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Thread: As Burma opens up, foreigners eye untapped markets

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    As Burma opens up, foreigners eye untapped markets

    As Burma opens up, foreigners eye untapped markets | Democratic Voice of Burma

    From seasoned investors to recent graduates armed with little more than hastily made business cards and dreams of striking it rich, foreigners are pouring into Burma to stake a claim as it opens up.

    It is an expat “goldrush” driven by the promise of an economic boom after the rollback of many sanctions following the end of decades of junta rule.

    But some, at least, are also drawn by a commitment to help rebuild the impoverished nation.

    The once-empty western bars of central Rangoon are now doing a roaring trade, hotels are fully booked and networking nights thrum with the chatter of new arrivals hungry for contacts in the city.

    Every day hotel lobbies teem with foreigners hunched over laptops as they talk via Skype with overseas companies eager to hire boots on the ground.

    “Once I graduate I’ll move here for sure,” Peter Morris, a 34-year-old American law student based in Hong Kong.

    But the flurry of arrivals are not universally welcomed.

    Some older Burma hands grumble about a type of cocky newcomer all too keen to hand out business cards and discuss pie-in-the-sky plans for the future, despite having little knowledge of the country.

    “There are a hell of a lot of sharks in Yangon (Rangoon) right now… people looking to take advantage of any opportunities they can and often not for any benefit to the Burmese people,” laments one long-time expat resident requesting anonymity.

    “(There are) lots of opportunists with jumped up job titles that often don’t exist and ideas that will never come to fruition.”

    Despite that, akin to frontier markets the world over, the lure of riches and adventure is proving irresistible.

    Telecom, automobile, oil and gas, and even cigarette firms are rolling into Burma, responding to the end of many sanctions and the introduction of business friendly reforms by President Thein Sein’s two-year-old government.

    While many are bringing their own senior staff and hiring skilled Burmese citizens, many of whom are returning after years abroad, a lack of modern business acumen among locals educated within the country’s threadbare school system presents openings for enterprising foreigners.

    Some have years of Burmese academic, business or field experience – particularly for the legion of non-governmental organisations – while others are following their noses for the opportunity to spot an opening.

    “It hit me that there were all these areas where there was nothing… I could quickly identify niches to work in,” says Swedish entrepreneur and consultant Andreas Sigurdsson of his decision to swap a successful banking career in glitzy Shanghai for Rangoon’s shabby charm.

    Within weeks of his arrival last year the 31-year-old had launched his first venture — listings website myanmore.com — turning an idea “that came up over a beer” into a reality a few days later.

    Sigurdsson says he is driven by making an “impact” in a poor nation with bags of potential but limited capacity and experience.

    “Building new business, training employees, providing jobs and skills… that’s one way to make an impact,” he said.

    Goodwill generated by the nation’s freedom struggle, embodied by Nobel Laureate and opposition leader Aung San Suu Kyi, has also drawn many to the Asian nation.

    Designer Karta Healy is bringing his bamboo products business to Burma, hoping for a repeat of its successful launch in China.

    “After 10 years of watching China consume itself, I’m ready for somewhere I can get more involved, explore my design work and give back to somewhere I love at the same time,” he said.

    Using community-based workshops to make everything from bamboo furniture to bicycles, he hopes the business will quickly gain ground among a population skilled in working with the material.

    “Global isolation has forced Myanmar’s (Burma) people to be the most ‘eco’ (friendly) by default. My dream for Myanmar is that it will become the greenest… wasteless society in Asia, if not the world.”

    The enthusiasm appears — at least for now — to be working both ways, with many of Burma’s people glad to learn from foreign expertise after years of isolation.

    “I welcome them… we all should,” says Aung Soe Minn, owner of a gallery popular with expats.

    “Our country had been left behind for a long time… we should work with foreigners to gain experience,” he said.”

    That welcome, coupled with the nation’s possibilities, explains why many Rangoon expats choose to stay, despite the challenges of living in a city beset by electricity blackouts, slow internet, high rents and stifling bureaucracy.

    Things are improving, says Tom Bergreen, 49, an American who has moved to the city to open an ice cream parlour and restaurant, but poor infrastructure remains the “most frustrating aspect of living and trying to do business here”.

    “But I’m extraordinarily fond of the people and culture. Life in Myanmar is never, ever boring.”

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    K2
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    Hummm .....
    Its My Life .....!

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    Super Moderator LivinLOS's Avatar
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    These kind of "Myanmar gold rush" pieces seem all over various blogs I read.. I just am not so sure myself.

