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Greetings from the coldest capital in the world! Ulaanbaatar is now enveloped in a beautiful white blanket of winter. Just a reminder, there are only 72 days left until 2025! How are your plans for 2024 shaping up? 🧐

Today’s newsletter in 3 sentences…

• 🟢 Khan Bank’s “Green Bond” investor

• ⛏️💪 Mining Giants' Performance

• 🆘 Alarming Business Downtime in Mongolia

Let’s dive deeper 🔥

MARKET

• ADB: The Asian Development Bank (ADB) invests $12.5 million in Khan Bank's (KHAN) $25 million 'Green Bond' issuance. 

• MSE: TML Plastic to Issue Green Bond on the Mongolian Stock Exchange (MSE) with a Nominal Value of $100, Offering 10% Annual Interest and a 3-Year Maturity. 

• MRT: In 4 years, Mongolia to Build 5 vertical and 3 horizontal corridors connecting Asia and Europe, featuring fully paved highways and 15 exits to its 2 neighbors.

⛏️💪 Mining Giants' Performance

So far, mining companies are the only firms traded on foreign exchanges from Mongolia. Let’s examine their performance over the past year.

📈 Annual Growth: 76%

Share prices of four companies led by Mongolian Mining Corporation (0975.HK) and Energy Resources, which focus on coking coal, increase by an average of 76% over the past 1 year and 46.2% year-to-date. Among these mining giants, MMC’s shares lead in growth, with the amount of raw coal mined by the company in the third quarter increasing by 23% compared to the previous year, reaching 4.3 million tons.

• 🫨 Rocky Road: Shares of Xanadu Mines (XAM.TO), a co-developer of the Kharmagtai copper-gold project, fall since late November 2023 but rebound since April this year. In addition to rising gold prices, the preliminary feasibility study of the Kharmagatai project indicates that the mine has a lifespan of 29 years, with an average annual production of 75,000 tons of copper and 165,000 ounces of gold.

• 💪 High Growth: The stock price of Erdene Resource Development Corporation (ERD.TO), dual-listed on the Mongolian Stock Exchange (MSE) and the Toronto Stock Exchange, grows by 123% in the last year and 110.3% year-to-date. As of Tuesday, their stock price exceeds its 50-day moving average. $ERDN shares are also actively traded on the MSE.

🌞 The Market Where the Sun Shines the Most

China’s efforts to stabilize its steel production maintain a high demand for coking coal. As a result, coal imports are expected to reach 100 million tons in 2024, and the amount of coal imported from Mongolia in the first 10 months of the year increases by 116% compared to the same period last year. This situation positively impacts Mongolian mining companies.

• 🥇 Gold Boom: Additionally, shares of major players in the gold market gain popularity due to a 1.4 times increase in the price of gold over the past 1 year. In this context, the stock price of Steppe Gold (STGO.TO), which merges with Boroo Gold to become a leader in the Mongolian gold mining industry, rises by 23% in the last 1 year.

Finally, Mongolia’s mining companies listed on foreign stock exchanges continue to progress. However, the MSE needs to attract more mining companies, as those with strategic mines face a pivotal decision due to new legislative requirements. By law, strategic depositors must have at least 10% of their shares publicly traded, encouraging these companies to consider listing on the MSE.

🚀 Contribute to the Future of Investment in Mongolia

Ashid Asset Management LLC, in collaboration with the Ministry of Economic Development, is conducting crucial research on foreign portfolio investment in Mongolia. Insights are being gathered through a brief survey!

• 💬 Make Your Voice Heard! If you've invested in securities issued by the Government of Mongolia or other companies, or if you're eyeing to invest, your feedback is vital. It will play a key role in assessing and enhancing Mongolia's investment environment.

🆘 Alarming Business Downtime in Mongolia

The National Statistics Committee releases its latest business demographic statistics, revealing that the level of business downtime reaches its highest point in the last five years. Many businesses in Mongolia are closing or unable to continue their operations. What factors contribute to this troubling trend?

🤔 Decline in Business Activity

In the past year, the activity rate of newly established businesses across Mongolia's 4 key sectors—industry, construction, trade, and transportation—drops by 1.8 percentage points from the previous year, now standing at 20.7%. This decline reflects a challenging business environment where new entrepreneurs frequently encounter issues related to taxation and financing. To foster growth in these sectors, it is crucial to enhance the overall business climate.

• 📍 Sector Concentration: Among these sectors, construction sees the fewest new or expanded enterprises, while transportation experiences relatively higher levels of new establishments. Notably, most new businesses concentrate in Ulaanbaatar, leading to diminished prosperity in Mongolia's western regions.

🔒 Closed For a Reason

Moreover, 2023 marks a concerning peak in operational outages across key industries, with a rate of 1.5%, the highest in 5 years. This surge results from various factors, including decreased demand, rising inflation, increased costs, financial challenges, heightened competition, and the impact of government policies. Currently, only 36.9% of registered enterprises maintain stable operations, while the rate of closures continues to rise.

• 💭 Shutdown Trends: Interestingly, the rate of shutdowns is most pronounced among enterprises with 1-4 employees, while those with 10 or more employees experience fewer closures.

The decline in new business growth and rising shutdowns across Mongolia's primary sectors signal a pressing need for reform. Addressing tax policies, enhancing the legal environment, and providing targeted support for specific industries prove essential to revitalizing the business landscape and promoting sustainable economic growth.

⭐ Selected for you

ECONOMY & BUSINESS

• Mongolian Meat is Now Available in Kuwait. (MFA)

• Asian Battery Metals Hits Copper and Gold in First Drill Hole at Copper Ridge in Mongolia. (ProActive)

• Trade and Development Bank of Mongolia Successfully Secures Long-Term Financing from U.S. International Development Finance Corporation. (TDB)

• Russia-Mongolia Mutual Trade Volume Up By 21% in 8 Months. (TASS)

POLITICS

• Taiwan Says It Was Snubbed By South Africa, Mongolia Under China Pressure. (NikkeiAsia)

•  Malaysia Adds 5 Foreign Halal Certification Bodies From Russia, Brazil, Mongolia and Uruguay. (Malaymail)

• Mongolia and India to Leverage the Strategic Partnership to Expand Relations in All Sectors. (Montsame)

• Thousands of North Korean Troops Are Being Trained Near the Mongolian border. (CNA)

• Australia and Mongolia Consider Signing Social Security Agreement. (AKIpress)

• France's Thales Alenia Space to Build Mongolia's National Satellite, ChinggisSat, for ₮830 Billion. (Parliament)

SPORT & ENTERTAINMENT

• The Mongol Khan Takes the Stage at Sands Theatre in Singapore. (Klook)

• Mongolian Rock Sensation THE HU Covers IRON MAIDEN Classic 'The Trooper. (BlabberMouth)

• Mongolia to Host Dota 2 E-Sports Tournament with a USD 100,000 Prize Pool. (MESA)

• Young Mongolian Football Players to Depart for Training with Fulham FC in London. (Montsame)

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Publisher: Ts.Ankhbayar
Writer: M.Khulan
Graphics by: Ch.Battseren

Disclaimer: The information Inside Mongolia provides is for educational and informational purposes only. It is not intended to be or constitute financial advice, trading advice, or any other advice. The decision whether to consider the information we provide is solely our readers' independent decision.