In a colonial building in Myanmar's largest city, a large screen showed stock prices for a handful of companies. Four people, perhaps tourists, perhaps investors, shuffled around the floor. The clock struck 11. Suddenly the prices changed. Then, in an instant, all the people were gone.
That was just another day at Asia's tiniest bourse, the Yangon Stock Exchange (YSX). Home to only five companies, it updates prices just four times a day. And those are the high points. The rest of the time, little happens at all.
But, said Thet Htun Oo, a senior official at the exchange, that might just be about to change.
Last year, Myanmar passed a new Companies Law that says foreign investors can own as much as 35 per cent of local firms.
That, potentially, has great significance for the stock exchange. Until now, only domestic investors were allowed to trade. But soon, it should be possible for foreigners to participate too. All that is required is for the securities regulator to give the okay. Then, in two stages, the bourse will welcome foreigners based in Myanmar, followed by overseas institutional investors. That, said Thet Htun Oo, is exactly what it needs to take off.
Asked when this will happen, he says some time this year. The fledgling exchange will be the last in the region to open up to overseas investors, following in the footsteps of Laos and Cambodia, which did so in the last decade.
WANTED: FOREIGN INVESTORS
"We need foreign investors," Thet Htun Oo said. Current demand is very low as the people of Myanmar lack investing knowledge, he said. And the small investor base does little to motivate local companies to spend the time and money it takes to list, and to take on more onerous corporate governance requirements.
Myanmar's securities regulator has confirmed the expected timeline. Retail and institutional investors can be expected by year-end, said Htay Chun, a member of the Securities and Exchange Commission of Myanmar. The commission will notify the exchange that it can go ahead with the process to welcome foreigners within two months of "getting the approval of higher authority", he added. Specific instructions to the YSX, securities houses and listed companies will also be issued.
Thet Htun Oo estimates there are 50 to 60 companies in Myanmar that are performing well and could list on the exchange. Some have already started preparing with local securities houses. He hopes there will be from 20 to 30 companies listed in the next five years.
But the truth is, with 26 per cent of the more than 53 million population still living in poverty and less than one-third of households having access to electricity, Myanmar has bigger things to worry about.
And the country's progress has suffered as a violent military-led crackdown of Rohingya Muslims in the Rakhine state continues to receive widespread criticism and has largely kept Western companies away.
Still, Mr Masaharu Harada, a director on the exchange's board, said he is confident that foreign investors will still be interested in the local stock market due to Myanmar's high growth potential. Institutional investors, in particular, are more likely to take risks in exchange for long-term growth, Mr Harada, one of two representatives who hails from Daiwa Securities Group, said in Yangon.
Japan's second-largest brokerage worked for two decades to help set up the exchange before it was incorporated in 2015. It owns a joint 49 per cent stake in it, along with Japan Exchange Group, with Myanmar's Ministry of Finance holding the remainder.
Foreign appetite for developing-nation stocks can already be seen in neighbouring Vietnam. There, the equity market has surged more than sevenfold since 2012, beating all Asian peers and reaching about US$190 billion (S$257 billion) in value (compared with about US$335 million in Myanmar), thanks to an economy that has been growing at an annual rate surpassing 5 per cent since 2000.
Just last year, luxury developer Vinhomes JSC raised as much as US$1.4 billion in Vietnam's largest initial public offering on record, while Vietnam Technological & Commercial Joint Stock Bank raised just under US$1 billion. With an average daily trading value of US$156 million, liquidity in Vietnam dwarfs that of Myanmar at US$33,090.
To Ms Aisa Ogoshi, who manages US$3 billion in Asia-Pacific equities at JPMorgan Asset Management, the success of Vietnam has piqued interest in other frontier markets.
"We would definitely be interested" in investing in Myanmar, she said by phone. But regional fund managers such as herself need to be comfortable with the access to management as well as other standards in frontier markets, she added.
In Yangon, First Myanmar Investment Public (FMI), the listed vehicle of local tycoon Serge Pun's conglomerate, is keen to welcome foreign ownership. Tun Tun, the chief operating officer of FMI, which was the first company to list on the YSX in 2016, said he has spoken to the stock exchange about how that could become possible. The exchange has yet to respond, he said.
On the prospects of it happening this year, Tun Tun said: "I have my fingers crossed and we'll see how it goes."