YOMA_STK_PRICE
Inspired by Myanmar's economic reforms, the market has transformed Yoma Strategic into a multi-bagger in the recent two months, climbing from 8 cents to 25.5 cents (market cap: S$134 million).

WITH THE economic slowdown in Singapore and China and the economic troubles in Europe and the US, market punters in Singapore have found a refreshing investment theme: Rapid development of third-world Myanmar.

Known as a Myanmar play, Yoma Strategic reported that its revenue for the half-year ended 30 Sep 2011 was from property and other investments in Myanmar. Its portfolio of development properties includes apartments, condominiums, semi-detached houses and bungalows.


In the current lack-luster stock market, the stellar performance of its stock has been cheering punters, having tripled to 25.5 cents in just the past two months -- the highest it has been in about 3.5 years. Yoma listed on the Singapore Exchange in Aug 2006.

One looks at its historic (trailing) price earnings of 22.6 times and thinks this is on the high side, but speculators are betting on a sustained earnings growth.

Pun-Hlaing-Golf-Estate
Trading in land development rights to Pun Hlaing Golf Estate has been lucrative for Yoma. Its value has been increasing due to the presence of a country club and an international school there.

Its 1H2012 revenue of S$13.2 million was a seven-fold increase year-on-year, mainly due to an increase in sales of housing and land development rights in Myanmar.

In recent months, property prices in semi-rural areas of Yangon have skyrocketed, in some cases by three or four times, as speculators anticipate that new industrial zones will be created on the city’s outskirts.

1H2012 net profit attributable to shareholders was S$4.1 million, compared to a loss of S$718,000 in the previous period.

Cash and bank balances stood at S$11.1 million as at 30 Sep 2011, multiplying by more than three-fold compared to S$2.5 million as at 31 Mar 2011. Borrowings were S$4.5 million.

Yesterday, Yoma announced a proposed interested party acquisition of land development rights to Star City, which is located in the Thanlyin Township 6 miles from downtown Yangon.

Star City will comprise of more than 9,000 units of apartments and houses, shopping and commercial areas on a total development area of about 135 acres.

The land development rights are to be acquired from SPA Group, a Myanmar group with diversified interests founded by Yoma chairman Serge Pun, who also owns 50% in Yoma.

Political reform sparks hope for Myanmar economy

So what is behind Myanmar’s real estate boom?


The second largest country in Southeast Asia, Myanmar had a reputation for reserving its best business opportunities, including lucrative contracts in jade mining, timber, and tourism, for well-connected businessmen whose backing helped strengthen the military regime that took power in 1962.

Hilary_Clinton_Thein_Sein
Secretary of State Hilary Clinton's meeting with President Thein Sein in Myanmar in Nov 2011 was ground breaking given the US sanctions on the third-world nation. Photo: Internet

Economists have said Myanmar will have to break that cycle and introduce more competition to be fully on the path to change.

After its new nominally civilian government came to power in Mar last year, it has moved in that direction, including breaking up import cartels, holding talks with dissidents such as Ms. Aung San Suu Kyi, and even risking the ire of China by blocking a US$3.6 billion Beijing-backed hydropower project that also would have benefited Myanmar businessmen.

An interesting development has been the acceptance of Myanmar’s candidature for the Chair of ASEAN in 2014 by all member countries.

A leadership role in a regional grouping which includes the two regional giants, India and China, can be a big plus for Myanmar’s foreign policy as well.

This brings the hope for a new surge of liberal reforms in rejuvenating Myanmar’s economy, which is presently hanging on tenterhooks.

In recent months, there has been an upward swing in Myanmar’s overall economic situation with its currency, the Kyat, becoming 25% stronger due to capital inflows since the beginning of 2010.

It is likely to become even stronger with the relaxation of economic restrictions on the country in the coming few months.

Foreign investments to the country have also increased substantially since 2009, and with more trading partners and less trade restrictions to and from Myanmar, commerce is expected to improve.

As case in point, real estate speculation in Yangon suburbs became rife after the government invited foreign investors to develop special economic zones in its campaign to alleviate poverty.


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Comments  

#4 C.C. Low 2012-02-07 18:42
Did the inevitable bubble burst at closing today (5.00 pm 7 Feb)? For most part of the afternoon yesterday, Yoma was hanging around 0.46 but suddenly shot up to close at 0.52 with very heavy volume of continuous buying. It opened at 0.53 in the morning and shot to intra-day high of 0.575, and like yesterday, for the most part was hanging around 0.56 until suddenly at 4.40 pm or thereabouts, there was continuous heavy selling down which plummeted its price to close at 0.435 ! Could the reason be (a) the contra period was up for some big time speculator?, (b) some other big time speculator was doing the reverse by shorting the counter?, or (c) perhaps some news or event that has not yet been released?. Whatever the reason, its share price has been subject to such sudden volatility both up and down, hardly making it an appropriate target for strategic investment.
#3 C.C. Low 2012-02-03 17:11
twitter - You are right. Like I said, it is purely a speculative play and not based on fundamentals. High risk = high payoff, so it may be Yoma could end up $6, but if the bubble burst it could also drop back to 0.06 where it was just a couple of months back.
#2 twitter 2012-02-03 10:32
as warren buffet say

So if you wait for the robins, spring will be over

or in this case YOMA will be a 6 dollar stock
#1 C.C. Low 2012-01-30 14:00
I think going into Yoma head on at this juncture is a little too premature. It still appears to be a speculative play at this time. The regime lacks track record in implementing economic reforms from the table to reality. Infrastructure has not yet been developed so if there is any development of industrial or residential sites they will be isolated clusters of pockets only. Those who bought into Malaysian properties when they were converting rural areas into suburban sites will understand what I am talking about. You can buy a property but there is no connecting roads that come with it. Neither are utilities that accessible either. So I reckon all this present play on Yoma is very speculative indeed. Once the government start a infrastructural program with the building of roads, provision of utilities, and other municipal supporting facilities will the potential be more ready to be plucked.

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