Wired News: Japan setting up Burme

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Subject: Wired News:  Japan setting up Burmese brokerage (Reuter)

    TOKYO, July 17 (Reuter) - A major Japanese stock broking firm said on Monday it plans to
set up a brokerage in Burma in cooperation with the Rangoon government to prepare for the
reestablishment of a stock exchange there after decades of anti-capitalistic rule.
    The announcement by officials at Daiwa Securities Co Ltd, Japan's second biggest
brokerage, and its unit Daiwa Institute of Research, came despite an appeal by Burma's
recently freed opposition leader Aung San Suu Kyi for foreign investors to wait for real
changes in the human rights situation before dealing with the military government.
    Daiwa officials said that while details had to be worked out, the Burmese Finance and
Revenue Ministry and the Daiwa group aimed to establish a joint house by the end of the
year.
    "The new house is to be established with the aim of taking a leading role in
over-the-counter trading (of Burmese companies) before Burma sets up a stock exchange,"
a Daiwa Institute of Research official said.
    Last November Burma signed a memorandum of understanding with the Institute on setting
up a stock exchange, privatising state-owned enterprises and developing a capital market in
Burma.
    "The plan to set up the joint securities house is in line with the agreement to cooperate with
Burma to set up the capital market there," the official said.
    Initial capitalisation of the venture would likely be about $3.6 million, he said.
    Burma's stock exchange was closed in the 1960s after a military takeover began a long
period of quasi-socialist rule. The current military government, which took power in 1988, has
tentatively implemented free-market reforms, but these have been hampered by foreign
criticism of its human rights record.
    Last week, Japan said it was thinking of resuming full-scale economic aid to Burma
following Rangoon's release on July 10 of 1991 Nobel Peace Prize laureate and opposition
leader Aung San Suu Kyi from six years house arrest.
    Japan stopped extending yen loans to Burma after the military suppression of a
pro-democracy uprising there in 1988.
    "Japan would like to offer its assistance to Burma as it takes steps to rebuild the country
with the understanding and cooperation of its people." Tokyo's Foreign Minister Yohei Kono
said the day after Suu Kyi's release.
    "We would like to discuss (yen loan) projects once they (Burma) are ready to do so," he
told reporters.
    On Friday, Aung San Suu Kyi urged foreign countries and investors to look for real changes
in Burma's human rights situation before putting money into the country and questioned why
Japan felt the need to hurry back in.
    Zenichi Ishikawa, director of the Daiwa Insitutute of Research, said how soon Burma could
develop a stock exchange "depends on development of its economy and democratisation
moves."
    "However, Burma is full of resources and has lots of potential for economic expansion," he
added.
    A researcher at the Japan External Trade Organisation (JETRO), a government-affiliated
agency, said the resumption of yen loans would encourage Japanese firms to invest in
Burma.
    In May, Tokyo resumed a full trade insurance programme for its companies involved in
trade with Burma.
 REUTER