Best of the Week
Most Popular
1.SNP Offers Labour Deadly Death Embrace Alliance, Holding England to Ransom, Destroy UK From Within - Nadeem_Walayat
2.Gold And Silver – Most Widely Used Currency In Western World? Stupidity - Michael_Noonan
3.Election Forecast 2015 - Coalition Economic Recovery vs Labour Collapse - Nadeem_Walayat
4.Election Forecast 2015 - Debates Boost Labour Into Opinion Polls Seats Lead - Nadeem_Walayat
5.Why are Interest Rates So Low? Ben Bernanke, Confused as Ever, Starts His Own Blog to Prove It - Mike_Shedlock
6.Leaders Debate Election 2015 - Natalie Bennett Green Party Convincing Anti-Austerity More Debt Argument - Nadeem_Walayat
7.Labour Economic Collapse vs Coalition Recovery - UK Election Forecast 2015 - Video - Nadeem_Walayat
8.China’s Stock Market Mania; How High can Red-chips Fly? - Gary_Dorsch
9.Gold and Misery, Strange Bedfellows - 31st Mar 15 - Dan_Norcini
10.Ed Miliband Debate Election 2015 Analysis - Labour Spending, Debt and Economic Collapse - Nadeem_Walayat
Last 5 days
Nate Silver UK General Election Forecast 2015 as Wrong as 2010? - 4th May 15
U.S. GDP Sucking Spoilt Milk From A Bloated Dead Sow - 3rd May 15
Stocks, Gold and Oil Markets Chopsville - 3rd May 15
UK Election 2015 Forecast - The Most Probable Outcome is... - 3rd May 15
Kate Gives Birth to Coalition Government - 2nd May 15
Stock Market Correction Time? - 2nd May 15
Gold And Silver - Thieving Bankers Operate In Open; Public Have Eyes Wide Shut - 2nd May 15
U.S.A. Caught In Enormous Policy Vise - ZIRP & QE Destructive Influence - 2nd May 15
Crude Oil Price Bear Market Is Over - 2nd May 15
Gold and Silver Bear Squeeze Comes and Goes - 2nd May 15
UK Election Forecast 2015 - Who Will Win? - 1st May 15
Gold Developments Say New Mine Supply Is Peaking - 1st May 15
Emerging Mexican Silver - 1st May 15
Investigating The U.S. GDP Deflator: Wildly Differing Results Depending on Your Choice - 1st May 15
JP Morgan Cornering Silver Bullion Market? - 1st May 15
Baltimore Riots Whose Fault? - 1st May 15
Monetary And Economic Insights From Incrementum’s Advisory Board - 1st May 15
Your Best Stock Investment in the "Cloud" Is Right Here - 1st May 15
Stock Market Kondratieff Waves and the Greater Depression 2013- 2020 update - 1st May 15
How One Chart Is Changing My Outlook on Crude Oil Prices - 1st May 15
The Real Reason Why Obama Wants to Lift Sanctions on Iran - 30th Apr 15
Gold and the New U.S. and UK Recession - ZIRP to Continue - 30th Apr 15
Uranium Price Is About to Rocket - 30th Apr 15
Immigration Crisis Drives a Deep Wedge Between E.U. States - 30th Apr 15
Labour Leads in Nick Clegg's Sheffield Hallam Seat, Latest Ashcroft Opinion Poll - 30th Apr 15
Is the Fed about to Ignite the Stock Market Sell in May and Go Away Trade? - 30th Apr 15
Bill Gross on Pimco Hiring Bernanke and Fed Interest Rate Hike 2015 - 30th Apr 15
The European Stock Markets Trend Is Up. We're In. Are You? - 29th Apr 15
Putin: Czar Of Natural Gas, Crude Oil, Uranium & GOLD - 29th Apr 15
BEA Reports Weak U.S. 1st Quarter 2015 GDP Growth at 0.25% - 29th Apr 15
Why Labour Cannot Win Sheffield Hallam and other Lib-Dem / Conservative Key Marginal Seats - 29th Apr 15
Stocks, Bonds and Real Estate Financial Hurricanes Headed Our Way - No Where to Hide! - 28th Apr 15
Bitcoin Price Counterintuitive Signs - 28th Apr 15
Stock Market Valuations - Maybe I am Crazy - 28th Apr 15
Gold Price Rises, Silver Surges – Physical Demand and Greece, Ukraine, Russia Risks - 28th Apr 15
The Insurance "Game" Has Changed – and Investors Can Profit - 28th Apr 15
Prelude to a Japanese Revival - 28th Apr 15
Why You Could Make ANOTHER 100% in China Stock Market Starting Now - 28th Apr 15
CIA Prefab State Terror for Human Bondage - 28th Apr 15

