PwC MyanmarWeekly Business Intelligence

Issue 17310 Aug 2019

www.pwc.com/mm

PwC | August 2019

Disclaimer

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PwC | August 2019

1. Weekly Key Financial & Business News

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PwC | August 2019

Weekly Key Financial & Business NewsHeadlines

Meeting held with new Chinese ambassador on cross-border trade

Change of plans could be a setback for insurance market

Higher revenue collection reported by the IRD

What you need to know about choosing the right franchise in Myanmar

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The many battlefronts of Grab versus Gojek in Southeast Asia

PwC | August 2019

Weekly Key Financial & Business NewsHeadlines

Hotels in Myanmar’s Capital Struggling to Survive

Japanese Firms to Push Growth in Myanmar Insurance Market

Myanmar’s very own satellite now in orbit

Auditor says country’s foreign debt tops US$10bil

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UN team meets locals to discuss issues with Tanintharyi conservation project

PwC | August 2019 6

Change of plans could be a setback for insurance market

The local insurance industry may have been dealta setback after negotiations between several localand foreign insurers were reported to havebroken down.According to a report by Nikkei, which citedinsiders, local insurers decided to pull out of talkswith Thailand’s Muang Thai Insurance andMuang Thai Life Assurance, and South Korea’sDB Insurance, after learning that they were onlyallowed to set up the joint ventures by buyingnewly issued shares of local insurers instead ofexisting shares, as previously communicated.The Nikkei cited an unnamed industry insiderwho said that the local insurers were morereluctant about setting up the partnerships afterlearning about the new ruling, which was madeknown at the last minute by the government.According to the Nikkei, up until April, theunderstanding was that local insurers could sellexisting shares to form these partnerships.It was only last Friday that the government hadissued an announcement on the furtherliberalisation of the local insurance market bygiving approval for six foreign insurers to form

partnerships with local insurers. In April, anannouncement was made allowing five foreign lifeinsurers to set up wholly-owned units in thecountry.Foreign aid agencies and business lobby groupswere supportive of the government’s latestannouncement on Friday, with the US Agency forInternational Development (USAID) releasingastatement dated August 2 supporting Myanmar’sinsurance industry reforms.USAID said a fully competitive insurance marketcan improve the lives of the people and generatemore high-quality jobs. Insurers can also be asource of long-term financing by investing ingovernment bonds that can then be used to payfor large public-infrastructure projects.“At USAID, we believe that private enterprise isthe single most powerful force for lifting lives,strengthening communities, and accelerating self-reliance,’’ USAID Mission Director Teresa McGhiesaid.Source: Myanmar Timeshttps://www.mmtimes.com/news/change-plans-could-be-setback-insurance-market.html

NewspapersMyanmar Times

05 Aug 2019

PwC | August 2019 7

Meeting held with new Chinese ambassador on cross-border trade

Discussions were held between Myanmar’sMinister of Commerce U Than Myint and China’snewly appointed ambassador, Chen Hai, onAugust 1 to expedite cross-border trade andpromotion of trade and investment.U Than Myint said discussions centered on tradefacilitation, including for more marine andagriculture exports, as well as earlyimplementation of the border trade zone. Theofficials also agreed to forge closer people-to-people, government-to-government and business-to-business ties.U Than Myint said besides the Muse-Shweli-KyalGaung zone in northern Myanmar, threeproposed areas in China are ready for cross-border trade as infrastructure has already beenset up.This comes after the Chief Ministers from Kachinand Shan states met with U Than Myint recentlyto discuss their part in the implementation of thecross-border trade zone.U Than Myint said to implement the cross-bordertrade zone on the Myanmar side, expressions ofinterest and negotiations on land use will be

called for. “The discussion on land-use anddemarcation of the border is important and thenegotiations should include permission for landuse and transportation matters,” he said.He noted that special attention will be paid to notaffect the towns, villages and local culture. “Landcompensation and land replacement programmeswill be managed by the respective localauthorities so as to reduce the impact onagriculture or housing near the cross-border tradezone,” U Than Myint said.China-Myanmar Border Economic CooperationZones (BECZ) have been identified in areas suchas Muse, Chin Shwe Haw and Kan Pite Tee withwarehouses for both exports and imports. Muse(Ho Saung) – Kyal Khaung has been earmarkedas the core zone, with Kyu Koke (Pang Hseng) –Wantain-Nwan Yin (Kyin San Kyawt) – Mant Man(Shwe Li) as export product manufacturingprocessing and warehouse areas.Source: Myanmar Timeshttps://www.mmtimes.com/news/meeting-held-new-chinese-ambassador-cross-border-trade.html

