🌄 Good morning!

📬 Wishing you a productive start to the new week. In this edition, we bring you a concise roundup of last week's key developments in politics, the economy, and the stock market. May the days ahead be filled with insights and new opportunities!

🗞️ In this week’s edition:

• President Khurelsukh’s official visits to the Republics of Kyrgyzstan and Tajikistan

• Draft laws to be discussed during the Parliament’s autumn session

• Inspection of “Erdenes Tavantolgoi” JSC

• CMM Market Update

• Market News

🟣 President Khurelsukh Conducts State Visits to Kyrgyzstan and Tajikistan

President of Mongolia, Khurelsukh undertook official state visits to the Republic of Kyrgyzstan from July 20 to 23, and to the Republic of Tajikistan from July 23 to 26, 2025. During his visits, President Khurelsukh held high-level talks with the Presidents of both countries, strengthening diplomatic relations and exploring avenues for bilateral cooperation.

Kyrgyzstan and Mongolia Established “Comprehensive Partnership”

President Khurelsukh concluded a successful state visit to the Kyrgyz Republic, during which the two Heads of State signed a joint declaration establishing a “Comprehensive Partnership” between Mongolia and Kyrgyzstan. With this, Kyrgyzstan becomes the second Central Asian nation to form such a partnership with Mongolia.

🖋 Key outcomes of the visit:

• Agreement to jointly develop the Bishkek–Ürümqi–Ulaanbaatar highway corridor

• Mutual recognition and exchange of driver's licenses

• Supply of wool and cashmere under the “White Gold” initiative

• Plans to build joint facilities for meat, leather, and wool processing

• Expansion of yak and goat exports, and vegetable trade

• Establishment of the “Mongolia-Kyrgyzstan Education and Cultural Center”

• Collaboration between Mongolia’s “Billion Trees” and Kyrgyzstan’s “Green Heritage” initiatives

• Creation of the “Mongolia-Kyrgyzstan Friendship Grove”

A business forum with over 150 companies, a “morin-khuur” (horsehead fiddle) concert, and a photography exhibition were also held, culminating in the launch of a Mongolia-Kyrgyzstan Business Council.

Mongolia-Tajikistan Relations Reach New Heights

During President Khurelsukh’s state visit to the Republic of Tajikistan, he held official talks with President Emomali Rahmon. Both sides agreed to strengthen cooperation across all major sectors.

🤝 Key agreements signed:

• Joint declaration on “Friendship and Expanded Cooperation”

• 11 memoranda covering energy, agriculture, industry, digital development, culture, education, and tourism

• Integration of Mongolia’s “White Gold” initiative with Tajikistan’s cotton and textile sector

• Business forum held and agreement to establish a Business Council

• Collaborative projects between the Chinggis Khan Museum and Tajikistan’s National Museum

• Coordination of Mongolia’s “Billion Trees” with Tajikistan’s “Two Billion Seedlings” initiative

• MoU on digital development and information technology

These visits marked a historic step toward strategic regional cooperation, with lasting implications in trade, education, digital innovation, and environmental sustainability.

🟣 Parliament to Discuss 39 Laws in Autumn Session

The Autumn Session of Mongolia’s Parliament will begin on September 15, 2025, with 39 draft laws and resolutions on the agenda. Key focus areas include the 2026 budget, human rights, tax reforms, social welfare, transparency, environmental protection, education, and science.

🔑 Highlights:

• 2026 State Budget and related budgets for Social and Health Insurance, and the Sovereign Wealth Fund

• Monetary policy guidelines

• Revised laws on human rights, freedom of the press, and peaceful assembly

• Governance and transparency reforms for state-owned and local enterprises

• Ulaanbaatar’s General Development Plan through 2040

• Laws on livestock insurance, food safety, and benefits for mothers of multiple children

• Tax reforms including VAT and excise tax amendments

• Changes in education, science, and digital development policies

This legislative session is expected to shape economic and social policy while reinforcing democratic principles and accountability.

🟣 Government Orders Full Review of Erdenes Tavantolgoi JSC Contracts

🔍 The Government of Mongolia has decided to conduct a comprehensive review and audit of Erdenes Tavantolgoi JSC’s operations, including a contract-by-contract examination of all agreements signed by the company.

⚖️ Each contract will be assessed for compliance and fulfillment. Should any violations or illegal actions be identified, the matters will be referred to the appropriate law enforcement authorities.

🚛 This decision follows major disruptions at the company’s coal loading terminals and a severe shortfall in its 2025 export target. Although the company aimed to export 10 million tons of coal in the first half of the year, only 145,000 tons were actually shipped.

