It Is Almost A Dead End Anyway

Possibility 1==> > Never Win

Share price straight away go down to test $0.30. Might stuck there for another few years due to:

1) Singapore property market cooling down

2)SG Gov revamping construction industry to improve efficient ==> > A tough and costly process that is going to cause a number of construction firms to fail

3) A lack of development opportunity in SE-Asia in the short run (1-2 years), as fund flow back to developed countries in seek of temporily better risk-return ratio. Less supply of fund=> higher interest rate=> projects become more expensive and thus less often.

Possibility 2 ==> > Win

Risky deal as Myanmar's quest for Democracy is a going to be a very rocky one. 2 signifcant risk factors that could jeopardies Myanmar's determination:

In the short run (1-2years), the exit of fund from Asia is going to cause some diruptions in the Asia's economies and might lead to more serious threats- depreciation of asia currencies, flight of captial. Simply put, 1997 Aisa currency crisis might repeat itself. To fend off the potential currency attack, developing nations like Indonesia and Phillipine have been working hard to input measures ever since the start of first Fed's QE. However this is not true for Myanmar, which has been recieving much attentions and FDI in the recent years. Thus Myanmar, in my opinion has high risk of suffering economic failure in the event of fund flowing out from Asia. The resulting economy hardship would damage Myanmar's determination toward democracy.

In the longer run (3 years and above), there is still a risk that democracy might be stopped due to politcal pressures from the local rich and powerful groups. Myanmar has been too quick in opening up its economy and trade. Economic theories told us that trade lead to reallocation of resources(wealth) and power among different group in the country- in this case, wealth flow from rich to the poor. With this, we can foresee the richs in Myanmar will quickly lose their interest. Meanwhile the interest-group theory forecast that the few rich people in the country will benefit at the expense of the many poor in the country. Thus this give rise to the risk that the riches might pressure the government to give up democracy and the riches will most like get their way. Do remember that true power still lie with the military at this point in time.

The above mentioned 2 risks would threaten Myanmar's quest for democarcy and Yongnam project. Should the country gave up and return to its previous state, Yongnam's property in the country would most probably be nationalised or fail to recieve payment for the project.

Due to these reasons, I deemed Yongnam's prospects as bleak and divested it a couple of days ago. Just sharing my view here, email me rosesyrup123@yahoo.com if you have something to share with me. Thanks.

 

Author: Rosesyrup