🏛️ GOLOMT BANK IPO | RIO TINTO OFFER TIMELINE | FINANCIAL SECTOR IN Q3 2022

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Let’s be honest … November in Mongolia is quite gloomy, November mornings - even worse. We can’t change the weather, but here’s a video about what Mongolians think of Russians that might make these early hours a little less dull. 

🤔 DID YOU KNOW?

🏛️ GOLOMT BANK TO IPO

The Financial Regulatory Commission has recently approved Golomt Bank’s application to IPO, making it the second systemically important bank to be listed on the Mongolian Stock Exchange within the framework of the banking sector’s reform. A few things to know about Golomt Bank and its upcoming public offering:

Income up, expenses down

Their net profit grew by 342.9% from the same period last year and reached ₮78.5 billion in Q3 2022 - mainly thanks to the increase in interest income and decrease in interest expense. To be exact, the bank’s interest income rose by 12.8% from a year ago, reaching ₮480.9 billion, while the interest expense dropped by 15.3% to ₮218.5 billion. Their total assets now make up ₮8.5 billion, 11.5% more compared to the same period last year, and account for 20.3% of the banking sector’s total figure.

The digital bank 

Having introduced their telephone and internet services back in 2001-2002, Golomt Bank became the first bank to offer a mobile banking app in Mongolia in 2012. As of today, about 320 thousand people actively use their Social Pay app, a digital wallet for easy, secure and smart payments on the go. 

The IPO

Invescore Capital LLC will be the main underwriter of Golomt Bank's IPO, with Golomt Capital LLC as the assistant underwriter. The asset evaluation will be carried out by KPMG, the audits - by PWC. “Financial Advisor on Legal Advocacy” LLC will be responsible for legal aspects of the IPO.  

We’ll share other details as soon as the IPO prospectus is available. Stay tuned!

📈 DATA STORY

TRQ has postponed its shareholders’ vote on Rio Tinto’s $3.3 billion offer indefinitely. It was initially scheduled on the first day of this month, but has now been delayed three times, first at the request of Rio Tinto itself and then due to the concerns of the financial regulator in Quebec. Now, TRQ decided to adjourn the special meeting to provide shareholders with sufficient time to consider additional disclosure. 

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💸 FINANCIAL SECTOR IN Q3 2022

Last week, the Financial Regulatory Commission published a third quarter report of Mongolia's financial sector. According to it, the total assets of NBFIs, insurance companies and savings and credit cooperatives (SACCOs), along with the whole capital market, make up 20.7% of Mongolia’s GDP. Let’s go through the figures of each one of these industries. 

Capital market with an average YoY growth of 11.7%

Mongolia’s capital market reached a valuation of ₮4.8 billion in the last quarter, 3.7% or ₮181.7 billion less compared to the same period last year. Despite this drop, the market has grown by 188.4% since 2012, which amounts to an average YoY growth of 11.7%. With the upcoming IPOs of systemically important banks and state-owned enterprises, the stock market is expected to become more active and expand like never before. 

NBFIs: 14 times bigger than in 2012

The total assets of NBFIs reached ₮3.4 trillion as of the third quarter of this year. With a total of 522 companies, the industry has a combined customer base of 4.9 million, of which 92.2% are digital customers. It’s worth noting that digital loans have grown by 130.2% annually for the past 3 years, with one in every three loans now being issued online. This is why the recently announced 70% maximum debt-to-income ratio for digital products effective from next year is likely to affect the performance of the NBFI sector, which has grown 14 times in the last 10 years.

Insurance + SACCOs: very little movement

In the last decade, insurance companies and SACCOs have grown at an average annual rate of 0.03% and 0.04%, respectively. As of Q3 2022, the total assets of 202 Mongolian SACCOs stand at ₮266.7 billion, 7.8% less than the same period last year, and those of insurance companies - at ₮449.6 billion, 1.1% more than in Q3 2021.

In the end

The digital movement and increased activity on the stock market have definitely had a positive influence on Mongolia’s financial sector. Now it’s only a matter of maintaining the momentum and driving the process forward.

🏃‍♀️ QUICK STORIES

📌 The State Great Khural approves 2023 budget. Revenue is projected to be ₮19 trillion, or 34.9% of the GDP, and spending - ₮20.4 trillion, or 37.6% of the GDP. Notably, the budget provides for a ₮4.9 billion revenue from mining by exporting 36.5 million tons of coal and 1.4 million tons of copper.

📌 Monos Foods JSC posts ₮21.5 billion revenue in Q3 2022. This is a 65.7% increase compared to the same period last year. As a result, the company’s net profit doubled to ₮2.7 billion, although its share price has fallen by 7.4% since the beginning of the year.

📌 Immigration Agency of Mongolia issues residence permits to 1,419 foreigners in October. The agency also extended the residence permits of 629 foreign citizens, approved 1,064 visas, granted 348 regular and 378 online visas in total.

📌 Subsidiary of Ondo Holding to launch Mongolia's first private commercial satellite. ONDO Space has been researching the launch of satellites for the past 5 years and plans to launch a total of 176 satellites within the coming half decade.

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