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

The War on Cash!

"If I Could Put All My Money in Myanmar, I Would"

Stock-Markets / Emerging Markets Dec 07, 2012 - 12:56 PM GMT

By: DailyWealth

Stock-Markets

Chris Mayer writes:

The Governor's Residence in Yangon is a richly restored teak mansion set in the leafy embassy quarter of the city. Now a luxury hotel, it was once the home of the governor when the British ruled Burma.

I met Mai Nguyen on the verandah for breakfast, under lazily spinning ceiling fans, amidst lush gardens and lotus pools. Mai is a Vietnamese transplant from Saigon. She is also an associate director at Yoma Strategic Holdings. Listed in Singapore, Yoma is a direct proxy for Myanmar's booming property market and one of the key opportunities I wanted to vet while I was here.
 
As regular readers know, I traveled the Golden Land, visiting Yangon, Bagan, Mandalay, and Ngapali. Mai was my first meeting in the country, and what follows is another glimpse at the extraordinary opportunities here.
 
Mai works for Serge Pun, who owns 50% of Yoma and is one of Myanmar's famous dealmakers. Pun left Myanmar in 1965 and spent nearly 30 years in Hong Kong and China. He came back to his home country in 1991 to found businesses in real estate, agriculture, automobile dealerships, and more. Yoma is primarily a real estate play with an enviable land bank of 12 million square feet in Yangon.
 
Just how valuable that land bank might be is easy to guess: very. There has been practically no development for 50 years in Yangon. This is the largest city in Myanmar, with a population of 4 million. The first chart of the nearby pair shows you how Yangon stacks up in population against its fellow members of the Association of Southeast Asian Nations.
 
 
The second chart shows you something of the growth potential of the city. It shows you the amount of office space in Yangon compared with regional peers. Consider that Hanoi, a city with half the population of Yangon, has nearly 17 times as much office space.
 
 
As Myanmar has opened up, prices have spiked. Through September, the average rental rate for office space per square meter is up 55% on the year. Vacancy is virtually nothing. For this example, I chose office space. But I could just as easily have picked hotel rooms, apartment units, or retail space. They all tell the same story. For Yangon, or Myanmar as a whole, these markets barely register as flyspecks. For developers of new properties – if you have the land – there is a fortune in the offing.
 
Mai helped fill in some details over hot bowls of mohinga. (This is a classic Burmese dish of fish soup and rice noodles, topped with split pea fritters, boiled egg, coriander leaves, dried chilies, and a squeeze of lime juice. You find it everywhere in this country.)  
 
She also shared valuable research with me about Myanmar and anecdotes about what it was like to live there.
 
Mai told me about Yoma's signature Pun Hlaing Golf Estate development. Pun Hlaing has over 600 acres of prime real residential estate. It sits on a peninsula between the Hlaing and Pan Hlaing rivers, about eight miles west of Yangon. Mai promised to arrange a tour of the property for me. I thanked her and dabbed at my forehead with a napkin. The spicy hot mohinga and humidity were making me sweat. I was often sweating in Myanmar.
 
When I got to see it, I was not disappointed. Pun Hlaing Golf Estate is gorgeous, an oasis from the traffic and noise of the city outside its gates. An 18-hole Gary Player golf course wends it away around high-end bungalows. There is a lot of water – 18 lakes, the brochure says. The grounds are immaculate and you can see the famous Shwedagon Pagoda in the distance. Next time, I'll bring my clubs.
 
