👋 Hello!

📬 Here’s your recap of last week’s key political, economic, and capital market events.

🗞️ In this week’s issue:

• Mongolia and China Target $20 Billion in Trade

• Public Investment in the 2026 State Budget Capped at ₮9.6 Trillion

• Steel Industry Complex Project Requires $412.2 Million

• CMM Market Update

• Market News

🟣 Mongolia and China Target $20 Billion in Trade

On August 14, 2025, Mongolia’s Deputy Prime Minister S. Amarsaikhan met with Shen Minjuan, Ambassador of China to Mongolia, to discuss strengthening bilateral relations and cooperation.

During the meeting, it was highlighted that the natural gas pipeline project from Russia to China will extend over 950 km across 6 provinces and 22 soums of Mongolia, representing a major infrastructure development of national significance.

Ambassador Shen Minjuan agreed that representatives of the 3 countries involved in the pipeline project should hold in-person meetings for direct consultations.

Key issues discussed included:

• Increasing the trade turnover to $20 billion in the near term by diversifying product categories and expanding exports of agricultural and livestock products,

• Boosting bilateral trade,

• Organizing the 5th “Mongolia–China Expo”,

• Increasing coal exports,

• Supporting business enterprises,

• Expanding cooperation in emergency and disaster management,

• Developing border tourism and upgrading border checkpoint capacity.

🟣 Public Investment in the 2026 State Budget Capped at ₮9.6 Trillion

Mongolia’s 2026 draft state budget emphasizes citizen participation. A nationwide survey, conducted under the President’s order, received over 154,000 proposals.

When presenting preliminary results to Cabinet members, Senior Advisor to the Prime Minister B. Davaadalai noted that the majority of citizens emphasized:

• Reducing excessive budget expansion (18,395 respondents),

• Lowering tax rates (over 102,000 respondents),

• Directing resources toward healthcare, education, electricity, and heating sectors.

Finance Minister B. Javkhlan stated that “public investment in the 2026 budget will be prioritized within ₮9.6 trillion. He also instructed sector ministers to urgently develop policies for reforms in education and healthcare.

🟣 Steel Industry Complex Project Requires $412.2 Million

Under a government resolution and Prime Minister’s directive, a working group has been established to get an approval of the feasibility study (FS) and select investors for the “Industrial Technology Park” in the Darkhan–Selenge region, which includes a “Steel Industry Complex.”

The working group, led by Deputy Prime Minister and Minister of Economic Development N. Uchral, held its first meeting yesterday to present initial proposals.

The project is expected to generate significant socio-economic benefits once operational. Accordingly, the revised feasibility study will be finalized, and the contractor selection process will be completed by Q3 2025.

🟣 CMM Market Update

Umnugovi Province Secures Approval to Issue ₮500 Billion Bond for New Combined Heat and Power Plant

On August 13, 2025, the Cabinet authorized the Umnugovi provincial government to issue up to ₮500 billion in domestic bonds, in phases, to finance a 50 MW combined heat and power (CHP) plant in Dalanzadgad.

Governor N. Enkhbat and Finance Minister B. Javkhlan were instructed to include the bond issuance in the annual state budget, ensure proper allocation of funds, and guarantee timely repayment from the provincial budget.

Electricity demand in Dalanzadgad has been rising sharply — peak load grew 11.3% year-on-year in 2023, and total consumption is projected to nearly double from 59.2 million kWh in 2023 to 105.8 million kWh by 2033. The existing 9 MW plant generates only 30.6 million kWh, with the shortfall currently supplied by Mongolia’s national power grid, operated from Ulaanbaatar.

The planned 50 MW CHP plant will not only meet Dalanzadgad’s growing demand but also reduce dependence on the national grid, ease regional electricity bottlenecks, and support mining, tourism, and local infrastructure development.

This marks the first time a province has raised financing through domestic bond issuance—a historic milestone.

Erdenes Tavan Tolgoi JSC's Coal Sales Surge, Adding $210 Million to Mongolia’s Foreign Exchange Reserves

On July 9, 2025, the government placed Erdenes Tavan Tolgoi JSC under special administration for 3 months, appointing a team to oversee operations. The focus areas are mining, transport, sales, and organizational improvements.

Key highlights:

• Coal sales via the exchange rose from 132.8k tons in June to 268.7k tons in July, doubling within one month.

• Hard coking coal prices at Gantsmod border surged from CNY 700 to CNY 1,000 per ton in early July.

• The company generated $210 million in the first 10 days of July–August, significantly contributing to foreign reserves.

• In H1 2025, 20 of 85 open e-auctions succeeded, selling 1.3 million tons. From July to August 11, 23 auctions sold 1.4 million tons—reflecting improved trading mechanisms.

🏛️ Market News

📈 [MSE:KHAN] Khan Bank’s Market Cap Rises by ₮45.89 Billion to ₮2.25 Trillion

Khan Bank’s share price reached MNT 1,179—the highest in 4 months. Trading data shows 0.9% of trades were by foreign investors and 99.1% by domestic investors.

Primary Issuance of Government Securities on August 20, 2025

The MSE will host a primary market offering of government securities totaling ₮8.0 billion. Two instruments will be issued: a 52-week discounted bond and a 5-year coupon bond, both with a face value of ₮100,000 per unit.

[MSE:BRC] Barilga Corporation Cancels Shareholders’ Meeting

Barilga Corporation JSC announced the cancellation of its scheduled shareholders’ meeting, which was to decide on transforming the company into an LLC. The meeting was canceled due to insufficient participation from minority shareholders (19 individuals holding 1.4% of shares).

📉 [MSE:TUM] Tumen Shuvuut Shares Drop to Lowest Level Since October 2024

Tumen Shuvuut JSC’s share price declined -0.58% to close at ₮349.13, marking its lowest level since October 2024. The company reported ₮43.2 billion in revenue and ₮7.29 billion in net profit for H1 2025.

🟣CMM Services

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