November 29, 2020

YSX: Trading On Smallest, Newest Stock Market In The World (possible the most unusual)

For brave, patient pioneers an opportunity has opened to tap into Myanmar’s enormous wealth through investing on the Yangon Stock Exchange (YSX).   “This is the world’s newest and smallest exchange,” said Sayed U Thet, Executive Senior Manager YSX.  As of 2020, foreigners can be part of the game.

For traders familiar with the S&P500, the FTSE or ASX be prepared to be bamboozled. The YSX is a trading platform like no other.

Fundamental to the system is ‘Matching’, ‘Tick Size’ and Price Ceilings/Floor, unbelievable dividend returns: 10% to 20% one year; zero the next.

Companies listed on the YSX:

  • First Myanmar Investment Public (FMI)
  • Myanmar Thilawa (MTSH)
  • Myanmar Citizens Bank (MCB) *
  • First Private Bank (FPB) *
  • TMH Telecom Public (TMH)
  • Ever Flow River Group (EFR)

How to buy YSX shares?

Six security companies are permitted to act as brokers and all traders must have a MMK account.

Investors can access online trading between 9.30am and 1pm however, unlike major exchanges trading is not in real time.

To process orders, there are seven ‘Matching’ times: 10am, 10.30am, 11am, 11.30am, 12pm, 12.30pm and 1:00pm.

For thirty-minutes buy/sell orders can be submitted, but lay dormant, until ‘ Bing’, matching occurs.

All orders are placed with a price limit or at market.  “‘Market orders are possible and will be matched with priority,” said Sayar U Thet.

Price Limits On Companies.

The YSX regulations stipulate share price volatility must be minimized. “We set the daily price moment to about 25% of the previous day’s closing price, said Sayar U Thet.

Based on FMI, (10,000 MMK) in one day the bids can increase by 12.5% (11,250) or decrease by 12.5% (8,500).

Price orders can only go up, or down by a set amount. If the Tick Size is 100, orders can increase or decrease by 100.   If the Tick Price on FMI is 100 and the share price is 10,100 or 10,200 but cannot be 10,150, or 10,250.

Matching Procedure

Matching madness happens every thirty minutes to determine a base price.  The system adds up the number of shares investors want to buy, counting down from the highest to the lowest.

The number of share sell order is added up, from the cheapest to the most expensive.  A base price is determined where there are equal buy to sell orders.

Think of two thermometers, one in ice, another in hot water.  Heat is added to the thermometer resting in ice. The equivalent amount of cold is removed from the Hot Thermometer.  Where the temperature is equal is the base price.

All buy orders above the base price will be processed, none below.  All sell orders below the matching price will be cancelled.  All orders will be processed at the base price.

Foreigner traders?

Legislation states that foreign ownership can be up to 35%. “At the moment traders can buy into four trading companies,” Sayed U Thet. “It’s Companies themselves who determine the percentage of foreign ownership, under 35%”.

Here’s hoping!

* No foreign trade

 

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