NON-MINING MINEGOLIA | INSURANCE | INTERNATIONAL THAI FILM FESTIVAL

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Hey there! It’s already a bit chilly here in Mongolia and it’s not even Autumn yet. Stay warm and don’t let the summer-is-ending blues get you down.

🤔 DID YOU KNOW?

⛏🙅‍♂️NON-MINING MINEGOLIA

Have you ever wondered how well the non-mining sector of “Minegolia” does?

There are as many as 540 companies in the sector, but they account for only 6.1% of the country’s total exports. The Central Bank of Mongolia has recently conducted a survey on 157 of them, and here are the key findings.

Lower revenues

22% of the respondents have a revenue of more than ₮2.5 billion, while 43% earn ₮300 million or less - significantly lower compared to mining companies. In addition, their export value in 2018 was 8.9 times less than that of the mining sector, but this difference increased to 15.9 in the first half of this year.

Little funding

Mongolia’s non-mining sector attracts very little attention from abroad. 60% of these enterprises are financed by loans from domestic banks and NBFIs, and only 3% - by international organizations. Sadly, the absence of international investments doesn’t necessarily imply the presence of domestic funding - only 5% of the respondents participated in repo financing aimed at supporting non-mining exports.

Hit by COVID-19

Before the pandemic, the surveyed companies took an average of 25.9 days to export their products, but now that time has jumped to 58.5 days. The duration of foreign transactions has also increased by an average of 3.7 days. In 2021, the mining sector’s export increased by 37.3% compared to 2018, while the export of the non-mining sector, namely animal husbandry, agriculture and industry, fell by 10%.

The raw material problem

Unlike mining companies that produce raw materials themselves, non-mining enterprises import as much as 21.6% of their primary resources. On top of that, only 49% of those primary resources can be replaced with domestic materials.

In the end, it really does look like Mongolia’s non-mining export hasn’t received the attention it has been promised for a long time now - it's like the neglected child that's been left to its own devices.

Anyway, what would be the best product/service Mongolia could offer abroad? Share your thoughts by replying to us.

📱 FEATURING UNITEL EXPAT

Dear expats,

Mongolia’s first telecommunication company “Unitel Group” has launched an exclusive service specifically tailored for YOU.

The pros:

• English and Chinese speaking specialists to provide you with on-demand support regarding Unitel’s products and services

• Exclusive access to Unitel branches and contact center

• Expat-Exclusive prepaid and postpaid mobile plans designed just for you with additional bonuses

• English E-Newsletter to keep you updated on the latest news and events in and around Mongolia

Now you don’t have to worry about Google Translate or fixing your broken Mongolian. 😉

For more info contact [email protected], or visit their website.

🐣 THE INFANT INSURANCE INDUSTRY

In the first half of this year, the total assets of Mongolia’s insurance industry reached ₮431.4 billion, an increase of only 0.6% from the same period last year. Perhaps, it’s not always true that the smaller the industry, the bigger it’s growth.

Socio-economic reasons?

The total premium income - the primary source of income for insurance companies - increased by 11.8% YoY and reached ₮124.3 billion. However, the industry’s net profit fell to ₮9.2 billion, almost as twice as less than a year ago. The main reasons:

• Compensation growth: Total compensation grew by 67.2% YoY and hit ₮19.5 billion. This was caused by the 76.3% increase in accident and medical insurance compensation, 49.2% rise in compensation for automobile accidents, as well as the compensation for credit insurance which grew 4.8 times in the first half of 2022.

• Dollar appreciation: Most Mongolian insurance companies are reinsured abroad. That’s why there’s no doubt that the rising value of the dollar is putting a lot of pressure on them. Although the reinsurance premiums haven’t changed as of the first half of the year, they are expected to increase in the near future.

• Stock market crash: Another source of income for insurance companies is returns from stocks they buy with the collected premiums. So, it’s clear that the fall in the value of stocks has had quite an impact on them. The interest income alone was ₮20.3 billion in the second quarter of the previous year, but fell to ₮11 billion in the same period of 2022.

Nevertheless, the insurance industry in Mongolia is still nascent. The fall, or rather the stagnation, described above might as well be an exaggeration of consolidation after last year’s boom. After all, considering the industry’s total assets accounted for only 3% of the country’s GDP in the second quarter of this year, there are still a lot of opportunities and potential in it.

🏃‍♀️ QUICK STORIES

📌 SpaceX suggests Mongolia to cooperate on energy consumption and transport projects. It was announced during the meeting between Mongolia’s Ministry of Digital Development and Communications and the COO of SpaceX on August 16. The projects in discussion are SolarCity and HyperLoop.

📌 Turquoise Hill rejects Rio Tinto’s $2.7 billion buyout offer. The Canadian mining giant has turned down the majority shareholder Rio Tinto’s bid to buy the remaining 49% stake in the company, stating that the proposed amount doesn’t reflect the full and fair value of those 49%.

📌 Bers NBFI to offer asset-backed security to raise ₮10 billion. The company’s pool of loans worth ₮10 billion will be packaged and sold to investors as two-year securities with a 16.8% yield by Bers ABC Active SPV. As of the first half of this year, the loan portfolio of Bers NBFI stood at ₮47.4 billion.

📌 Britain allows payments to Russia’s banks to make energy available to Mongolia. The U.K. has permitted Sberbank, Gazprombank, Credit Bank of Moscow and Rosbank to render payments necessary for supplying energy resources to Mongolia. The general license is valid from August 18, 2022, to August 14, 2023.

🟦 TOP NEWS

1. NASA to support training of Mongolian specialists in space research. (MONTSAME)

2. China-Mongolia DTA: What Are the Key Elements? (China Briefing)

3. CENTRAL ASIA BLOG: Mongolia frets over prospect of default. (Intellinews)

4. Number of endangered Przewalski's horses in Mongolia exceeds 1,000. (Xinhua)

5. Producers from ‘Netflix', ‘HBO’ and ‘Warner Bros’ to arrive in Mongolia. (MONTSAME)

🎥 INTERNATIONAL THAI FILM FESTIVAL 2022

The film “Trio” by Mongolian director B.Battumur was selected as one of the top 30 films to compete at the “International Thai Film Festival”.

Created under the ”Leave no one behind” agenda, the film “Trio” calls for the protection of rights of people with Down syndrome, as well as the creation of an equitable society with equal opportunities. Currently, it is successfully participating in international festivals in Poland, the U.S.A. and other countries with the support of the Down Syndrome Association of Mongolia.

The ITFF will be held online on September 15-19 free of charge.