Yoma Strategic Holdings unaffected by Myanmar unrest for now

Property take up rates though might dwindle.

DBS Vickers noted that Singapore-listed Yoma Strategic Holdings, as well as other companies such as Sing Heng based in Myanmar's former capital, Yangon, are still observing business as usual with the unrest seeming to be contained in the affected townships. There is concern though that the caution and uncertainty caused by the episode will drag on property take up rates, with Yoma being one of the more vulnerable firms.

Here's more from DBS Vickers:

Violence has spread closer to Yangon; curfews, stronger policing and military helping to reinstate order. As violence spreads closer to villages 150km north of Yangon, the press has reported that authorities have imposed dusk-to-dawn curfews (18:00-6:00) in 3 more townships - Gyobingauk, Okpo and Minhla - following a state of emergency declared in Meiktila, the city where clashes were provoked by a small argument in a gold shop.

Yangon - business as usual, unrest looks to be contained. Our checks with Yoma, Sin Heng and other contacts based in Yangon reported no disruptions to their businesses in the city. Although onlookers fear that the upsurge might spread to Yangon, managements of the above companies expect the unrest to be contained. Our observation is that the situation has quietened in areas where the military has stepped in to restore order, leading us to believe that any escalation can be contained. It is unclear if there is a political agenda behind this unrest but deep seated tension between the Myanmar ethnic Burman Buddhists and Muslims dating back to colonial times, had been kept in check by the previous military regime. The political transition and liberalisation could have allowed some of these old fault lines to surface. The international community has urged the government to put an end to the violence. This remains to be seen.

Expect caution towards Myanmar proxies although actual impact yet to surface. Although there were no physical disruptions to assets and operations and long term prospects of Myanmar is intact, we feel that caution and uncertainty could drag on property take up rates, especially in the case of Yoma. Hence, we maintain our HOLD recommendation on Yoma and no change to TP of S$0.80.

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