December 14, 2017

Will stock market bring down property prices in Myanmar?

A stock market cannot be established overnight, let alone operated successfully. Myanmar has been trying to establish a stock market for a number of years, but it is still grappling with infrastructure and legal requirements. Therefore, it is unlikely that property prices will fall as soon as a stock market emerges in Myanmar. It will take a stock market some time to be fully operational.
On the other hand, there are a number of requirements that a company has to fulfill before listing on a stock market. It is sure that both stock exchange authorities and companies will have to take time while the public has to learn to understand its operations. Myanmar people are complete strangers to a bourse and simply think that if they invest in a stock market they will get profits. Actually, investing in stock is neither as simple as that nor as safe as depositing their money at banks or buying treasury bonds. They can enjoy a regular interest for their money at banks or on treasury bonds, but they will have to take risks investing in stock because they can get profits or lose their money there. If they do not understand the operations of a stock market, they might feel cheated when they lose their money. Stock market authorities are required to guarantee that they will monitor the stock market properly so that stock investors are not cheated.
Myanmar people do not trust banks as much as their counterparts in other countries and buying property is a much more lucrative market than others, including the future bourse, due to speculation. It is too early to say that the stock market will bring down property prices sooner or later.
Another factor to be considered is that property prices are rising in London where one of the biggest stock markets is located. The most likely scenario is that a property market bust will force people to rush to the stock market if they still have anything to invest. Clearly, it will be just an exaggeration of proponents of stock market where some people have opportunities to manage others’ money at relatively lower risks for their own.

Comments

Related posts

Translate »