Mongolian Market Updates | April 8th

🌄 Good morning!

Mongolia Emerges as a Strategic trade alternative amid U.S. tariff shifts and domestic financial developments.

🗞️ In this week’s newsletter:

• CMM Market Updates

• Monthly Market Update

• Market News

🟣 CMM Market Update

The United States has announced an updated set of import tariffs on goods from other countries, sending shockwaves through the global economy. Following the news, Asian stock markets turned red on April 4, with Japan’s Nikkei 225 falling by 2.77% and Hong Kong’s Hang Seng Index dropping by 1.52%.

In response to the looming threat of a trade war, China had already begun taking preventive measures by relocating some company operations to Vietnam in an attempt to avoid tariffs. However, the new tariff plan imposes a 46% rate on imports from Vietnam, making it less of a safe haven.

Among these developments, Mongolia stands out with only a 10% tariff imposed on its exports to the U.S., positioning the country as a potential alternative route to bypass China’s high tariffs. As of December last year, Mongolia exported $166 million worth of goods to the U.S., the majority of which consisted of unrefined or semi-refined gold. Chinese companies are increasingly attempting to circumvent U.S. sanctions and high tariffs—one recent example is the attempt to ship NVIDIA’s Blackwell chips to China via Vietnam, which was exposed. Now that Vietnam is also facing high tariffs, Mongolia’s relatively low tariff rate may present a new opportunity.

🟣 Monthly Market Update

Mongolian Market Update – March, 2025 edition is here.

This month’s highlights include:

🔺 Policy Rate Hike: Bank of Mongolia raises policy rate to 12% to combat 9.6% inflation 🏦 Banking Sector Growth: Loans +13.7% YoY, mortgage lending +23.8%
📉 MSE Indexes Dip: Market correction in equities with notable moves in Top 20 Index 💡 💡Fintech Milestone: LendMN becomes Mongolia’s first fintech to receive MFR Client Protection Certification

🟣 CMM Market Update

On April 3, 2025, the Mongolian Stock Exchange (MSE), in collaboration with the Mongolian Sustainable Finance Association (ToS) and the International Finance Corporation (IFC), held a training session for listed companies on ESG (Environmental, Social, and Governance) reporting. Although voluntary since 2022, ESG reporting will become mandatory from October 2024 for companies listed in the MSE's Category I. The training covered reporting methodologies, international best practices, and sustainability standards. As of April 3, 2025, 14 out of 26 Category I companies had submitted their ESG reports. The MSE is also working to distribute these reports to international investors via platforms such as Bloomberg and Thomson Reuters and is planning to develop a unified data platform.

🏛️ Market News

• Mongolian Government Returns to Domestic Market After 8 Years
  The Government of Mongolia plans to raise ₮10 billion in funding on April 16 through the Mongolian Stock Exchange, marking its return to the domestic market after an 8-year hiatus.

• Khan Bank Shares Drop 15% in One Day
  Khan Bank JSC experienced a sharp 15% drop in its stock price within a single day last week—the most significant fluctuation in the market. As Khan Bank represents 22% of the TOP-20 index alone, this drop had a substantial impact. The main reason is believed to be the end of the ex-dividend date.

🟣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.