Mongolian Market Updates | July 2, 2024

📰 Good morning,

The results of the 2024 Mongolian parliamentary election are in. The ruling party of the previous two elections, the Mongolian People’s Party (MPP) was able to take the majority of the seats in this election, cementing its position for another 4 years. Investors are unlikely to see immediate changes in the investment environment. It is expected that the previous government's policies will persist, supported by strong coal and copper exports benefiting the economy. However, a new coalition government might emerge as discussions are currently underway.

In this week’s newsletter:

• Compound Insights

• Mongolian Parliamentary Election

• Market News

• CMM Research

• MinePro 2024 event

💁🏻‍♂️ Compound Insights: An Update on Mongolian Capital Markets

During Mongolian Investment Week: New York, Khulan Bat-Erdene, CFA charter holder, joined the Compound Insight podcast at the CFA Society New York and shared insights on the Mongolian market.

You can listen to the episode here.

🏦 Market News

• Fitch Rating affirms a rating of ‘B’ Outlook Stable for Khan Bank JSC (MSE:KHAN) and Xac Bank JSC (MSE:XAC) also affirms a rating of ‘B’ to the Development bank of Mongolia.

• Erdenes Tavantolgoi JSC opens a coal concentration plant with annual capacity of 10 million tons. When the coal concentration plant is fully operational, Erdenes Tavantolgoi JSC will produce and sell an average of 24 million tons of products per year, earn 1.9 billion USD in sales revenue, and make a net profit of 197.3 million USD.

• The first-ever municipal “Ulaanbaatar” bond of MNT 500 billion has been issued and closed on the MSE. The capital city’s or Ulaanbaatar's administration successfully raised MNT 500 billion through this initiative, part of the capital city's 1.5 trillion bond issuance program aimed at raising funds from both domestic and international markets. This debt instrument offering was strategically structured with three distinct maturity periods and corresponding coupon rates. The details of the offering are as follows:

  - MNT 100 billion with a 1-year maturity at a 12% coupon rate

  - MNT 100 billion with a 2-year maturity at a 13% coupon rate

  - MNT 300 billion with a 3-year maturity at a 14% coupon rate

• TMK Energy, listed on the Australian Stock Exchange, will be able to drill 45 new production wells and 95 new exploration wells over the next 5 years.

• Mongol Basalt JSC (MSE:MBW) and Basalt Uzbekistan Group have started implementing a project to establish a modern basalt technology plant in Uzbekistan. The project involves an initial investment of $30 million and an initial production capacity of 45,000 tons per year.

🔔 CMM Research

Our market overview for June is out.

The market slowdown in activity continued this month compared to previous months. However, several significant events and news occurred this month that will impact the market and companies in the future.

• Trade: In the first 5 months of this year, total trade turnover reached USD 10.7 billion, while trade balance is positive USD 1.9 billion.

• Bond: As of June 30th, 2024, the total value of outstanding bond issues on the market stood at MNT 1.91 trillion, a 19% increase compared to the previous month.

• What to expect in July: The 14th Mongolia Economic Forum will be held at the State Palace of Mongolia, under the theme “Go Mongolia”, on July 8-9, 2024.

📢 MinePro 2024 📢

CMM will co-organize the MinePro 2024 International Quarrying and Mining Exhibition & Convention on October 10-12.

The "MinePro 2024" exhibition will feature various stakeholders including supplier enterprises, mining project owners, international investors, financial institutions, consulting services, technology providers, and other service providers.

This event will serve as a platform for knowledge exchange, strategic partnerships, and investment opportunities, with a specific focus on advancing sustainable mining practices and driving innovation in the Asian market. Together, we aim to promote mutually beneficial global partnerships among local mining companies, development agencies, and international and local financial organizations. For more detailed information about the event, please click HERE.

If you are interested in participating in the event, please click HERE to register.

🟣CMM Services

Capital Markets Mongolia (CMM) specializes in providing strategic advisory to public companies on optimizing investor relations (IR), as well as advising on upcoming IPOs, bond issuances, and effective participation in the capital markets with a focus on efficiency and reputation. Additionally, we undertake market research and provide financial PR services.