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Mongolian Capital Market Overview

Mongolian Capital Market Overview. 25 March, 2009. Mongolian Capital Market Structure. Capital Market in Brief. 1991 : Privatization 1995 : Secondary market began 2000 : Government bill 200 1 : First corporate bond 2005 : First IPO companies 2007 : Bull market in the stock market

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Mongolian Capital Market Overview

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  1. Mongolian Capital Market Overview 25 March, 2009

  2. Mongolian Capital Market Structure

  3. Capital Market in Brief 1991 : Privatization 1995 : Secondary market began 2000 : Government bill 2001 : First corporate bond 2005 : First IPO companies 2007 : Bull market in the stock market 2008 : Stock market decline

  4. The professional institutions - Regulator: Financial regulatory commission - A center for trading listed securities: Mongolian Stock Exchange - An organization that engages in securities clearing and depository activities: Securities Clearing House and Central Depository

  5. Intermediate organizations • 43 brokerage and dealing companies (Member of MSE) - 12 Underwriting companies - 4 Investment advisory companies

  6. Securities Issuers 376 listed companies There are 376 listed companies listed in the Mongolian stock exchange. 22 of them are held by state for 100%. 346 listed companies constitute the current market capitalization. In 2008, Financial Regulatory Commission temporary suspended the 166 listed companies which have not reported the financial results in recent years out of MSE listing. Now, stocks of 180 listed companies are traded on the Mongolia Stock Exchange. 10 bond issuers 10 companies have issued corporate bonds since 2001.These 10 companies issued the bonds in MNT, except MCS electronics LLC and Monfresh JSC which have issued USD bond.

  7. Investment products on Mongolian capital market - Stock - Corporate bond - Government bond

  8. Services on Mongolian capital market - Brokerage - Underwriting - Investment Advisory Following activities will be introduced in near future • - Custodian service • - Investment management • - Mutual fund

  9. Listed companies by sector Total 346 listed companies are divided into above 7 sectors; 87 companies from service sector, account for 38,51%, 60 companies from manufacturing sector, account for 28,29%; 21 companies from mining sector, account for 20,64%; 40 companies from food sector, account for 10,49%,61 companies from construction sector, account for 1,45%, 73 companies from agriculture sector, account for 0,47%; 4 companies from energy sector, account for 0,14% of total Market capitalization.

  10. Listed companies by sector Total Market Cap /March 26, 2009/ - 450 929 559 670 MNT

  11. Major Indicators of Mongolian Capital Market

  12. Total market capitalization /in million MNT/ Market capitalization at the end of 2008 reached 515,872 million MNT, which was a record. It’s worth mentioning that in December 1998 the price per share of Mongolia’s top 20 businesses (The Top 20 Index is calculated by multiplying the number of traded securities by their market price) was about 200 MNT, in December 2008 the price per share rose to 5,700 MNT. As for March 2009, the market capitalization has decreased by 12.53 percent or 64,655 million MNT, comparing to December 2008.

  13. Major Indices on Mongolian Capital Market

  14. BDS Index BDS: 842.98 BDSec Joint Stock Company has been calculated BDS Index since June 23, 2006 with a purpose of only representing the movements and the trends in the Mongolian Capital Market. BDS Index has 25 member stocks which are rated by BDSec JSC as standard. The member stocks represent the leading 7 sectors in Mongolia.

  15. MSE TOP 20 INDEX MSE TOP 20: 5014.43 MSE Top-20 index is modified in every half year. By the end of 2008, poorly performed 5 stocks disqualified from MSE Top-20 index which soon after added by 5 new stocks have demonstrated outstanding performance throughout 2008. 5 disqualified stocks: APU (APU), Darkhannekhii (NEH), Eermel (EER), Makhimpex (MMX), Moninjbar (MIB), Zoos goyol (ZOO). 5 new stocks: HBOil (HBO), Hermes center (HRM), Khuhgan (HGN), Mongol savkhi (UYN), Naco fuel (NKT), Tavantolgoi (TTL).

  16. Daily average turnover As for March 2009, average daily turnover 110.47 million MNT, comparing this data with the 2008 peak period in May, the daily turnover has declined 90.57 percent or 1,060.5 million MNT, but comparing to December 2008, has increased by 66.51 percent or 73.47 million MNT.

  17. Equity trading The volume of stock trade in first three months of this year has decreased by 53.31 percent or 2.4 times, comparing to first three months of last year.

  18. Most actively traded stocks in 2008

  19. Most actively traded stocks /1 Jan, 2009 - 25, March, 2009/ During this period, majority of stock traded on the market were Tavan tolgoi (TTL). Trade value of this stock`s represents over 49 percent of total stock trade.

  20. New issued in 2008 In the 2008, 5 companies issued initial stocks and 3 companies released additional stocks, which accumulated total financing of 33.5 billion MNT. During this period, 55.51 percent of total stock trade value were new and additional stocks. Seeing from it, these new stocks played a major role in the whole stock trade process over this time.

  21. Corporate bond trading

  22. Corporate bond trading - Corporate bond trading amount has decreased by 347.9 million MNT or 40.94% compared to previous year. In 2008, only Moninjbar bond accounted 41,83%. “Moninjbar” JSCompany started issuing 120 thousand bonds at a face value of 10,000 MNT under the name “Accomplishment”. The maturity date of the bond is 2 years at a coupon rate of 11.11 percent. Moninjbar will use the fund for the “40 thousand residential apartments” program, on improvements of Ulaanbaatar and rural area infrastructure, and to carry out technical modernization. In addition to construction, Moninjbar engages in building public utilities’ objects such as heating stoves and engineering lines. - As commercial banks’ interest rates have been dramatically decreased over past several years, corporate bond issuances in Mongolia are significantly downsizing in last 2 years. Companies are usually keen to finance their short term investment through bank loans and raise their long term investment from capital market by selling their shares.

  23. Discounted government bond trading During this period, 1,5 billion MNT or 30 percent bonds of the low-value government bonds issued in 2008 were traded. The main reason for such low trade of the government bonds was the fact that the Central Bank raised its security interest rate in order to protect against inflation, which initiated commercial banks to purchase the Central Bank’s securities.

  24. Why invest Mongolia • Easy to invest • Emerging and growing market • Undervalued stocks • Promising P/E • Active trading, increased volume No limitation for foreigners: • No special regulation for foreign investors • There is no investment amount limitation for foreigners • According to Mineral law of Mongolia, every mining company that owns strategic mineral deposit has to issue no less than 10 % of their total share on Mongolian stock exchange. Low tax • There is no tax imposed on dividends. • Since 2007, Value Added Tax decreased to 10% from 15%. • Income tax reduced to 10% /Both individuals and entities/

  25. Contact details: BDSEC JSC Contact Person: DayanbilguunDanzan Direct: +976-99112846 BDSEC JSC Email: bdsec@bdsec.mn Zaluuchuud Avenue 27/1, Empire Building Sukhbaatar District, Ulaanbaatar, Mongolia Pho: +976-11-321763 Fax: +976-11-323411

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