The market went into a flash panic yesterday after the report of Myanmar’s central bank issuing an order on local companies, including banks to suspend and reschedule foreign loan repayments as its foreign reserve dwindled.
As a border trade partner, Thailand has numerous businesses in Myanmar in which it is allowed in baht and yuan currency along the borders, though a Thai company established in Myanmar will require a permission from the Central Bank of Myanmar to pay its debt in foreign currency.
Finansia Syrus Securities (FSS) stated that Myanmar suspends foreign loan payments and imports of some non-necessity items. However, it still allows payments by baht and yuan along its borders. Recently, the Myanmar government imposed several trade barriers, triggering negative sentiment that pressured stocks with businesses in Myanmar, such as OSP, CBG, TVO, and MEGA. However, FSS expected them to see limited impacts. OSP has about 8-10% of its revenue from Myanmar, with sales in Kyats. Also, it has a factory with US$20mn debts. CBG earns 10% of its sales from the country in baht currency, while TVO has only 1%. It sells them to a company in Singapore, which handles all payments. MEGA makes sales in Kyats but can increase its prices per its U.S. dollar- denominated contracts. Also, it does not have any debt in U.S. dollars. Therefore, FSS stated that it viewed the falling of share prices as an opportunity to buy.