NewspapersMyanmar Times

05 Aug 2019

PwC | August 2019 8

Higher revenue collection reported by the IRD

The Inland Revenue Department (IRD) hascollected K4.9 trillion in revenue across fivecategories of taxes from October 2018 to June2019.According to the IRD, the amount collected wasmore than the amount collected in thecorresponding period of last year. Four-fifths ofthe amount collected this year came from incometax, commercial tax, special commodities tax,court fees and stamp duties as well as the AungBar Lay Lottery tax.An IRD list showed that revenue from income taxwas K243 billion, special commodities taxcollection came in at K42 billion, the lottery taxcontributed K31 billion, commercial taxcontributed K16 billion while court fees andstamp duties contributed K5.3 billion comparedto the corresponding period of last year. Allcategories except court fees and stamp duties washigher than the corresponding period of last year.The IRD noted that action has been taken againstshops that failed to put the tax stamp on mobilephones and mobile phone accessories. There were98 cases with fines totaling K10.9 million while

whistle blowers were awarded K164 million intotal from 11 cases. – Translated

Source: Myanmar Timeshttps://www.mmtimes.com/news/higher-revenue-collection-reported-ird.html

NewspapersMyanmar Times

06 Aug 2019

PwC | August 2019 9

What you need to know about choosing the right franchise in Myanmar

Local interest in franchising has grown on theback of the rising number of international retailbrands entering Myanmar. While the businesscan be rewarding and lucrative, it is important tohave a complete understanding of the franchiseconcept and what you’re signing up for.Franchising is a business agreement under whicha company that already has a successful productor service (the franchisor) enters into acontinuing contractual relationship with anothercompany (franchisee) to operate under thefranchisors’ trade name.For the franchisee, it’s important to be aware ofthe fees involved in franchising. Under a franchiseagreement, the franchisee typically pays an up-front setup, or franchise fee, which is anestimated percentage of monthly revenue. Thereare also royalty fees, marketing fees andoccasionally a training fee involved.In return, the franchisor provides the businessmodel, permits the use of its brand and alsoprovides operational support. However, thefranchisee assumes the full financial andoperational responsibility for running the

business, while possibly having to buy specificingredients from the franchisor. Under someagreements, the franchisee is also expected tomeet operational standards set by the franchisor.In other words, in addition to a buying the right touse a well-known brand name, franchising is amethod of starting a business which minimisesrisk by using a tested business formula developedby the franchisor.Hence, if you are planning to develop your ownbusiness but want to minimise start-up mistakesthat new entrepreneurs typically make whenhitting the ground running, buying into afranchise system may be the option to consider.However, purchasing a franchise model doesn’tguarantee that your business will be a success. Itis still important that you take time to select theright one. Here are six tips to be aware of whenchoosing a franchise:Align your business and personal interestSource: Myanmar Timeshttps://www.mmtimes.com/news/what-you-need-know-about-choosing-right-franchise-myanmar.html

NewspapersMyanmar Times

06 Aug 2019

PwC | August 2019 10

The many battlefronts of Grab versus Gojek in Southeast Asia

The term ‘super app’ became a popular buzzwordin Southeast Asia after Grab and Gojek, theregion’s two biggest tech startups, began usingthe term to describe themselves.It’s meant to signal their ambition to become theone-stop app to offer services and solutions thathelp people address their daily needs–fromtransportation to food, to entertainment, similarto the role WeChat plays in China.Both startups were known as ride-hailingcompanies even though they started fromdifferent ends of the spectrum.Grab began as a taxi aggregator before addingprivate cars, taking a leaf from the Uber model. Itlater added motorcycle taxis, sensing this wouldbe suitable in some Southeast Asian cities.Gojek pioneered the use of motorcycle taxis forpersonal transportation and deliveries on its app,and later added cars and taxis.Today, the two platforms have grown well beyondtheir original range of offerings to cover servicesincluding lifestyle, entertainment, and financialneeds.As they are expanding regionally and offer

localized versions of their app in each market,Gojek and Grab may work differently dependingon where you are.Here’s an attempt to compare Grab and Gojek’sservices across Southeast Asia, and to take note ofwhat this reveals about their expansion strategies.TransportationGrab, with its roots as a taxi aggregator, had setits sights on being a regional player from the startand currently operates in eight Southeast Asianmarkets, namely Singapore, Indonesia, Malaysia,Thailand, Vietnam, Philippines, Myanmar, andCambodia. The basic services that are available inall markets are GrabTaxi and GrabCar, while thetwo-wheel option GrabBike can only be found inthe countries where motorcycle is a populartransport option like Indonesia, Thailand,Vietnam, and Cambodia.Grab is experimental when it comes totransportation solutions.Source: Global New Light of Myanmarhttps://consult-myanmar.com/2019/08/07/the-many-battlefronts-of-grab-versus-gojek-in-southeast-asia/

NewspapersGlobal New Light of Myanmar

07 Aug 2019

PwC | August 2019 11

Japanese Firms to Push Growth in Myanmar Insurance Market

YANGON—With Myanmar’s Ministry of Planningand Finance giving the green light to six jointventures between local and foreign insurancecompanies at the end of July, Japanese insurancefirms are poised to dominate the country’sinsurance market.Five of the six foreign insurance companies nowpermitted to provide life and general insuranceservices together with local companies are fromJapan; the sixth is from Thailand.Japan’s Taiyo Life and Nippon Life and Thailand’sThai Life will partner with local companiesCapital Insurance, Grand Guardian Insurance andCitizen Business to provide life insurance.In general insurance services, Japan’s SompoJapan Nipponkoa, Tokia Marine and Nichida Fire,and Mitsui Sumitomo will partner with AyaMyanmar Insurance, IKBZ and Grand GuardianInsurance.“Their entrance will strengthen the insurancemarket. There will not be changes overnight, butit is fair to say that the industry is developing inthe right direction,” U Maung Maung Thein, whohad served in Myanma Insurance for more than

