🏙 Ulaanbaatar Bond | Economic Freedom | Invest Gobi 2023

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Today’s newsletter covers

• Investment Opportunities in Umnugobi

• Mongolia’s Economic Freedom Ranking Update

• Ulaanbaatar Bond

Let’s dive in!

 🏙 Ulaanbaatar City is ready to issue its first municipal bond

Primary market trading of Mongolia’s first municipal bond - “Ulaanbaatar bond” is to start at 12 pm today (UB time).

Funding what?

Merely 24% (amounting to ₮456 billion) of this year's city budget revenue has been allocated to the enhancement of public transport and infrastructure development.

• Reason: In fact, the budget for public transport and infrastructure should increase with population growth, but right now it is impossible. Therefore, by issuing bonds, the city intends to get a new source of investment in the infrastructure that is required by the population growth in a short period of time.

🔢 Bond and numbers

The city plans to accumulate a total of ₮500 billion through 3 tranches distributed over the span of 5 years.

• 17.2%: On this occasion, the initial tranche of ₮277.8 billion will be generated via bond face valued at ₮100,000 per unit, featuring an annual coupon rate of 17.2%.

• Payment: The bond will carry a 2-year term with a semi-annual coupon payment.

How to distribute?

A total ₮277.8 billion will be allocated as follows,

• 54% for the initial phase of the Selbe revival project, focusing on construction and development,

• 22.6% for the establishment and enhancement of educational infrastructure, encompassing 4 schools, 7 elementary schools, kindergarten complexes, and 25 kindergartens,

• 11.9% dedicated to road construction and the 3 electricity supply projects designed for technology parks in Nalaikh and Baganuur districts,

• 11.5% reserved for the acquisition of semi-coke and lighters

At last, Municipal bonds are considered the lowest-risk investment after government bonds. Therefore, investors should carefully research and make a decision. BDSec (BDS) is working as the main underwriter of the bond. Please note that the primary market trading closes at 5pm this Thursday.

DATA STORY: Mongolia's Economic Freedom Ranking Update 

Mongolia's position in the World Economic Forum's Freedom Index has fallen by 8 places, with the country now ranked 67th. This index assesses economic freedom by considering five key criteria, such as the government's size, the legal framework for property rights, and monetary stability. Mongolia is currently categorized as Level II, indicating a favorable level of economic freedom within the country.

🌟 Umnogobi Investment Forum Showcases Province's Economic Growth

Invest Gobi 2023 or Umnogovi investment forum successfully held with over 550 foreign and domestic guests. Let’s wrap it up.

🔍 Interesting numbers

The forum’s first-panel discussion started on the topic of "Investing in Umnugobi''. Then why Umnogobi?

• 29%: The province's total population increased by 29% in the last 12 years and reached 73.8 thousand. Because of the improvement of infrastructure, the number of households connected to wastewater treatment facilities and disinfection pipeline networks has increased by 279%.

• 70.5%: As a result, the labor force participation rate of Umnogobi became 12.5% higher than the national average of 70.5%. Also, the amount of savings of its citizens has surged 3 times in the last 7 years and reached ₮220 billion. Overall, labor force participation, infrastructure, and buying power of the province have all improved.

🗺 Big numbers

We have previously covered Umnogobi's improvement of budget, competitiveness, and buying power. In addition…

• 97%: If we look at the growth and decline of non-mining enterprises in this province in the last 10 years by sector, the processing sector has grown the highest, 97%, and its annual sales income has reached ₮201 million. In addition, the transportation and warehousing operations sector grew 80%.

• 330%: Also, the province's vehicles have increased an average of 330% in the last 10 years.

• 4x: Also, the tourism sector has developed over time. The number of foreign tourists visiting the province has quadrupled in the 8 years before Covid 19. In addition, last year, 27 tourist camps brought in ₮1.4 billion in local income.

To highlight, the forum was distinguished by the participation of securities companies led by Tavan Bogd Capital, Ulzii & Co, and TDB Securities, and held an interesting industry panel discussion.

Invest Gobi 2023 was a testament to the region's growing attractiveness as an investment destination. Umnugobi is home to a wealth of natural resources, a young and growing population, and a commitment to economic development. With the right investment, the region has the potential to become a major economic hub in the years to come.

🏃 QUICK STORIES

🔵MIAT SPC offers discounts on direct flight tickets to destinations including Istanbul, Frankfurt, Beijing, and more. Ticket prices will see reductions of 10% to 15%. Currently, the company's most affordable ticket prices range from ₮1.2 million to ₮1.9 million, depending on the destination.

🔵A new CEO of Bodi Insurance (BODI) has been appointed. A.Enkhjargal has assumed the role of overseeing an insurance company valued at ₮20.7 billion. It's worth noting that in the first half of this year, the company achieved a 10.6% return on equity but also had a 68.8% loss ratio.

🔵In a historic move, the German government is providing Mongolia with its largest-ever funding contribution. Specifically, Germany is offering €78 million as part of their development cooperation with Mongolia, with €29 million allocated to support the primary program.

🔵Erdenes Tavantolgoi JSC has achieved a significant milestone by selling 20 million tons of coal this year. The company had previously sold 15.5 million tons of coal in 2019 and an additional 4.5 million tons over the past four years. Notably, 14.6% of their total sales went through the mining products exchange.

⭐ TOP NEWS

• Forum: United States hosts forum to advance Mongolia’s food security (U.S.EmbassyinMongolia)

• Project: MEIL bags $648 million EPS contract for refinery in Mongolia (TheHindu)

• Report: Update of Bayan Khundii Gold Project Feasibility Study 43-101 Technical Report (ErdeneResourceDevelopment)

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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 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.