to accelerate in Myanmar over next three ureInfrastructureTransport Chinese firm opens assessment tender for strategic deep-sea port in Western MyanmarEnergy Myanmar approves new investments in energy and other sectors Whole of Myanmar to be powered by national grid in 2030 Minister calls for extensive use of CNG for green energy, economy in futureReal Estate Myanmar bets on industrial zones to draw investments, create jobs The inside story of Thailand and Myanmar’s troubled Dawei mega-project KB Bank to focus on Myanmar’s construction sectorWaste and Water 58 Mandalay villages likely to experience water shortageOther Infra Mon State calls for investors in the fisheries sectorPolicy and RegulationMy Myanmar to start vaccination of public on February 5 Tatmadaw eases pressure, but concerns remain ahead of parliament meeting Myanmar enters 2021 with more friends than foes Myanmar’s Supreme Court hears election misconduct claims against president, Suu Kyi 4th wave of COVID cash assistance in Yangon Region beginsPwC31 January 20213

Financial and Business31 January 20214

Financial and BusinessFinancial and BusinessInfrastructurePolicy and RegulationTender OpportunitiesMIC Permitted ProjectsUpcoming EventsMyanmar govt invites EOI for life insurance, generalinsurance licencesMyanmar aviation sector expected to becomeprofitable, but more pain ahead first27 Jan 202127 Jan 2020Myanmar is calling for Expression of Interests(EOI) for life insurance and general insurancelicenses from citizen-owned firms.The government will choose either one or twocompanies from the applicants to award thelicenses to, with the aim of further developing thecountry's insurance sector, according to theInsurance Business Regulatory Board under theMinistry of Planning, Finance and Industry via astatement issued on January 25.11 out of 12 companies were granted insurancelicenses in 2013. “Among the 11 companies thatwere granted licenses, eight of them providegeneral insurance and the remaining threecompanies are in the life insurance business.There was one company that was not granted apermit,” said U Khin Maung Win, generalmanager of Myanmar Insurance.Now, the authorities are inviting other companiesto apply for the license to operate. Either one ortwo companies will be awarded insurancelicenses in line with the criteria specified by theFinancial Regulatory Department. It specifiedthat either one company will be selected toprovide both general insurance and life insuranceservices or two companies will be chosen toprovide a service each.Myanmar Insurance recorded a total income ofK86 billion in the 2019-20 fiscal year. There arecurrently 24 citizen owned insurance firms andforeign insurance firms in the country, translatingto a total investment value of K67.3 billion andUS 152.1 million, according to statistics by theMyanmar Investment Commission.Source: Myanmar tmlMyanmar’s aviation industry is betting on a moreprofitable future with the number of airlines nowreduced to half compared to 2017 and demandfor domestic air travel expected to catch up withsupply. However, they will have to swallow morelosses in the short term before things get better.There are currently five airlines in Myanmar,down from ten three years ago. But even thoughthere are fewer players now in the market, thevolume of passengers flying domestic remainsbelow three million, according to governmentdata.At those levels, demand is not sufficient to coverthe industry’s losses, U Kyaw Nyein, CEO ofGolden Myanmar Airlines (GMA), told TheMyanmar Times in a recent interview.But profitability is possible in the years ahead,making it a good time for the remaining airlines toaccelerate their plans for expansion to capitaliseon future demand, according to a 2019 report bythe Centre for Asia Pacific Aviation.Last year, GMA took delivery of a new aircraft,taking its current fleet of ATR-72s to three. “Withthe additional seats, we can now fly dailycompared to alternate days before. We will alsoextend our destinations to include more flights toDawei and Kaw Thaung, which could be potentialtourist attractions in the future,” U Kyaw Nyein.Air KBZ has also been expanding. Last year, itupgraded its fleet of planes and announced newdestinations to Dawei , Kaw Thaung , Myeik,Sittwe, Kyaingtong, Hkamti and Loikaw. its sisterairline, Myanmar Airways International, added anew Airbus A319 to its fleet, expanding itscapacity by 144 passengers.Tanes Kumar, commercial director for Air KBZ,said even though the new routes are not yetprofitable, the main aim of adding newdestinations is to expand the airline’s networkand connectivity. “This gives passengers moreoptions and allows employees to learn new skillsfor more expansion in the future,” he said.Source: Myanmar first.html31 January 2021PwCPwC Myanmar Weekly Business Intelligence5