20 years, told The Irrawaddy.“I say there will not be immediate improvementsbecause public knowledge about insurance isquite limited here. The number of policyholders islow in Myanmar. Only well-off people can buyinsurance here,” he said.Because Japanese insurance companies havealready had representative offices open inMyanmar for some time, and because of theirtechnology and practical expertise, their entrancewill contribute more to Myanmar’s insurancemarket than will insurance firms from othercountries, he said.More freedom for the private sectorOne official from a private insurance companysuggested to The Irrawaddy on condition ofanonymity that the government should relax rulesand regulations so that private insurancecompanies can introduce new products andoperate more freely.Source: The Irrawaddyhttps://www.irrawaddy.com/news/burma/japanese-firms-push-growth-myanmar-insurance-market.html

NewspapersThe Irrawaddy

08 Aug 2019

PwC | August 2019 12

Hotels in Myanmar’s Capital Struggling to Survive

NAYPYITAW—Hotels in Myanmar’sadministrative capital of Naypyitaw are strugglingto survive, hoteliers told The Irrawaddy.Of 65 hotels in total, only 48 are currentlyoperating, with most suffering annual losses, theysay.A price war has ensued as Naypyitaw hotelierscompete for a limited customer base, Chairman ofthe Myanmar Hoteliers Association (Naypyitaw)U Than Htut told The Irrawaddy.Unlike other countries, where hotels raise priceswhen their cities host events, Naypyitaw hotelsare asked to offer discounts when events are heldin the capital; hoteliers have no choice but tocomply when asked in order to survive, lamentedU Than Htut.“We are asked to reduce prices when there areevents. We are asked to provide lunch andsometimes dinner. Under such circumstances, itis even difficult for us to cover operating costs. Ifthis situation goes on, it will be difficult for us tosustain in the long-run,” he said.In the Naypyitaw Hotel Zone, ‘doing fine’generally means incurring small losses, said Ko

Naung Naung, the manager of a 70-roomNaypyitaw hotel.Losses range from 5-10 million kyats or more permonth, depending on the size of hotel, he said.“There are only seven or eight hotels that aredoing well. They can host events. Their losses arelow. For example, our hotel has 70 rooms and theoccupancy rate is just ten rooms. On average, weloss 4 to 5 million kyats a month,” he told TheIrrawaddy.“The losses grow heavier as the hotel size getsbigger. For example, we have reduced watts andthe electricity bills only cost us around 2 millionkyats per month. But electricity bills cost as muchas 10 million kyats for big hotels, and besideselectricity bills, hotels have to incur staff salariesand allowances and internet service charges,” heexplained.

Source: The Irrawaddyhttps://www.irrawaddy.com/business/hotels-myanmars-capital-struggling-survive.html

NewspapersThe Irrawaddy

08 Aug 2019

PwC | August 2019 13

Myanmar’s very own satellite now in orbit

Myanmar’s very own satellite system wassuccessfully launched into orbit on Wednesdayafter two years of planning. The nation will seeimproved and faster communications as a result,primarily in far-flung areas.Arianespace, the French service provider, wasable to successfully launch two satellites – theIntelsat 39/ Myanmar Sat 2 and EDRS-C, fromthe Guiana Space Center, Europe’s spaceport inFrench Guiana, a French territory in SouthAmerica.Intelsat 39's, manufactured in MaxarTechnologies, steerable beams will offeradditional flexibility, enabling customers torapidly reposition their service to respond tochanging application or geographic requirements,the company said in a statement.The Ministry of Transport and Communications(MOTC) will receive C- and Ku-band servicesfrom the satellite in the fourth quarter of 2019,which will assist in advancing its goal to ensurethat 95 percent of the population could utilisebroadband connectivity by 2022, said TerryBleakley, Intelsat’s regional vice president, Asia

Pacific.By assimilating the satellite services intoMyanmar’s mobile networks, MOTC will be ableto dramatically boost network bandwidth, speed,and reliability when it expands into far-flungareas. Moreover, the satellite will be able to fulfille-government requirements, provide critical e-banking services and information acrossMyanmar, added Mr Bleakley.In an interview with state media last week, U WinAung, chief engineer of the Ministry of Transportand Communications’ Information Technologyand Cyber Security Department, said thatcommunications can be established quickly incase of a natural disaster where vital informationcan be shared dramatically increasing the successrate of rescue works.

