Myanmar: first-mover advantage?
It is not often new countries open up to international banks. Nine lenders have recently received licences to operate in Myanmar. It gives them a ready advantage in a country that lacks some basic infrastructure.
The prospect of a new geographic frontier in the investment banking industry is a rare thing indeed these days. Most markets have long ago been discovered, explored and settled by an industry keen to advise on capital raisings, asset purchases or money management. So it is understandable that the opening of Myanmar to the outside world is viewed as a rare and exciting opportunity within the Asia-Pacific region.
The watershed moment came at the beginning of October, when Myanmar gave preliminary approval for foreign banking licences to nine overseas firms. While the exact terms of the individual licences are unknown, it is understood that the banks have primarily been instructed to service only foreign firms operating in the country. What is less clear, however, is whether those licensed banks are now in pole position to snap up mandates for any future equity listings, bond issuance and M&A activity in the newly open Myanmar.
“Not having a licence does not stop you getting bond deals, but if you are pitching to the sovereign, they are going to look with a kind eye on those who have one,” says one senior DCM banker based in Asia-Pacific, whose bank does not have a licence in Myanmar.