Mongolian Market Updates | April 22nd

🌄 Good morning!

Bond Forum 2025' wrapped up last week, marking a successful conclusion to the event. "Explore the key highlights of the forum in this weeks edition.

🗞️ In this week’s newsletter:

• CMM Market Updates

• Market News

🟣 CMM Market Update

The Financial Regulatory Commission has eased investment criteria for companies listed in the Top 100 Enterprises, allowing them to raise capital in both public and private markets and issue securities more quickly. This reform consists of the following three main points:

• No requirement for a company valuation when issuing shares to the public

• Applications to issue shares or bonds must be processed within 10 working days

• For bond issuances of up to ₮5 billion in either the public or private markets:

  • No collateral or guarantee required

  • No mandatory underwriting agreement with an underwriter required

These updated procedures make it easier and more cost-effective for large companies to raise funds. However, for companies not included in the Top 100, financing through means other than loans remains limited. If large firms continue to grow while smaller ones struggle, market monopolization will eventually become inevitable.

🟣 CMM Market Update

Last week, the Mongolian Stock Exchange began gathering feedback from participating organizations regarding the trading of certificates of deposit on the open market. In 2024, amendments to the Securities Law established a legal framework for trading CDs in the public market. In February of this year, the “Procedure for Registering, Trading, and Reporting CDs to be Traded on the Securities Market” was approved. Currently, the process of collecting input from market participants is ongoing. Once finalized, this initiative will introduce a low-risk, fixed-income investment instrument for investors.

🏛️ Market News

• MGL Aqua JSC presented its capital expenditure report for the first quarter of 2025. Last year, the company became publicly listed and raised ₮15 billion from the market. Their planned use of funds was as follows:

  • 39.8% to open a factory in a rural area

  • 29.5% for a large-packaging production line

  • 27% for working capital

  • 3.6% to purchase a transformer

  Actual expenditures to date include:

  • ₮4.1 billion for raw material purchases

  • ₮4.5 billion for equipment procurement

  • ₮550 million for an electric transformer

  • ₮3.7 billion temporarily invested in highly liquid securities

  • Remaining cash of ₮2.4 billion is currently held in the company’s bank account

• Gazar Shim JSC also disclosed their capital utilization report last week. The breakdown is as follows:

• Last week, the primary market auction for government bonds was successfully conducted. Demand for short-term bonds was 4.6 times oversubscribed, while demand for mid-term bonds was 4.2 times higher than the offered amount. As a result, the weighted average yield was set at 9.466% for short-term bonds and 10.477% for mid-term coupon bonds.

🟣CMM Services

Capital Markets Mongolia (CMM) specializes in providing strategic advisory to public companies on optimizing investor relations (IR) and 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.