Source: Myanmar Timeshttps://www.mmtimes.com/news/myanmars-very-own-satellite-now-orbit.html

NewspapersMyanmar Times

08 Aug 2019

PwC | August 2019 14

Auditor says country’s foreign debt tops US$10bil

Myanmar had outstanding foreign debt ofUS$10.2 billion and local debt of K20.725 trillionat the end of 2018, an increase from the yearbefore, according to a report by the Union Officeof the Auditor General.The report was submitted to the PyidaungsuHluttaw (Assembly of the Union) on Wednesday.Auditor General U Maw Than said, “Debts areincreasing every year. The debt-to-GDP ratio atthe end of March 2018 was 38.3 percent.Therefore, a mid-term management strategy isneeded to implement the projects with loanswithin project periods for better management ofpublic debt.”Moreover, there was a difference of US$902million between foreign exchange receipts andspending. The Ministry of Electricity and Energy,the Ministry of Transport and Communications,and the Ministry of Natural Resources andEnvironmental Conservation top the foreignexchange revenue earners. Most foreign exchangespending went to paying back the principle andinterest on loans, the report said.According to the 2017 Union Budget Law and

2017-2018 Supplementary Budget Law, althoughtotal loan from local and foreign sources shall notexceed K5.4 trillion, the total of local and foreignloans was K8.943 trillion, it said.The budget deficit increased K409.07 billion fromthe previous year, and government treasurybonds and bills had to be sold by tender system toget a loan from the Central Bank of Myanmar tooffset the deficit.The Auditor General Office monitoredimplementation of the 2017 Union Tax Law andfiscal year 2017-18 National Planning Law, andsupervision of government loans related tocollecting revenue and effective budget spendingby government agencies. – Translated

Source: Myanmar Timeshttps://www.mmtimes.com/news/auditor-says-countrys-foreign-debt-tops-us10bil.html

NewspapersMyanmar Times

09 Aug 2019

PwC | August 2019 15

UN team meets locals to discuss issues with Tanintharyi conservation project

A United Nations Development Programme(UNDP) watchdog unit visited Myanmar in Juneto investigate the Tanintharyi conservationproject, which could threaten the land and forestrights of people in the area.The Social and Environmental Compliance Unit(SECU) met with 150 people from indigenousKaren villages to hear their concerns.The Conservation Alliance Tanawthari, a coalitionof Karen community organisations for theprotection of the rights of communities inTanintharyi, filed a complaint with the SECU inAugust 2018 to investigate and suspend theUS$21 million “Ridge to Reef project”.After finding the complaint unfounded, the unitconducted the first of two visits to localcommunities from July 18-20. UNDP Myanmarreported that the project will be suspended untilthe investigation is complete.“We understand there are about 224 villages inthe project area, including 73 indigenous Karenvillages. This project threatens the land and forestrights of thousands of indigenous people, and therights of refugees to return to their land in the

project area, and may undermine peace andstability in the region,” said Saw San Ngwe,director of Southern Youth, a member of thecoalition.Villagers told the visiting delegation that thegovernment cannot be trusted because its“protected areas” in the region have deprivedforest-dependent people of their livelihoods andway of life. Moreover, they said, they were neverconsulted about the project.Instead of conserving the forest, the governmenthas allowed rampant logging and granted largeconcessions to businesses, including palm oilplantation companies, they said.The locals are also worried that the project will re-ignite conflict as it excludes the Karen NationalUnion (KNU), which jointly administers projectareas with the government under the terms of the2015 Nationwide Ceasefire Agreement.

Source: Myanmar Timeshttps://www.mmtimes.com/news/un-team-meets-locals-discuss-issues-tanintharyi-conservation-project.html

NewspapersMyanmar Times

09 Aug 2019

PwC | August 2019

2. Weekly Key Policy News

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PwC | August 2019

Weekly Key Policy NewsHeadlines

Govt slams UN call for ban on businesses

Time's up for the copyright pirates

Suu Kyi-led Rakhine Development Agency Says UN Report ‘Intended to Harm’ Myanmar

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Despite wastage and losses, YCDC has no plans to raise water tariffs

No rules were changed to insurance JVs: MoPF

PwC | August 2019 18

Govt slams UN call for ban on businesses

The Ministry of Foreign Affairs said on Tuesdaythat it does not recognise the findings of a reportissued on Monday by the UN’s IndependentInternational Fact-Finding Mission on Myanmar.A statement issued by the ministry said themission’s work was based on unfoundedallegations and that the Myanmar governmenthas made its position clear.“We oppose mechanisms that are set up withoutallowing for national remedies to be exhausted,”the statement said, adding that the governmentalready has in place national accountabilitymechanisms such as the IndependentCommission of Enquiry (ICoE) and the Tatmadaw(military) Commission of Enquiry to addressallegations of human rights violations.“We adhere firmly to the position thatcooperation should be the basis for the resolutionof international issues, including that of humanrights. We do not believe that economic sanctionswill resolve the challenges that need to beovercome,” the statement said.It went on to say that the Myanmar governmentcategorically rejects the latest report of the fact-

finding mission and its conclusions and does notbelieve that such an action contributes to theresolution of the challenges that the nation facesin Rakhine State. “In setting up the fact-findingmission, the United Nations Human RightsCouncil exceeded its mandate and contravenedthe terms and practices of international law. Wedo not recognise either the fact-finding mission orthe report,” the statement said. On Monday, theUN fact-finding mission called for targetedeconomic sanctions against military-ownedbusinesses, saying that revenues earned fromdomestic and foreign business deals enhance themilitary’s ability to carry out alleged human rightsviolations in Kachin, Shan, and Rakhine states.The report also called for the imposition of anarms embargo, citing at least 14 foreigncompanies from seven nations, including China,Russia and Israel, that have supplied fighter jets,armoured combat vehicles, warships, missiles andmissile launchers to Myanmar since 2016.Source: Myanmar Timeshttps://www.mmtimes.com/news/govt-slams-un-call-ban-businesses.html

