📈 Mongolia's stock market expansion | QPay's IPO | Personal loans

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Good morning! Have you ever heard about “Nine Nines of Winter” of Mongolia?

The "Nine Nines of Winter," a traditional Mongolian method for gauging winter's harshness, is a unique system that divides winter into nine nine-day periods, each linked to a specific degree of coldness and typical weather conditions. So, fingers crossed for all the expats, who are going to witness Mongolian winter for the first time. 🍀

In today’s Inside Mongolia’s newsletter:

• New IPO

• Mongolians bank loan

• Mongolia’s stock market’s expansion.

Enjoy your reading. 😉

✨ New IPO

Mongolia's biggest digital payment tool, QPay, is getting ready for its first-time public offering (IPO). Instead of using cash or bank cards, people in Mongolia usually make payments with digital wallets like QPay. Let's take a closer look at Innovation Investment LLC, the company behind QPay.

The Beginning

In 2016, Innovation Investment LLC started developing the QPay service, officially establishing itself in 2017. The company currently operates with two subsidiaries: KKTT LLC, which provides electronic payment services using QR codes, and DMS LLC, a developer of mobile and web apps for merchants.

QPay's Impact

QPay has gained popularity quickly since its introduction in 2019, with 63 million transactions in the previous year alone. In the first 10 months of this year, transactions surged to 98.6 million, totaling 4.7 trillion ₮.

• Growing Strong: QPay now boasts more than 3.2 million users and over 14,000 connected customers. The market share of QPay transactions is expected to rise from 0.2% in 2018 to 12.5% by 2027.

Upcoming IPO

Currently, 16 individuals own shares in Innovation Investment LLC, with ICT Group holding 22%. However, the company plans to go public next month, offering 20% of its shares to the public at ₮225 per share, aiming to raise ₮8.3 billion.

• Why Invest: Considering the decline in paper money and payment card usage, investing in a payment service with a wide network seems timely. The company turned profitable in 2021, reporting a profit of ₮3.5 billion last year. Owners' equity reached ₮6.1 billion, with a remarkable return on equity (ROE) of 78.4%. By 2027, the profit is expected to quadruple to ₮14 billion.

Mark Your Calendar

QPay's IPO kicks off on December 4th, marking another Mongolian company going public. If you're contemplating whether to join the IPO, keep an eye on the increasing trend of digital payments and the promising financial indicators of Innovation Investment LLC.

DATA STORY: 🤫 Over Half of Mongolians Have Loans

More than half of Mongolians, or 1.8 million people, have bank loans. The number of borrowers has increased steadily over the past year, with 163,600 more people taking out loans in the last 12 months.

📈 Market Capitalization = ₮10.2 Trillion

The Grand Bull Awards, which recognize outstanding achievements of the last 5 years of Mongolia's stock market, to hold this Friday. Let’s review the last 5 years of the stock market.

Shining last 5 years

Mongolia's financial sectors witnessed significant growth, with the stock market's capitalization surging by 337.9%. NBFIs assets followed closely, expanding by 207.1%, while insurance, banking, and credit unions recorded growth rates of 56.2%, 54.2%, and 47.8%, respectively from 2018 to Q2 2023. In addition to market expansion, various indicators have demonstrated positive trends, underscoring the resilience of Mongolia's financial sector.

• Investments in the stock market have experienced a notable surge in recent years. The ratio of total stock market value to M2 supply, a key indicator of funds invested in the stock market, has steadily increased from 0.13 in 2018 to 0.31 as of 2023 Q3, reflecting growing investor confidence and participation in the market.

• Value in the economy: As the market grew, the value of traded stocks and the Buffett Indicator also surged. For example, stock trading reached a peak of ₮1.4 trillion in 2021, while the Buffett Indicator, representing the ratio of total stock market value to GDP, has been steadily increasing and reached 17% as of Q3 2023.

Also, Since the inaugural security listing on the OTC market in September 2021, a total of ₮2.1 trillion in securities have been listed, resulting in ₮1.5 trillion raised on the OTC market as of H1 2023.

• Future: The Mongolian Stock Exchange (MSE) secured its classification as a "frontier market" in the FTSE as of September this year. This significant recognition positions the Mongolian stock market and its companies on the global stage, poised to attract foreign strategic investors in the coming years.

At last, in the span of 5 years, Mongolia's stock market, which experienced stagnation for the past three decades, has undergone rapid and impressive development. As a young frontier market, Mongolia's stock market has not only grown remarkably in the recent years but also holds the potential for even more accelerated growth in the future.

🏃 QUICK STORIES

🔵South Korea's Ministry of Transport fines Vietnam Airlines, and Aero Mongolia for violating aviation law. Aero Mongolia fined ₩10 million for operating the Incheon-Ulaanbaatar route without approval since July.

🔵Fitch Ratings assigns Mongolia's (B/Stable) proposed US dollar bonds a 'B' rating. According to Fitch Ratings, this Government’s new bonds are part of their plan to repurchase the "Khuraldai" bond, which has an 8.75% coupon and matures next year.

🔵ONDO's founders to give away their shares to their loyal customers. In this regard, the company is releasing the "OLULAA" package today at 11:11 AM on the ONDO website. FYI, to become their shareholder, users must maintain active usage for 24 consecutive months of the “OLULAA” package.

🔵Xanadu Mines (XAM.TO) to issue additional shares. The company is planning to issue a total of 78.1 million new shares valued at $0.055 per unit to raise A$4.3 million from the investors. Also, the offering will be conducted in 2 tranches.

🔵South Korea to provide ₩9.7 billion in funding for the extraction of rare earth metals from Mongolia. As of the beginning of the cooperation, 2 countries held the first meeting of the joint committee last Monday. Also, both sides agreed to establish a research center for rare metals.

⭐ TOP NEWS

• Transport: Mongolia’s New Land Ports Seek to Broaden Ties with China and Russia, Provide ‘Pivotal’ Link with Asia and Europe. (SCMP)

• Travel: This Remote Eco-Lodge Offers Travelers a Rare Opportunity to Experience Mongolia’s Gobi. (CNN)

• Culture: Mongolia Willing to Pay for Return of Artefacts Held in British Museums. (TheTelegraph)

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Editor: E.Zolbayar
Writer: M.Khulan & Skh.Angirmaa & G.Aminaa

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.