January 12, 2018

In Dec 2017, the Ministry of Construction in Myanmar issued rules for the Condominium Law that will open up the local property market to foreign buyers, allowing them to buy up to 40% of completed units on any floor of a condominium block under the new rules. Foreigners will also be permitted to develop property, subject to approvals and project requirements. While these rules are intended to foster greater vibrancy in the local property market, concerns still remain. According to Colliers International, future condominium supply in Yangon should remain substantial with more than 10,000 units currently in the pipeline. The estimated completed stock is also expected to double in the next two to three years. 9M17 witnessed a slight improvement in demand following extensive pricing promotions for many projects, with discounts reported to be in the 30%-40% range, but questions arise regarding the sustainability of this approach. We maintain our HOLD rating and our fair value estimate of S$0.55 by OCBC Investment Research. Share price closed at S$0.525