NewspapersMyanmar Times

07 Aug 2019

PwC | August 2019 19

Time's up for the copyright pirates

The routine infringement of copyright inMyanmar has devastated the literary world andother creative industries, and the violations willcontinue until laws aimed at protectingintellectual property are properly enforced.THE MYANMAR Publishers and BooksellersAssociation has again raised the issue of copyrightprotection, this time with an statement on July 18seeking the removal of electronic versions ofbooks that have been illegally posted on websites.The announcement listed 182 e-books that hadbeen posted on websites without the permissionof the writers or publishers, ready to bedownloaded for a fee or free of charge. Theassociation warned that if the files were notremoved from the websites, it would seekprosecutions for breaches of copyright, includingunder the provisions of the Copyright Lawenacted in May to replace the 1914 Copyright Act.The abuse of literary and artistic copyright haslong been a problem in Myanmar, and it’squestionable whether the statement will lead tothe removal of e-books posted on the internet inviolation of the law, or whether the new law itself

will result in a significant reduction in copyrightviolations.Before the internet was introduced to Myanmar in2000, all literature was printed and disseminatedby traditional publishers, but this situation largelyprevailed even after the Kindle and other e-readers became popular in more developedcountries in the late 2000s.There was an attempt to create a domestic e-bookmarket by the big media entertainment companyForever Group, which digitised the works ofMyanmar writers for sale on the internet in thelate 2000s. However, the venture was acommercial failure because internet connectionsat the time were poor, there were relatively fewcomputers in the country and smart phones werefar too expensive for most people. By the time theinternet became widely available in Myanmar,thanks largely to the 2014 liberalisation of thetelecommunications sector that brought the priceof a SIM card down to an affordable level.Source: Frontier Myanmarhttps://frontiermyanmar.net/en/times-up-for-the-copyright-pirates

NewspapersFrontier Myanmar

08 Aug 2019

PwC | August 2019 20

Suu Kyi-led Rakhine Development Agency Says UN Report ‘Intended to Harm’ Myanmar

YANGON—A statement from the public-privatepartnership program led by Myanmar StateCounselor Daw Aung San Suu Kyi ostensiblymeant to rehabilitate conflict-torn Rakhine State“categorically rejects” the allegations of a recentUN fact-finding mission, which found that theprogram’s projects contributed to “thecommission of crimes under international law.”The UN report, released on Monday, stated thatthe Union Enterprise for HumanitarianAssistance, Resettlement and Development inRakhine (UEHRD), an umbrella program forinfrastructure projects in northern Rakhine, actedto “consolidate the consequences of war crimes,crimes against humanity and acts of genocide.”After an attack from the Arakan RohingyaSalvation Army on government security outpostsin northern Rakhine in August 2017, the militarylaunched clearance operations in the area thatcaused nearly 400,000 Rohingya to flee intonearby Bangladesh at the time. The internationalcommunity has widely condemned the operationssince as ethnic cleansing.The UN report also listed 45 local companies that

offered donations totaling more than $10 million(15.1 billion kyats) to the military for projects innorthern Rakhine.On Wednesday, UEHRD said the fact-findingmission “paints a distorted picture of the UEHRD,which was established to address the complexissues of Rakhine.”“From its inception, UEHRD’s objectives were toprovide effective humanitarian aid, to coordinateresettlement and rehabilitation efforts, and topromote conflict resolution and durable peace forall communities in Rakhine,” the statement read.“We have never wavered in our pursuit ofhumanitarian objectives and have workedconsistently to improve conditions on the groundfor the relief, dignified return, and resettlement ofconflict-affected communities and displacedpersons.”

Source: The Irrawaddyhttps://www.irrawaddy.com/news/burma/suu-kyi-led-rakhine-development-agency-says-un-report-intended-harm-myanmar.html

