Friday, November 13, 2015

Elections in Myanmar to boost economy



From being the second-wealthiest country in all of Southeast Asia under the administration of the British, Myanmar has fallen a lot. So much that was recognized as one of the least developed countries by the UN in 1987 due to its economic bankruptcy.

Many attributed Myanmar’s historical downfall to the 1962 military coup which paved the way for the infamous plan referred to at the time as the “Burmese Way to Socialism.” By planning to nationalize all industries apart from agriculture, this scheme turned the once-wealthy country into one of the world’s most impoverished.

However, all of this has changed for the better. Elections in 2010 removed the 50 year military government rule, leading to what many called “the opening” of the country to foreign investment as well as some of the most sustained economic growth Southeast Asia has ever seen. A major driving force behind the economic uplift was the lifting of sanctions by countries around the world.

Myanmar is one of the fastest growing economies in the world and is starting from a small base. It has great demographics and foreign investment is pouring in and has years of growth ahead of it. It is a place where you put money and in ten years you will have huge returns. I am using Yoma Strategic Holdings as my investment vehicle. Yoma reported earnings yesterday and they were down quite a bit on real estate sales. The management said that people were holding off on real estate purchases until the election was over. The election is over and the NLD won a land side victory and will control both houses and the Presidency. This is considered a positive by foreign observers and investors. I would note that all of Yoma's other businesses; the KFC franchises, tourism, and ag equipment sales are all performing very well. I continue to like the company long term. 

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