🛡️ As part of the government’s intervention, a three-month Special Oversight Regime has been imposed, and a Council of Authorized Representatives has been established to supervise the company. Preliminary estimates from the council suggest that, if reforms are implemented effectively, the company’s revenue could increase by 23%, and coal exports by 13%.

🟣 CMM Market Update

📈 Where Are Prices Rising the Most?

On July 22, 2025, the National Statistics Office of Mongolia released economic and social indicators for the first half of the year. As of June 30, the country’s inflation rate stood at 8.2% compared to the same period in 2024.

💸Average price increases:

• Services sector: +16.9%

• Goods: +5.4%

📊 Detailed inflation by category:

• 🏠 Housing, utilities, electricity, fuel: +21.0%

• 🎓 Education services: +18.2%

• 💳 Insurance and financial services: +15.3%

• 🏨 Hotels, restaurants, accommodation: +12.1%

• 🛍 Other goods and services: +10.7%

• 👕 Clothing, footwear, basic goods: +9.1%

• 🍞 Food and beverages: +5.6%

• 🚌 Transportation services: +4.3%

• 🚬 Alcohol and tobacco: +3.7%

• ✉️ Communications and postal services: 0%

The most rapid price hikes were seen in essential service sectors such as housing, education, healthcare, finance, and public services — significantly increasing the cost of living for households.

📉 Exports Down $1.3 Billion; Imports Continue to Rise

In the first half of 2025, Mongolia’s total foreign trade volume reached $12.1 billion. Exports amounted to $6.6 billion, down $1.3 billion or 16.6% year-on-year — a major economic red flag.

Main contributors to export decline:

Main contributors to export decline:

• Coal: ↓ $2.1 billion

• Washed cashmere: ↓ $148 million

• Crude oil: ↓ $31.4 million

• Mutton: ↓ $24.3 million

  👉 Copper concentrate was the only major product that grew: ↑ $897.9 million

📈 Imports Increased to $5.5 Billion

Total imports rose 2.8%, or $150.1 million, compared to the previous year.

📦 Top growing imports:
🚗 Passenger cars: $207.6M (↑ 47.1%)
🚚 Vehicle parts and accessories: $22M (↑ 67.1%)
📱 Smartphones: $15M (↑ 21.9%)
🥤 Alcoholic beverages: $14.5M (↑ 49.8%)
🛠 Stone-crushing machinery: $10.4M (↑ 13.7%)
🛻 Truck imports declined 13.2% to $44.3M

📌 Takeaway: The export slump reflects weak performance in Mongolia’s traditional commodities — particularly coal and cashmere. Meanwhile, rising imports signal strong domestic consumption, especially for vehicles, electronics, and consumer goods.

🇰🇷🤝🇲🇳 Mongolia to Use Busan Port as New Trade Gateway 

South Korea’s Busan Port Authority has formally agreed to cooperate with Mongolia to open a new logistics route for Mongolian-bound cargo through Busan — providing an alternative to the existing Incheon corridor.

🇲🇳 Mongolia’s Consul in Busan, Jadambaa Ts., proposed the initiative in meetings with port officials. With foreign trade and cargo volumes rising, the new route aims to enhance logistics efficiency and reduce transport risks and costs.

🚢 Why Busan Port Matters:

• Connects to 150+ countries and 500 ports

• Handles 400 million tons of cargo annually

• Ranked 6th in the world for container throughput

• Among the top 2 in transshipment logistics

• Serves as a strategic logistics hub for Northeast Asia

🔄 Benefits for Mongolia:
The Busan route would offer faster, cheaper shipping from Europe and the U.S., diversify Mongolia’s trade access, and strengthen logistical reliability.

🏛️ Market News

📈 [MSE:XAC] XacBank and Tenger Financial Group to Merge

Mongolia’s Financial Regulatory Commission has approved the merger of Tenger Financial Group LLC into XacBank JSC, making Tenger shareholders direct shareholders of XacBank. This merger makes XacBank the first systemically important bank to meet the legal requirement of not having any individual shareholder own more than 20%.

📈 [MSE:MSE] Mongolian Stock Exchange Fully Deploys Raised Capital

Mongolian Stock Exchange JSC (MSE) announced the full utilization of the ₮11.9 billion it raised in its December 2022 public offering. The funds were allocated as follows:

• 63.7% – System upgrades for trading infrastructure

• Remaining funds – Cybersecurity, internal digitalization, and a new training and information center

🟣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.