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Myanmar is open for business, but investors wait

Investor Mark Mobius says that two things need to happen before investors pour into Myanmar.

Myanmar open for investment but businesses waitEnlarge
US Secretary of State Hillary Clinton shakes hands with Myanmar President Thein Sein before a meeting in Siem Reap on July 13. Clinton met with Myanmar President Thein Sein for landmark talks days after Washington eased its sanctions on the once-pariah state. (Brendan Smialowski /AFP/Getty Images)

President Obama has finally authorized American companies to invest in Myanmar.

For the first time in 15 years, companies like General Electric and Chevron that have been aching to tap the energy-rich nation's resources will be able to do just that.

But the process isn't going to be as easy as all that.

Mark Mobius, investment guru and executive chairman of Templeton Emerging Markets Group, told Business Insider that the key now is a credible banking system and a currency regime that allows investors to put money in the country:

"Up until now, the currency has been very much controlled. And in that case, the fluctuations in the currency rates make it difficult for investors to invest. 

In the case of direct investors, people who are not involved in capital markets, it's not a problem, because you've got a situation where you can pay in money and take up a view that you are going to be able to convert it at some time in the distant future.

In the case of portfolio investing — investing in the stock market — it becomes more problematical, because in that case, you've got the problem of – if you're running open-ended funds like we do, we have to be able to get money in and out of the country on relatively short notice.

So, we don't want to have currency controls or some problem in getting money out. So, that I think is the big challenge that they face."

That being said there are the three sectors he thinks are most interesting in Myanmar:

"The obvious one would be tourism. That includes hotels, anything to do with food services, restaurants, anyone supplying those kinds of goods.

The second area would be mining because there is a lot of potential for mining in the country, particularly when it comes to gems. As you know, Myanmar is one of the largest sources of jade in the world.

Already there have been substantial investments by Thai companies in the oil and gas sector. So, that would be another area."

Transcribed by Matthew Boesler.

 

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Original Source URL: 
http://www.businessinsider.com/mark-mobius--investing-in-myanmar-2012-7

http://www.globalpost.com/dispatch/news/business/120717/myanmar-open-business-investors-wait