NewspapersThe Irrawaddy

08 Aug 2019

PwC | August 2019 21

Despite wastage and losses, YCDC has no plans to raise water tariffs

The Yangon City Development Committee(YCDC) has no plans to raise tariffs on waterdespite losing money on distributing the resource.The country’s largest city and commercial capitalsees 45 percent of distributed water going towaste due to outdated infrastructure and theftcompared to Yangon Region, which sees between45pc and 50pc water wastage.YCDC’s Water and Sanitation Department actinghead U Myint Zaw said there were no plans toraise the tariffs at present but encouraged cityresidents to install water meters. “We’ll await theYangon Region government’s instructions despitethe losses that we’re facing in distributing water,”he said at a media briefing on August 5.At present, YCDC, which has jurisdiction over thecity, supplies more than 200 million gallons a dayand collects K88 per unit for residential use andK110 per unit for commercial use. One unit equals220 gallons. In Mandalay, residents pay anaverage K200 per unit while those in Naypyitawpay K110 on average.Yangon mayor U Maung Maung Soe urged cityresidents to conserve water, noting that the tariff

was lower than the cost of distribution. He alsosaid the YCDC was looking to collect morerevenue through getting more people to installwater meters.YCDC said in a statement on July 31 thatinspections will be made to weed out those whohave not installed water meters in order to reducethe illegal tapping of water from the city’spipelines.At present, water rates in Yangon are still low,compared to K200 per unit in Mandalay and K110in Nay Pyi Taw.Just last month, the Ministry of Electricity andEnergy raised electricity prices for residential andbusiness users for the first time in five years. Thiscame after losses on supplying electricity peakedat K630 billion in 2018-19, according to data fromthe Ministry of Planning and Finance.

Source: Myanmar Timeshttps://www.mmtimes.com/news/despite-wastage-and-losses-ycdc-has-no-plans-raise-water-tariffs.html

NewspapersMyanmar Times

08 Aug 2019

PwC | August 2019 22

No rules were changed to insurance JVs: MoPF

There have been no last-minute policy changes inregards to joint ventures between local andforeign insurers for both the life and non-lifesegments of the insurance market.Ministry of Planning and Finance (MoPF)director-general of the Foreign RegulatoryDepartment U Zaw Naing disputed any such lastminute policy changes in regards to theshareholding structure of the joint ventures thatreportedly caused a number of local insurers toget cold feet and pull out of negotiations withtheir foreign counterparts.It was reported by the Nikkei Asian Review onAugust 2 that three foreign insurers - Thailand’sMuang Thai Insurance and Muang Thai LifeAssurance and South Korea’s DB Insurance –have pulled out of their JV arrangements as theycould not finalise agreements with their localcounterparts.This was reportedly due to a last minute changeby the government allowing the foreign insurersto buy only newly issued shares of local insurersinstead of existing shares to form JVs.U Zaw Naing told The Myanmar Times that

Section 3.1.6 of the request for proposal (RFP)rules liberalising the insurance market required“the method of acquisition to be in the form of theforeign joint venture partner subscribing for newshares in the applicant (that is, issuance of newshares instead of a sale and purchase of existingshares in the applicant)”.“We did not change anything, it was in theoriginal announcement under Section 3.1.6 and itincluded the part about the new shares,” U ZawNaing said, adding that the ministry sent out nineRFPs on May 17 from the nine expressions ofinterests it received from local life and non-lifeinsurers interested in setting up partnershipswith foreign insurers.According to U Zaw Naing, the ministry hadreceived six out of the nine RFPs by the June 21deadline. “Only six RFPs were returned on thedeadline, not the full nine which applied,” U ZawNaing said.

Source: Myanmar Timeshttps://www.mmtimes.com/news/no-rules-were-changed-insurance-jvs-mopf.html

NewspapersMyanmar Times

08 Aug 2019

PwC | August 2019

3. Weekly Investment News

23

PwC | August 2019

Weekly Key Investment NewsHeadlines

Rosewood Yangon receives Blue Plaque, to open amid softer tourist arrivals

MyTel anticipating 5G rollout next year if granted licence

Foreign casino operators looking to set up in Myanmar

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Yangon’s smart-parking tender to be out this month

FMI takes steps to raise expansion capital

PwC | August 2019 25

Rosewood Yangon receives Blue Plaque, to open amid softer tourist arrivals

Rosewood Yangon, the city’s first ultra-luxuryhotel, yesterday received Yangon’s 31st BluePlaque, signifying a leap forward for Yangon bothin terms of hospitality offerings and preservingthe city’s rich heritage.Rosewood Yangon, which is situated on thecorner of Sule Pagoda Road and Kanna Road nearthe Strand, will offer 205 guestrooms and suitesas well as one and two-bedroom residences. Thepublic will be able to book rooms at the hotel fromOctober onwards.Formerly the New Law Courts, the building wasconstructed between 1927 and 1931 and is one ofAsia’s first multi-storied, steel-framed buildings.During WWII, the building was occupied byJapanese troops and sustained damage during thebombing of the nearby port. It subsequentlyhoused a myriad of government departments,including the Police Headquarters and theAviation Department and the upper house of thenation’s first independent representativeparliament.In 2012, the building was put up for tender toprivate developers. In October 2014, a lease

agreement on the property was signed betweenthe Yangon Region Government and PrimeResidence, which is a partnership between KanokFurniture and Decoration of Thailand andJewellery Luck Group of Companies of Myanmar.Restoration work, which would ultimately amountto almost US$100 million, began the same year.In May 2018, Prime Residence signed anagreement with Hong Kong’s Rosewood Hotels &Resorts to bring the ultra-luxury brand toMyanmar, upsetting plans for the building to beoccupied by the five-star Heritage HotelKempinski Yangon.Rosewood Yangon is opening in Yangon at a timewhen tourist arrivals from western countries havedropped as a result of violence in Rakhine. Butthe hotel is betting that tourists will return in thecoming years, and with an appetite for high-endluxury hospitality offerings.

