🌄 Good morning!

📬 This issue highlights key political, economic, and capital market events from last week. We cover government updates, new policy discussions, market performance, and the latest company news shaping Mongolia’s investment environment.

🗞️ In this week’s edition:

• Results of the Speaker of Parliament visit to Geneva

• Tax reforms and pension indexation

• CMM Market Update

• Market News

🟣 Visit of the Speaker of Parliament to Geneva

Mongolia’s Speaker of Parliament, D. Amarbaysgalan, attended the 6th World Summit of Speakers of Parliament in Geneva, holding official meetings with Ms. V.I. Matviyenko, Chairwoman of Russia’s Federation Council, and Mr. Woo Won-shik, Speaker of South Korea’s National Assembly. The talks focused on strengthening bilateral ties, energy cooperation, and joint infrastructure projects.

🇷🇺 Energy Security with Russia:

Despite Russia’s decision to halt gasoline exports for one month starting August 1, both sides confirmed that energy and fuel supplies to Mongolia will continue uninterrupted. This agreement is key to ensuring domestic market stability and mitigating price volatility.

🇰🇷 South Korea to Support the Heating Plant Project

Mr. Woo Won-shik, Speaker of the National Assembly of South Korea, expressed his commitment to bringing the “construction of heating plants in 10 provincial centers” project back on track and ensuring its successful and timely implementation.

He also noted that South Korea is exploring measures to facilitate travel for Mongolian citizens, including the introduction of e-visas, increasing the number of consular staff at the embassy, and improving visa procedures for group travelers.

🟣 Legislation and Economic Reform

🪙 ‘Gold-3’ Campaign and Legislative Amendments:

The President of Mongolia partially vetoed the Parliament’s resolution to implement the ‘Gold-3’ campaign, citing the need to expand specially protected areas and align with constitutional requirements.

💼 🧓🏻👵🏻 Tax Reform and Pension Indexation:

In response to public demand, the Ministry of Finance and Parliament are pursuing comprehensive tax reforms aimed at improving the investment climate, reducing the tax burden on citizens and businesses, and promoting a fairer tax distribution, especially among high-income earners.

In addition, pensions are now indexed to annual inflation by law, a policy the government reaffirmed will be consistently maintained going forward.

2026 Budget Outlook:

Finance Minister B. Javkhlan emphasized that the 2026 budget will not exceed the limits set by the revised 2025 budget. With ongoing commodity price volatility, the government is committed to strict fiscal discipline.

The 2026 budget is being positioned as the “Year of Human Development and Education,” focusing on protecting the most vulnerable segments of society. Operating expenses will be capped at 25% of total spending, and there will be increased emphasis on private sector participation and improving the business environment.

🟣 CMM Market Update

📈 Oyu Tolgoi LLC Sets New Production Records

Oyu Tolgoi LLC reported record copper and gold production in Q2 2025, driven by both underground and open-pit operations. For the third consecutive month, output exceeded previous records, reflecting strong operational momentum.

Key highlights:

• Copper in concentrate reached 86,800 tonnes in Q2, up from 65,200 tonnes in Q1, fully meeting operational targets.

• Gold in concentrate rose sharply to 97,500 ounces (Q1: 61,500 ounces), attributable to higher ore grades in the current mining sequence.

• The new conveyor system for transporting ore from underground to the surface was officially commissioned, boosting daily throughput to a peak of 47,000 tonnes in April.

Outlook:

Oyu Tolgoi is expected to maintain this production momentum throughout the second half of 2025, in line with its strategic plan.

📉 Securities Sector: Market Activity Down 63% in H1 2025

During the first half of 2025, total trading volumes among Mongolian securities companies dropped 63% year-over-year, indicating a significant slowdown in market activity.

Main causes:

Primary market stagnation: No IPOs were conducted, and issuance of new bonds and asset-backed securities was limited, resulting in sharply reduced trading volumes. Even government securities were traded at much lower volumes (down ₮1.1 trillion, or 91% YoY).

Secondary market trends: Although secondary trading of corporate bonds and ABS increased, overall trading in equities and investment funds declined by 30% (₮96.7 billion), as share price growth slowed, affecting company valuations.

Notable performers:

Golomt Capital LLC led the market with ₮120.6 billion in trades, accounting for 20% of total volume, though down 12.1% YoY.

Tenger Capital LLC recorded the fastest growth, with trading volumes up 1,636% YoY, entering the market’s top 10.

Market Outlook:

Declining activity and liquidity are challenging investor confidence. The H1 results highlight the need for new IPOs, market incentives, and regulatory reforms to re-energize the market.

🏛️ Market News

💼 [MSE:GOV] Gobi JSC Schedules September 8 Extraordinary Shareholders’ Meeting (EGM) to Consider Conversion to LLC and New Bylaws

Shareholders eligible to participate must be registered by August 18. Currently, Tavan Bogd Holdings LLC owns 87.3% of the company, with the remainder held by minority shareholders and employees. The company has not declared dividends since 2018.

📉 [MSE:TTL] Tavantolgoi JSC’s Financial Performance Slumps

Tavantolgoi’s financial performance saw a sharp downturn, with H1 sales revenue falling 61.8% YoY to ₮198.1 billion, due primarily to lower coal prices and sales volumes. Net profit dropped 70% to ₮64.1 billion (EPS: ₮1,218.2). The stock price has declined 17.9% year-to-date, closing at ₮27,900.

📈[MSE:APU] APU JSC’s share price surpassed ₮1,000 for the first time in six months, reaching ₮1,006

2025 first half year’s net profit stood at ₮97.6 billion, down 9.5% YoY. Nonetheless, the Board approved a ₮65 per share dividend, resulting in a dividend yield of 6.6% based on the closing share price. The company maintains a tradition of distributing dividends twice annually.

🟣CMM Services

Capital Markets Mongolia (CMM) advises publicly listed companies on effectively engaging with investors, defining optimal strategies for IPOs and bond issuances, and participating in the capital market in a reputable and efficient manner.