🤝 A RECAP OF RECENT HIGH-LEVEL VISITS | CHINGGIS KHAAN BANK | TOP BANKS AND CAPITAL MARKET

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🤝 A RECAP OF RECENT HIGH-LEVEL VISITS

Last June, Mongolia hosted more than 10 high-level visits, which shows a sign of the country's growing international prominence.

Summits

Let's start with the summits that were held in June.

• June 18-22: The Speaker of the Mongolian Parliament visited Russia to establish a joint commission for cooperation between the Mongolian and Russian parliaments.

• June 25-29: Under-Secretary-General and High Representative of the United Nations for the Least Developed Countries, Landlocked Developing Countries, and Small Island Developing States paid a visit to Mongolia.

• June 25-29: During the same period, the Deputy of the National Security Council of the United States also visited Mongolia.

• June 26-July 1: The Prime Minister met with the President and Prime Minister of China to discuss the launch of construction of the Gashuunsukhait-Gantsmod port border railway and other issues.

• June 28-July 1: The Minister of Foreign Affairs of Indonesia paid a visit to Mongolia.

• June 29-30: Minister for Europe and Foreign Affairs of France participated in a foreign ministers meeting on feminist diplomacy and women’s rights that is being organized by Mongolia and co-sponsored by France and Germany.

Forum, Dialogue, Meeting

In addition to the summits, Mongolia also hosted several forums, dialogues, and meetings in June, including the 8th Ulaanbaatar Dialogue on Northeast Asian Security.

• June 15-16: The 8th Ulaanbaatar Dialogue on Northeast Asian Security was held. Also the United Nations Under Secretary General and High Representative for Disarmament Affairs attended the dialogue.

• June 27: The first trilateral meeting between the United States, Mongolia, and the Republic of Korea was organized in Ulaanbaatar.

• June 26-29: The World Export Development Forum (WEDF) was held in Ulaanbaatar. There were many high level participants including the Executive Director of the International Trade Center and the Deputy Secretary General of the United Nations.

• June 29-30: A meeting of female foreign ministers was held in Ulaanbaatar, with representatives from 19 countries.

In addition to the visits listed above, Mongolia also received representatives from countries such as the Netherlands, Georgia, Estonia, and Qatar during this period. These visits demonstrate the growing importance of Mongolia's foreign relations and its commitment to developing strong relationships with countries around the world.

DATA STORY: MONGOLIA’S TOP BANKS BOOST CAPITAL MARKET VALUE AFTER IPOS

The capital market size has more than doubled to ₮11.1 trillion ($3.3 billion) after Mongolia’s five largest banks went public, reflecting the growing appetite for the country’s financial sector.

The IPOs of Khan Bank, Trade and Development Bank, XacBank, Golomt Bank and State Bank have also increased the ratio of capital market to gross domestic product from 11.3% in the second quarter of 2022 to 21% in the same period this year, according to data from the Mongolian Stock Exchange.

The listings have also boosted the activity in the secondary market, where the trading volume reached ₮22.6 billion last month, up 270% year on year.

• The IPOs of the top banks have been met with strong demand from both domestic and foreign investors, breaking records for the number of participants and subscriptions.

• Khan Bank, the largest bank by assets, raised ₮725.5 billion from 71,255 investors in its IPO in July, which was 63.6% higher than the amount collected by Golomt Bank, the previous record holder, in December 2022.

• The share price of Khan Bank has also risen by 18.2% from its IPO price of ₮3,150, while Golomt Bank has fallen by 28% from its IPO price of ₮3,800.

The market valuation of the five banks has increased by 1.2% since their IPOs, with Khan Bank and Trade and Development Bank leading the gains.

• The IPOs are part of a broader reform of Mongolia’s banking system, which aims to improve governance, transparency, and capital adequacy.

• The reform was prompted by a $5.5 billion bailout package from the International Monetary Fund in 2017, which required the banks to undergo asset quality reviews and recapitalization.

• The banking sector accounts for about 90% of Mongolia’s financial system and plays a key role in supporting its economy, which is heavily dependent on mining exports.