Source: Myanmar Timeshttps://www.mmtimes.com/news/rosewood-yangon-receives-blue-plaque-open-amid-softer-tourist-arrivals.html

NewspapersMyanmar Times

05 Aug 2019

PwC | August 2019 26

MyTel anticipating 5G rollout next year if granted licence

Telecom International Myanmar Co Ltd (MyTel),a joint venture between Myanmar and Vietnamlaunched in June last year, can roll out 5Gservices next year if the spectrum license isgranted. The company made a test-run of the 5Gservice on July 31 where a speed of 1.6 Gpbs wasrecorded compared to the 4G network’s 150Mbps. “5G is the future. 2G and 3G will be goneafter 2020. If the Posts and TelecommunicationsDepartment grants the spectrum licenses nextyear, then the road to 5G is not too far away,”MyTel chief external relations officer U Zaw MinOo said. MyTel will be partnering Huawei for the5G network services. The service will be availablein urban areas first before being offered in ruralareas. A crucial factor would be governmentsupport for the implementation of the 5Gspectrum roadmap including mobile phones andinfrastructure that can support the service. Thecompany has invested K1.2 billion ininfrastructure with 15 million subscribers.“If the government implements the roadmapspectrum without delays, then we’ll see 5Gservices launching next year,” U Zaw Min Oo said.

The 5G network not only offers 100 Mbps speedfor the internet, but will mean that artificialintelligence, virtual reality, Internet of Things andsmart cities will also become a reality. Therewould be benefits to various industries andsectors of the economy.Post and Telecommunications Departmentdeputy director-general U Myo Swe said theroadmap’s preparations will be published soon.“The newly created Spectrum Roadmap will bepublished in 2019 after it’s checked. MyanmarNational Broadband White Paper 2019 will bepublished with the aid of other partnercompanies,” he said. The Ministry ofCommunications and Information Technologysaid 5G will replace 4G/4.5G under the MyanmarNational Broadband White Paper 2019, SpectrumRoadmap 2019, network coverage, infrastructure,fibers and citizens, households, and much otherbroadband support.Source: Myanmar Timeshttps://www.mmtimes.com/news/mytel-anticipating-5g-rollout-next-year-if-granted-licence.html

NewspapersMyanmar Times

06 Aug 2019

PwC | August 2019 27

Foreign casino operators looking to set up in Myanmar

A number of casino operators from Hong Kong,Taiwan and Macau have enquired about operatingcasinos in Myanmar following the passing of theGambling Law 2018 in May, which replaced anearlier law from 1986.Directorate of Investment and CompanyAdministration acting director-general U ThantSin Lwin said casino operators from Hong Kong,Taiwan and Macau have been actively seeking outopportunities in the country following the passingof the law, which allows only foreigners to entercasinos.“These operators have been seeking informationand surveying the market in Myanmar. They’relooking to set up business either in Yangon,border areas or on islands,” he said. While the lawhas been passed, U Thant Sin Lwin said specificrules and procedures still need to be in placebefore operators can set up casinos, whether asstand-alone businesses or with hotels attached.The government plans to allow casinos into thecountry as a tourist attraction and boosts its taxrevenue.

Source: Myanmar Timeshttps://www.mmtimes.com/news/foreign-casino-operators-looking-set-myanmar.html

NewspapersMyanmar Times

07 Aug 2019

PwC | August 2019 28

Yangon’s smart-parking tender to be out this month

The Yangon City Development Committee(YCDC) is setting out a tender for a smart-parkingsystem this month in a move to curbindiscriminate parking that has often beenblamed for the traffic woes of the country’scommercial capital.The secretary of the road and bridgesubcommittee of the YCDC, U Lin Khaing, said atender would be called out this month for asmart-parking system to be built in six downtowntownships of Yangon.“We’ll approve the tender details next week andthen invite interested bidders throughnewspapers. We’ll give the bidders four to sixweeks to prepare their tender bids,” he said.The Yangon Region government announced lastyear that an advanced parking system will beimplemented to tackle the problem of the lack ofparking space, which has been blamed for thedaily traffic congestion in the city.Yangon Chief Minister U Phyo Min Thein said inan August 3 press conference that “vehicle ownersshould not use the streets as a garage, that is whya smart-parking system will be implemented”.