Financial and BusinessFinancial and BusinessPrudential, Yoma Bank cleared to offer bancassurancein Myanmar28 Jan 2021Prudential Myanmar Life Insurance and YomaBank announced an exclusive partnership forBancassurance services on January 27 afterreceiving regulatory approval from the Myanmargovernment.As part of the bancassurance partnership, YomaBank will distribute Prudential Myanmar’ssavings and financial protection products at 25Yoma Bank branches in Yangon, Mandalay,Monywa and Pyinmana from January 28onwards.Nationwide bancassurance rollout across allYoma Bank branches will take place from July toDecember.Prudential Myanmar was ranted licences to offerlife insurance products and solutions in Myanmarfrom the Ministry of Planning and Finance inNovember 19.In March last year, the Insurance BusinessRegulatory Board (IBRB) issued a directiveallowing banks and microfinance institutions tooperate as agents selling insurance products.In August 2020, Capital Taiyo Life Insurance andMyanmar Citizens Bank announced that they willcooperate to provide life insurance products inMyanmar.Three months later AYA Bank, AYA SOMPOInsurance and AIA Myanmar announced theirstrategic bancassurance partnership to enablelife, health and general insurance solutions fromAYA SOMPO Insurance and AIA Myanmar to beoffered across AYA Bank’s branch networkthroughout the country. The announcementfollowed soon after AYA Bank, AYA SOMPOInsurance and AIA Myanmar Insurance receivedministry approval to launch the bancassurancechannel through a corporate agency license.Bancassurance is expected to help insuranceproviders extend the reach of their products.According to research commissioned by KBZMS, the total bancassurance channel inMyanmar could grow to K2 trillion [US 1.3 billion]if applied to the total projected insurance marketin Myanmar by 2029.Source: Myanmar ructurePolicy and RegulationTender OpportunitiesMIC Permitted ProjectsUpcoming EventsChinese group proposes major garment manufacturinghub in Northern Myanmar26 Jan 2021A Chinese textile group has submitted a ring cluster project in a major town inSagaing Region, an economic hub for UpperMyanmar, at an expected cost of more thanUS 370 million (493.49 billion kyats).The Ministry of Planning, Finance and Industry(MOPFI) said China’s Jiangsu province-basedEastern Development International (Myanmar)Co. Ltd. (Dongzhan Textile Group – China) madean unsolicited proposal for the project in Sagaingcity, which if accepted would be the first textilebased industrial cluster to be developed in thecountry.According to the government’s investmentagency, the Directorate of Investment andCompany Administration (DICA), EasternDevelopment International (Myanmar) Co. Ltd.registered in 2018 as a manufacturer of wearingapparel. Both directors of the company areChinese citizens and it is wholly owned byforeign citizens.Textile manufacturing is one of the leadingindustries in Sagaing city, and the region is hometo a number of the country’s major state-ownedtextile factories. Sagaing Region borders Indiaand its economy is largely dependent on tradewith the country.The Myanmar Project Bank said the proposedproject will comprise two phases at an estimatedtotal cost of 371.40 million on 356.47 acres inSagaing owned by No. 3 Heavy IndustriesEnterprise, a state-owned company. It willinvolve construction of a total of 17 garmentrelated factories, an international textile-relatedmarket at a ginning factory in Sagaing, and otherrelated infrastructures.According to the Project Bank, construction isexpected to be complete within 10 years. Phase1 will include construction of 12 new garmentrelated factories, knitting fabric factories, dyeingand printing factories, down and feather factoriesand residential buildings for employees.Phase 2 will include construction of five garmentrelated factories, an embroidery factory, a cartonfactory, a polyester wadding factory and theinternational textile related market. Under theproposal, the industrial cluster would be linkedwith other textile factories across SagaingRegion.Source: The n-northern-myanmar.html31 January 2021PwCPwC Myanmar Weekly Business Intelligence6