The success of the bank IPOs has also encouraged other sectors to tap the capital market. The wave of surging interest is also illustrated by the number of retail investors with less than 5% stakes in listed companies, which has risen by 22.8% year on year to 539,000. A transport and logistics company is reportedly planning to list on the Mongolian Stock Exchange soon.

🏋️‍♀️ CHINGGIS KHAAN BANK SECURES CHINESE INVESTMENT AMID CAPITAL CRUNCH

Chinggis Khaan Bank, one of Mongolia’s oldest lenders, has signed a contract to sell its shares to a Chinese-invested company, as it struggles to meet the central bank’s minimum capital requirement.

• The bank, which was founded in 2001 as the first fully foreign-owned bank in Mongolia, became domestically owned in 2015.

• However, it has been operating at a loss since 2016 and faces multiple claims from state funds and organizations over its debts.

As of the first quarter of 2023, Chinggis Khaan Bank’s equity was only ₮12.5 billion ($3.7 million), eight times less than the ₮100 billion minimum set by the central bank at the end of 2021. The capital increase was intended to improve banks' financial intermediation and risk-bearing capacity.

Among the woes of Chinggis Khaan Bank are:

• National Health Insurance Fund, which is suing the bank for ₮27.8 billion in civil court,

• Development Bank, which lent ₮25 billion,

• Golomt Bank, which is seeking ₮11 billion from the lender.

The bank also owes ₮16 billion to the Deposit Insurance Corporation and ₮170 billion to the Small and Medium-sized Enterprise Support Fund.

In March, B. Lhagvasuren, the central bank governor, cautioned that Chinggis Khaan Bank needed to raise its authorized capital and attract new investors.

• Bayanmunkh Technical Development Co., a Chinese-invested company, expressed its interest in investing in Chinggis Khaan Bank and submitted an official request to the central bank in March.

• According to sources, one of the shareholders of Chinggis Khaan Bank offered to sell the bank’s name for ₮50 billion, clear all its debts and transfer its shares.

Chinggis Khaan Bank declined to comment on the investment deal. However, sources said that foreign investment could help the bank recover its operations and avoid insolvency.

🎆 HEINEKEN CELEBRATES 150 YEARS OF GOOD TIMES

Heineken, the beloved Dutch brewer, is celebrating its 150th anniversary this year with a global campaign that draws on its founder’s philosophy of “Gezelligheid” - a Dutch word that roughly translates as “coziness” or “conviviality”.

Tell me more!

The campaign, which features various content solutions, aims to convey the message that Heineken is not just selling beer, but a good time with friends and family.

In Mongolia, APU, the local distributor of Heineken, will offer a special deal to mark the occasion: four Heineken products for ₮15,000, or about $4.40.

🔗 Click here for more information

🏃 QUICK STORIES

🔵 With six days remaining until the Mongolian Economic Forum (MEF) 2023. The forum, which will be held on 9th-10th of July, in Ulaanbaatar, is expected to draw over 500 participants from government, business, and academia from around the world.

🔵 The first domestically rated corporate bond marks a significant milestone in Mongolia's stock market. Now, domestic companies can raise funds by being rated and by issuing debt instruments without collateral. This can also give a huge opportunity to attract foreign and domestic investors to the stock market.

🔵 The Financial Regulatory Commission (FRC) has granted the Mongolian Stock Exchange (MSE) a special license to operate the mining products exchange. Alongside this decision, the "Mining Products Exchange Law" came into force starting on the 30th of June. Before this, the government started coal trading online through the MSE last February. During that period, MSE traded 3.1 tons of coal for ₮1.3 trillion. 

🔵Mongolia's first exchange-traded fund (ETF) is registered. Invescor Asset Management LLC issued the fund and it’s registered at the Ulaanbaatar Stock Exchange. The ETF is a passively managed fund that tracks the performance of the MSE Index. This means that the ETF's performance will closely mirror the performance of the index, minus the management fee.

⭐ WATCH: NAADAM in MONGOLIA 2022 Vlog

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Editor: E.Zolbayar
Writer: A.Purevjargal & M.Khulan & A.Bilguun

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