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1. 2 1991 : Privatization 1995 : Secondary market began 2000 : Government bill 2001 : First corporate bond 2005 : First IPO companies 2007 : Bull market.

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Presentation on theme: "1. 2 1991 : Privatization 1995 : Secondary market began 2000 : Government bill 2001 : First corporate bond 2005 : First IPO companies 2007 : Bull market."— Presentation transcript:

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3 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 3

4 - 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 4

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

6 376 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 These 10 companies issued the bonds in MNT, except MCS electronics LLC and Monfresh JSC which have issued USD bond. 6

7 -Stock -Corporate bond - Government bond 7

8 - Brokerage - Underwriting - Investment Advisory F OLLOWING ACTIVITIES WILL BE INTRODUCED IN NEAR FUTURE -Custodian service -Investment management -Mutual fund 8

9 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. 9

10 Sector Number of company Market capitalization Proportion in total market cap 1 Service ,51% 2 Manufacturing ,29% 3 Mining ,64% 4 Food ,49% 5 Construction ,45% 6 Agriculture ,47% 7 Energy ,14% Total Market Cap /March 26, 2009/ MNT 10

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12 Market capitalization at the end of 2008 reached 515,872 million MNT, which was a record. Its worth mentioning that in December 1998 the price per share of Mongolias 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 percent or 64,655 million MNT, comparing to December

13 IndexStarted dateLast close 25 Mar, 2009 Number of companies in index Proportion in capital market MSE Top 20 index August, % BDS indexJune, % BDS IPO indexJune, % 13

14 BDS: 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. 14

15 MSE TOP 20: 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 disqualified stocks: APU (APU), Darkhan nekhii (NEH), Eermel (EER), Makhimpex (MMX), Moninjbar (MIB), Zoos goyol (ZOO). 5 new stocks: HBOil (HBO), Hermes center (HRM), Khuh gan (HGN), Mongol savkhi (UYN), Naco fuel (NKT), Tavan tolgoi (TTL). 15

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

17 Trading day VolumeValue TotalDaily averageTotalDaily average 2008 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan , Feb , Mar The volume of stock trade in first three months of this year has decreased by percent or 2.4 times, comparing to first three months of last year. 17

18 Company nameTraded volume Proportion in the total trading volume Company nameTraded value Proportion in the total trading value Khuh gan ,57% Anod bank ,97% Remicon ,46%Khuh gan ,02% Hermes center ,37%Remicon ,77% Anod bank ,86%GTB ,45% GTB ,40%Hermes center ,33% Naco fuel ,53%BDSec ,49% HBOil ,37%Shariin gol ,04% Olloo ,89%Zoos bank ,41% UID ,57%Naco fuel ,35% BDSec ,52%Nic ,61% TSU ,47% HBOil ,15% 18

19 Company nameTraded volume Proportion in the total trading volume Company nameTraded value Proportion in the total trading value Remicon ,83% Tavan tolgoi ,55% Khuh gan ,23% Remicon ,87% Olloo ,46% Suu ,91% GTB ,37% Zoos bank ,69% APU ,85% Khuh gan ,63% Suu ,74% Olloo ,64% Chatsargana ,63% APU ,46% Moninjbar ,61% Gobi ,95% UID ,42% GTB ,89% Erdenet zandan ,27% Chatsargana ,68% Zoos bank ,27% Nic ,62% Nic ,26% Baganuur ,37% Tavan tolgoi ,24% UID ,34% 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. 19

20 Company name Type of offering Number of offering share Total raised capital 1 HBOil FPO GTB FPO Hermes center IPO Remicon IPO Anod bank IPO Naco Fuel IPO BDSec FPO Khuh gan IPO 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, 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. 20

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22 -Corporate bond trading amount has decreased by 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 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. 22

23 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 Banks securities. 23

24 - 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/ 24

25 Contact details: Contact Person: Dayanbilguun Danzan Direct: BDSEC JSC Zaluuchuud Avenue 27/1, Empire Building Sukhbaatar District, Ulaanbaatar, Mongolia Pho: Fax: BDSEC JSC 25


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