    From what I can understand, while labor might be really cheap, the infrastructure, power, transit, etc.. free trade issues.. General development level.. Seems to me that for many things this is simply going to be so far behind other low labor rate countries in the region (Indo, Cambo, possibly Laos) just makes me wonder if it isnt a bit herd like and already hitting valuations that seem hard to justify.

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    K2
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    The peak in property prices has already been seen (for now) early last year, with the frenzied building going on on largely Chinese and Japanese money who have been pouring money into Myanmar a decade or more already. Those rushing in now - sure there is just so much scope for developent - finding a good opportunity with sensible pricing and realistic chnace of long term success must be hard saught. Until incomes start to push higher the general population is a long way from buying the latest gizmo's.
    Its My Life .....!

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    Senior Member Dodger's Avatar
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    Wow I just wish everyone thought like you Kev, if so, I'd be in there like Flynn!!!!

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    Super Moderator LivinLOS's Avatar
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    Quote Originally Posted by K2 View Post
    sure there is just so much scope for developent - finding a good opportunity with sensible pricing and realistic chnace of long term success must be hard saught.
    This is my main point.. Theres huge untapped potential.. And I suspect especially in tourism which is going to be most easily translated into returns... But the whole goldrush mentality I am seeing in so many blogs just makes me think value is being driven out.

    Like this one

    How to invest in Myanmar

    How to invest in Myanmar
    by TIM STAERMOSE on MAY 21, 2013


    May 21, 2013
    Hong Kong


    [Editor’s note: Sovereign Man’s Chief Investment Strategist Tim Staermose is filling in today while Simon is en route to the United States.]

    Myanmar is among the hottest “frontier” investment markets today.

    The country is going from an authoritarian regime to democracy, from a conflict situation to a situation of relative peace, and, most importantly, from a closed economy of state-owned companies, to an open, free market economy.

    Such positive change all at once in one country is unprecedented.

    Fund managers are falling over themselves to invest there. At The Myanmar Investment Summit in Hong Kong last week, I met some of them.

    The problem is, at this early stage there is no easy way to invest. There is a stock market. But, it has only 2 listed companies: Myanmar Citizens Bank, and Forest Products Joint Venture Corp (FPJVC). But they don’t actively trade.

    There are also two public companies controlled by Myanmar’s leading tycoon Serge Pun.

    First Myanmar Investment Co., Ltd. trades “over the counter” in Myanmar among well-connected locals. But there is no stock market listing. The other is Yoma Strategic, the group’s Singapore-listed arm. But it’s already surged to a nosebleed valuation.

    With so few investable vehicles, that leaves the private equity market. There are already plenty of people setting up such funds to capitalize on the wave of money sitting on the sidelines ready to wash into the Myanmar economy.

    These funds will all need local businesses and projects to invest in. And that’s where the real opportunity lies.

    For the right person, getting to work on the ground sourcing deals for all these “frontier investment funds” to invest in could be enormously lucrative. I’m talking about generational wealth potential.

    Come up with a good idea, or find a great investment on the ground in Myanmar, and there is practically an unlimited amount of capital available for the project.

    And there’s huge potential in the country. There’s a young population roughly 50 million people that’s simultaneously one of the cheapest work forces in Asia as well as one of the fastest growing consumer markets.

    Manufacturing, tourism, agriculture, construction and building materials, real estate development, transportation, logistics… you name it, the country needs it ALL.

    However, it’s not going to be a walk in the park. Myanmar still sorely lacks basic infrastructure.

    Blackouts are commonplace. Just 25% of the population has access to electricity. There’s no functioning banking or financial system. Outstanding credit to GDP is just 5%. And, only 6% of the population has telephones.

    So for now, it’s largely been a case of waiting for the infrastructure to improve… which is starting to happen.

    Several independent power producers are getting ready to turn on the lights. The government will be announcing the winners of tenders for two new telecoms licenses in the near future. Credit cards are beginning to be accepted, and the banking system is being modernized.

    And with the country’s profile on the international stage constantly improving, the time is ripe.
    Its not the fact I dont think it will grow, its just what price you pay for investment currently.

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    Super Moderator LivinLOS's Avatar
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    Burma Boom - Myanmore YANGON

    Heres another one citing the boomtown goldrush.. Tho to be fair this is focused around the tourism markets, and in that segment I think the sheer rate of change in arrivals is going to be a huge driver where the valuation issue I mention isnt going to come into it.

    If I was young(er) and hungry to get my foot into a rising market with sweat equity, I would for sure be looking into this one.

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    Senior Member soupdragon's Avatar
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    ^Agree, the build it and they will come could definitely apply to this situation.

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