Mongolian Market Updates | June 30th

🌄 Good morning!

📬 Buckle up for this week’s essential roundup! From game-changing political moves to headline-grabbing economic shifts, last week was packed with action. And the week’s biggest headline? Mongolia has achieved a major milestone on the global stage, securing an upgrade in its OECD country risk classification—a move set to strengthen investment opportunities and boost the nation’s international reputation. Don’t miss out—keep reading for all the highlights and the stories everyone will be talking about!

🗞️ In this week’s issue:

• 2025 Budget Revision

• Mongolia Achieves OECD Country Risk Upgrade, Strengthening Investment Outlook

• CMM Market Update

• Market News

🟣 2025 Budget Revision

The Ministry of Finance has announced that government budget revenue is projected to decline by approximately ₮3.3 trillion by year-end. In response, the 2025 budget revision has finalized expenditure reductions of ₮2.1 trillion. Despite these measures, the budget deficit is expected to reach around ₮1 trillion for the year.

Key coordinated policy measures include:

1. 31% reduction in the structure of ministries and related entities, achieved by consolidating or eliminating overlapping departments to optimize organizational efficiency.

2. Resolution of land ownership issues, with 3,797 locations totaling 44,400 hectares to be registered as state property. Additionally, in 2024, 961.6 hectares will be allocated to 8,702 citizens across Ulaanbaatar and 114 soums in 18 provinces.

🟣Mongolia Achieves OECD Country Risk Upgrade, Strengthening Investment Outlook

Mongolia has been upgraded by the OECD in its country risk classification, moving from 7/7 (highest risk) to 6/7—marking a significant improvement in the nation’s credit profile and international standing. This rare upgrade, announced after the OECD meeting on June 27, 2025, comes as only three countries saw rating changes, with Mongolia as the sole country to receive an upgrade.

The new classification signals increased international confidence in Mongolia’s economic stability and policy management, paving the way for more favorable borrowing terms, lower financing costs, and enhanced opportunities to attract foreign investment. The improved rating is expected to benefit both the government and private sector by reducing the country risk premium, supporting private sector growth, and making Mongolian exports more competitive globally.

🟣 CMM Market Update

🏦 Development Bank of Mongolia successfully issues USD 240 million bond at 8.5% coupon
• The Development Bank of Mongolia has successfully issued a USD 240 million bond at an 8.5% coupon rate on the Vienna Stock Exchange.
• The bonds were offered at USD 98 per unit, with maturity set for July 3, 2028.
• Simultaneously, the bank announced a tender offer to buy back its previously issued USD 200 million bond, causing a surge in the bond’s market price.
• As of the latest update, the bank’s 11% coupon bond maturing on March 7, 2026, is trading at around USD 102 (2% above par value).

🌟 Netcapital ABS primary market offering launched
The primary market trading for Netcapital ABS’s open asset-backed securities (ABS) has commenced:
• Offering size: ₮30 billion
• Unit price: ₮100,000
• Coupon: 20% per annum (interest paid quarterly, principal paid semi-annually)
• Term: 24 months
• Underwriter: TDB Securities LLC
• Asset backing: ₮48.6 billion auto loan portfolio secured by fiduciary rights
• Subscription progress: Reached 84.51% on the first day of trading.

🌟 “Omni Asset II” ABS officially approved

On June 13, 2025, the Financial Regulatory Commission of Mongolia granted official approval to Omni Asset 2 SPE LLC to publicly offer ₮14 billion worth of ABS. This marks the third ABS issuance backed by Omni Capital NBFI LLC, through its wholly owned subsidiary Omni Asset 2 SPE.

Omni Capital previously raised ₮5 billion in 2022 and ₮6 billion in 2023 through its earlier ABS issuances, successfully fulfilling all interest and principal payments on time—building a solid track record of reliability and investor trust in the capital market.

“Omni Asset 2 SPE” LLC's publicly offered ABS offers a higher average yield compared to other publicly traded bonds and ABS’s while maintaining a low-risk profile. The issuer meets the Financial Regulatory Commission's prudential requirements and additional heightened financial criteria, positioning them as an attractive, high-yield investment for the public.

• Face value: ₮100,000 per unit

• Coupon: 19.2% /annual/, quarterly coupon payment

• Total number of securities: 140,000 units

• Total offering size: ₮14 billion

• Use of proceeds: To support the business expansion of the originator, Omni Capital NBFI LLC

• Underwriter: Apex Capital Securities LLC

• Primary listing: Mongolian Stock Exchange (MSE)

🟣Mark Your Calendars: CMM’s 2025 Signature Events!

We are excited to announce the dates for our flagship gatherings this year! Join us for the “Mining Week & MinePro 2025” in Ulaanbaatar (September 11–13), the “Mongolia Investment Forum: London” (October 14), and the “Mongolia Investment Forum: Singapore” (November 20). Each event brings together top industry leaders, investors, and innovators to explore new opportunities and drive growth in Mongolia’s capital markets. Stay tuned for more details — these are events you won’t want to miss!

🏛️ Market News

📈 [MSE:GOV] Gobi JSC to Establish Subsidiary in South Korea
Gobi JSC will set up a subsidiary, “Gobi Cashmere Korea,” in South Korea to expand its international presence. The new subsidiary will have a capital of KRW 100 million and will be managed by Board Member and CEO B. Amarsaikhan. In March, Gobi JSC also opened a new branch at Chinggis Khaan International Airport, bringing its network to 4 domestic and 2 international branches.

📈 [MSE:KHAN] Khan Bank Expands Loans for Women Business Owners
Khan Bank, the largest bank in Mongolia serving 82% of the population, is committed to sustainable development and gender equality. The bank plans to increase its loan portfolio for women business owners, aiming to expand financing to ₮3.3 trillion by 2028.

🟣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.