The YCDC said should the smart-parking systemto be implemented in the six downtowntownships were successful, then it would beimplemented for the rest of the city.A trader working in the city, U Kaung Satt Naing,believes the system can reduce problems betweenvehicle owners and property owners. “It’s a bigproblem for us in Yangon and we hope the systemcan help reduce the problems,” he added.YCDC member Daw Mi Mi Thwe said the newsystem has the potential to curb people parkingindiscriminately especially if the fee-collection forparking is enforced.Of the more than one million registered vehiclesin the country, some 600,000 are registered inYangon. Align your business and personal interest

Source: Myanmar Timeshttps://www.mmtimes.com/news/yangons-smart-parking-tender-be-out-month.html

NewspapersMyanmar Times

07 Aug 2019

PwC | August 2019 29

FMI takes steps to raise expansion capital

First Myanmar Investment pcl (FMI) has slasheddividends for the first time in 27 years to shore upfunds for expansion, FMI executive chairmanSerge Pun, said at a shareholders’ meeting lastweek.He said the company is also planning to raisecapital through issuing new shares as well asselling shares to foreign investors. “Despite ourdeclining profit, investments must continue to bemade for sustained growth. For future capitalrequirements, we will invite more foreigninvestment as well as issue new shares,” he said.For the financial year ended March 31, 2019, FMIposted a 51.6pc fall in net profit to K9 billioncompared to the previous corresponding periodlast year, mainly due to higher costs incurred foremployee compensation and professional feesamongst other cost items.The reasons for the lower net profit includeddepreciation of the kyat at the end of last year andbeginning of 2019, cancellation of severalunfavourable projects and setting aside funds forlong-term projects.This was despite revenue for the period rising

36pc to K279.7 billion, driven primarily by YomaBank.Mr Pun said due to the lower net profit, the boardhas made the decision for the first time in 27years to not declare a dividend as funds needed tobe set aside for investments. In the previousfinancial year, the company had declared adividend of K700 per share.He noted that Yoma Bank will upgrade itsoperations to allow for government services towithdraw their salary via Wave Money, to takesmall-scale non-guaranteed loans through thebank’s Smart Account and to link Wave Money toagents for payment transactions.He said the instalment plan for those who want tobuy a residential property in the affordable CityLoft project has been successful and that moreinvestments may be planned for such projects.The plan allows those who can pay K370,000 amonth to do so over a 25-year period.

Source: Myanmar Timeshttps://www.mmtimes.com/news/fmi-takes-steps-raise-expansion-capital.html

NewspapersMyanmar Times

09 Aug 2019

PwC | August 2019

3. Weekly New Tenders

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PwC | August 2019

Tenders (Myanmar)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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MOTC: Invitation for Bids – Yangon Mandalay Railway Improvement Project Phase II, Closing Date: 18 Sep 2019

PwC | August 2019

Tenders (Multilateral organizations) 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: TA-8785 REG: Mekong Business Initiative - 246 Financial Technology Specialist (48270-001), Closing date: 14 Aug 2019

PwC | August 2019

4. MIC Permitted Projects

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PwC | August 2019

MIC Permitted Projects (Meeting 12, 2019)

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No. Name of Company Type of Investment Form of Investment

1 Qunying Textile (Myanmar) Co., LtdManufacturing, print and dyeing of fabric & home textile on CMP basis

Wholly foreign owned

2 Gold emperor (Myanmar) Co., Ltd Manufacturing of various kinds of shoes on CMP basis

Wholly foreign owned

3 Myanmar Than Taw Myat Co., LtdManufacturing and marketing of cement from semi-product (clinker)

Joint venture

4 Myanmar Green Century Co., Ltd Hotel service Joint venture

5 Aquamarine Ecotourism Development Co., Ltd Eco hotel and resorts services Wholly Myanmar owned

6 AquaGold Myanmar Preal Co., LtdBreeding, rearing of oyster and sales of cultured pearl

Wholly Myanmar owned

7 Pyi Phyo Tun International Co., LtdBreeding, rearing of oyster and sales of cultured pearl

Wholly Myanmar owned

Source: DICA

PwC | August 2019

5. Upcoming Events

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PwC | August 2019

Upcoming Events (September 2019) List

Date Location Name of Event Sector Price Focus Points

12-14 SepYangon Printech Myanmar IT Free

“Printech Myanmar convenes manufacturersof technologies for rotogravure, flexography,offset printing, digital printing, hybridtechnologies, and converting technologiesand it features a display of Machinery andequipment for prepress and printing forms,Machinery, lines and special equipment forthe papermaking industry, Co-extrusionequipment for packaging plastic films,Machinery, equipment, lines for corrugatedboard production, Machinery, equipment,lines for solid board and folding boardproduction, and much more.”

17-19 Sep Yangon Myanmar Connect Telecom TBC

“Myanmar Connect is the only conference toconnect the entire telecoms industry withinMyanmar and this year will explore thetelecoms sector and the wider ecosystem inMyanmar’s continued journey towards adigital future. The event unites local andinternational, well-established telecomsplayers with start-ups and projects withpotential, making this a fantastic opportunityto forge new business connections”

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Note: Events information are collected from https://www.go-myanmar.com/events-and-conferences and https://10times.com/myanmar .

© 2019 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 Weekly Business Intelligence Publication

For further information please contact:

Mark RathbonePwC Capital Projects and Infrastructure Leader, Asia+65 6236 4190mark.rathbone@sg.pwc.com

Jennifer TayPartnerCapital Projects & Infrastructure, PwC Singapore +65 8876 9300jennifer.c.tay@sg.pwc.com

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