Financial and BusinessFinancial and BusinessInfrastructurePolicy and RegulationTender OpportunitiesMIC Permitted ProjectsUpcoming EventsMyanmar sees reduced trade for first quarter of 202021Investors expect growth to accelerate in Myanmar overnext three years27 Jan 202126 Jan 2021Myanmar recorded US 8.9 billion in total trade inthe first quarter of fiscal 2020-21, 2.5 billion lessthan the same period of last year.The fall was attributed to reduced exports ofnatural gas, gems, garment products and fisheryand other animal products due to the COVID-19outbreak.Imports also saw a decline with the countrybuying less raw materials for Cut-Make-Pack(CMP) products, construction materials, fuel andother crude oil products.The amount of trading transactions from October1 to January 25 (beginning of this fiscal year) is 8.9 billion in total. Export volume is 1.1 billionless than that of last year and import is down 1.4 billion as well. The whole trade sector saw areduction of 2.5 billion compared to the sameperiod of the 2019-2020 fiscal year, said U KhinMaung Lwin, assistant secretary from theMinistry of Commerce.Myanmar, however, saw an increase inagricultural exports despite reports of logisticsand transportation issues.“Although total trade volume is less, the exportvolume for agricultural products is 4 millionmore than last year. The export of vegetables,rice, and broken rice has increased”, he said,adding that export of other agricultural productslike watermelon, chili, peanuts and maize grainsare also on the rise.The Ministry of Commerce has projectedMyanmar trade to hit 34.7 billion for the 2020-21fiscal year, according to earlier reports.Exports are forecast to total 16.2 billion whileimports are expected to hit 18.5 billion, resultingin a trade deficit of 2.3 billion for the period.Source: Myanmar ced-trade-first-quarter-2020-21.htmlInvestors expect business to return to normal inMyanmar by the third quarter of this year. Manyalso reckon that the technology, media andtelecoms (TMT) sector would see the mostinvestments or merger and acquisition activity inthe next two years, according to polls taken at aconference held online by Ascent CapitalPartners recently.Indeed, the Myanmar economy is expected torecover and reach growth levels of as much as 7percent this year, U Thaung Tun, Union Ministerfor Investment and Foreign Economic Relations,said during the conference.U Thaung Tun said recovery will be backed bythe government’s Myanmar Economic Recoveryand Reform Plan (MERP), which will prioritisesectors like manufacturing and services in theyear ahead. Measures such as civil servicereforms and digital transformation will also beimplemented by the government.Stanley Kyaw Khaing, managing partner ofAscent Capital, said the firm’s three-year outlookfor Myanmar is one of “cautious optimism.Myanmar’s economy and business environmentare still severely impacted by the COVID-19pandemic, and it is unclear at this moment whenfull recovery will take place,” he said.He added though, that Ascent Capital focuses onlonger timeframes and that government initiativeslike the MERP “are important catalysts to drivegrowth in the economy over the next three yearsand beyond.”“As a Myanmar-focused investor with long-termplans in the country, we certainly intend to raisefuture funds but do not have the immediate needto do so,” he said.In terms of exiting investments, “this woulddepend on the opportunities that presentthemselves at the right time. But our generaloutlook is for the long term, in the next seven toten years,” he added.Ascent Capital is a private equity firm registeredwith the Monetary Authority of Singapore. Thefirm manages a Myanmar-focused investmentfund which it says is the largest Myanmarfocused investment fund globally.The fund, which prioritises the consumer,education, healthcare, financial services, logisticsand TMT sectors, closed in October last yearwith US 88 million in capital commitments.Source: Myanmar l31 January 2021PwCPwC Myanmar Weekly Business Intelligence7

Infrastructure31 January 20218

TransportInfrastructureFinancial and BusinessInfrastructurePolicy and RegulationTender OpportunitiesMIC Permitted ProjectsUpcoming EventsChinese firm opens assessment tender for strategicdeep-sea port in Western MyanmarMyanmar aviation sector expected to becomeprofitable, but more pain ahead first25 Jan 202127 Jan 2020A Chinese company has invited proposals byFeb. 8 to provide consultancy services and fieldinvestigations environmental and social impactassessments of its ambitious Kyaukphyu deepsea port project in Rakhine State.The move brings the Belt and Road Initiativeproject – which would open Chinese access tothe Indian Ocean – one step closer toimplementation.The project is a crucial aspect of the Chinabacked Kyaukphyu Special Economic Zone(SEZ) Deep Sea Port Project, which is part of theChina-Myanmar Economic Corridor.The SEZ is expected to allow Chinese trade tobypass the congested Strait of Malacca nearSingapore while boosting development inlandlocked Yunnan Province.Chinese consortium CITIC Myanmar PortInvestment Limited announced on Monday that itwould hire a third party to provide “scoping,investigation and reporting” of the project’sassessment process. The move aims to obtain“environmental compliance certificates” for theproject.The company said it would follow Myanmar’senvironmental procedures and other laws.In August, Myanmar approved the registration ofKyaukphyu Special Economic Zone DeepSeaport Co. Ltd, a joint venture between CITICandMyanmar’sgovernment-backed SEZManagement Committee, to develop the project.The parties have reportedly already entered aconcession agreement to design, build, finance,operate, maintain and transfer the port. It willalso include construction of terminals on theislands of Yanbye and Mede, a bridgeconnecting the islands and a 15km road to theSEZ industrial park.In 2019, CITIC hired the Canadian firm, Hatch, tosuperviseandrecruitconsultantstoenvironmentally assess the port project. It hasalso submitted a project proposal to the Ministryof Natural Resources and EnvironmentalProtection which early last year said the projectrequired environmental and social assessmentsunder Myanmar’s law.A framework agreement for the long-delayedproject was signed between the managementcommittee and the CITIC in November 2018.Source: The htmlMyanmar’s aviation industry is betting on a moreprofitable future with the number of airlines nowreduced to half compared to 2017 and demandfor domestic air travel expected to catch up withsupply. However, they will have to swallow morelosses in the short term before things get better.There are currently five airlines in Myanmar,down from ten three years ago. But even thoughthere are fewer players now in the market, thevolume of passengers flying domestic remainsbelow three million, according to governmentdata.At those levels, demand is not sufficient to coverthe industry’s losses, U Kyaw Nyein, CEO ofGolden Myanmar Airlines (GMA), told TheMyanmar Times in a recent interview.But profitability is possible in the years ahead,making it a good time for the remaining airlines toaccelerate their plans for expansion to capitaliseon future demand, according to a 2019 report bythe Centre for Asia Pacific Aviation.Last year, GMA took delivery of a new aircraft,taking its curr

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