Tun Tun Lin, the sales director for the project, showed me around. There are 326 properties already built, and 220 families reside on the estate year-round. We looked in a number of these – villas, condos, and apartments. They would be high-quality anywhere in the world. There are also tennis courts, a swimming pool, a spa and salon, a gym, and a comfortable clubhouse overlooking the 18th green where we had dinner.
 
It's good to visit places like this, to see the best that one can achieve in a country. I would see the full spectrum while in Myanmar. In the big-picture sense, the country is poor. Per capita income is only $900. Compare that with $1,400 in Vietnam and $5,000 in Thailand.
 
As I've mentioned in other places, this disparity is due to 50 years of evil dictatorial oppression. Go back before World War II. Myanmar (then Burma) was perhaps the richest country in Southeast Asia. I see no reason why, as long as the country continues to move toward freer markets, it can't again at least move closer to neighboring Thailand. This "catching up" idea is at the heart of my book World Right Side Up: Investing Across Six Continents.
 
There are plenty of risks. Myanmar's economy is not an inevitable sunrise. The thuggish generals and their cronies still have power. And there is ongoing ethnic and religious violence in the west between Muslims and Buddhists. Other parts of the country have similar troubles.
 
In reading as much about Myanmar's history as I could get my hands on, it's worth remembering that it has often been a fractious country with chieftains holding sway over areas as large as Scotland or strongholds as small a single hilltop. There are a bewildering number of tribes beyond the Irrawaddy River Valley, from the "giraffe women" of Padaung to the former headhunting Wa. But in terms of pure upside potential and size (with a population of about 60 million), there is nothing like Myanmar in the world.
 
It seems like people are interested in the story. When I got home, I sat for an interview with Lauren Lyster on the TV show Capital Account in Washington, D.C. And I also did a 40-minute interview with one of Myanmar's English-language business magazines, MZine+. People wanted to know what I thought and what my impressions were.
 
Later, I saw Lauren interview Jim Rogers, the prescient globe-trotting investor and author. In that interview, he said: "If I could put all my money into Myanmar, I would." 
 
Unfortunately, for a public stock market investor, it isn't easy to invest in Myanmar. Jim Rogers admitted as much, which made me feel better about my inability to turn up a good actionable idea despite my best efforts. (At least, not yet.) Yoma is really it – and its price, I have to say, reflects that.
 
Still, the market has a way of manufacturing what people want. And already I've had brokers and promoters send me information on tiny mining or oil and gas companies trying to raise money and do something in Myanmar. I'd avoid these. But good funds and ideas will come.
 
Regards, 
 
Chris Mayer

Editor's note: Chris Mayer is the editor of Capital & Crisis, a monthly advisory considered required reading around the DailyWealth offices. Chris consistently provides contrarian investment ideas you won't find anywhere else. Click here to learn more.

Further Reading:

It's not easy to invest in Myanmar just yet. But earlier this year, "the Tokyo Stock Exchange announced it would help Myanmar develop its stock market," Chris writes. "Many companies are already trying to elbow their way in Burma." Get the full story here: The Next Big Story in Asia.
 
"China affects so much of the world economy, especially as it relates to commodity prices – and your commodity stocks," Chris wrote a few months ago. Learn what he calls the two most important questions every commodity investor must ask here.

http://www.dailywealth.com

The DailyWealth Investment Philosophy: In a nutshell, my investment philosophy is this: Buy things of extraordinary value at a time when nobody else wants them. Then sell when people are willing to pay any price. You see, at DailyWealth, we believe most investors take way too much risk. Our mission is to show you how to avoid risky investments, and how to avoid what the average investor is doing. I believe that you can make a lot of money – and do it safely – by simply doing the opposite of what is most popular.

Customer Service: 1-888-261-2693 – Copyright 2011 Stansberry & Associates Investment Research. All Rights Reserved. Protected by copyright laws of the United States and international treaties. This e-letter may only be used pursuant to the subscription agreement and any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), in whole or in part, is strictly prohibited without the express written permission of Stansberry & Associates Investment Research, LLC. 1217 Saint Paul Street, Baltimore MD 21202

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Daily Wealth Archive

© 2005-2015 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Free Report - Financial Markets 2014