Early Tuesday trading saw further falls for MEGA, CBG, and OSP as investors still fretted over Myanmar’s decision to halt repayments of foreign loans due to a dollar crunch.
As of 10.38 hrs. local time in Thailand, the share price of Mega Lifesciences Pcl. (SET: MEGA) dropped THB0.75/share, or 1.58%, to THB46.75/share, with a trading value of THB152 million.
The share price of Carabao Group Pcl. (SET: CBG) dropped THB3.50/share, or 3.15%, to THB107.50/share, with a trading value of THB486 million.
The share price of Osotspa Pcl. (SET: OSP) dropped THB1.25/share, or 3.70%, to THB32.50/share, with a trading value of THB406 million.
According to local media, Myanmar’s central bank has ordered local businesses and banks to halt and reschedule repayment of foreign loans.
The order was issued by the central bank on July 13, according to Myanmar Now.
“According to foreign currency law and foreign currency management rules, the repayment of foreign loans including original and interest values should be suspended and licensed banks should rearrange with their customers … regarding repayment schedule,” the central bank statement said.
The central bank of Myanmar has urged ministries and local governments not to use foreign currencies for domestic transactions, and it has directed local companies to deposit and convert foreign currency at local banks within one working day.
Furthermore, the central bank has ordered borrowers with loans denominated in foreign currency to suspend repayment in order to reserve foreign currency reserves.
Kasikorn Securities suggested investors follow Thai companies investing in Myanmar. By collecting preliminary information, sector and listed firms that are doing businesses in Myanmar, KS found that the healthcare sector will see limited impacts, as most of Myanmar clients who receive treatment in Thailand frequently pay in kyat. However, it may impact travel traffic.
For beverage companies such as CBG and OSP, approximately 10% of their income comes from Myanmar. In the meantime, MEFA acknowledges approximately 75% of distribution business from Myanmar (35% total).