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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 2001. 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 Service87 173 669 222 84238,51% 2 Manufacturing60 127 545 568 99128,29% 3 Mining21 93 075 693 29320,64% 4 Food40 47 315 838 48710,49% 5 Construction61 6 548 642 2911,45% 6 Agriculture73 2 133 063 7740,47% 7 Energy4 641 529 9920,14% Total Market Cap /March 26, 2009/ - 450 929 559 670 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 12.53 percent or 64,655 million MNT, comparing to December 2008. 12

13 IndexStarted dateLast close 25 Mar, 2009 Number of companies in index Proportion in capital market MSE Top 20 index August, 19955014.432062.60% BDS indexJune, 2006842.982563.43% BDS IPO indexJune, 2006205.331027.23% 13

14 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. 14

15 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), 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 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. 16

17 Trading day VolumeValue TotalDaily averageTotalDaily average 2008 Jan22 11 372 700 516 941 3 546 000 000 161 181 818 Feb20 3 584 500 179 225 1 929 800 000 96 490 000 Mar21 5 976 900 284 614 3 743 800 000 178 276 190 Apr22 3 391 900 154 177 3 161 100 000 143 686 364 May22 55 620 300 2 528 195 25 762 500 000 1 171 022 727 Jun21 17 105 900 814 567 4 936 100 000 235 052 381 Jul22 18 315 400 832 518 6 671 100 000 303 231 818 Aug21 37 341 422 1 778 163 4 754 226 582 226 391 742 Sep22 4 222 500 191 932 2 887 100 000 131 231 818 Oct23 4 730 316 205 666 1 032 033 558 44 871 024 Nov19 6 129 904 322 627 1 185 197 289 62 378 805 Dec23 2 356 322 102 449 740 404 704 32 191 509 2009 Jan212 399 925,0 114 282 472 563 290 22 503 014 Feb1812 291 065,0 682 837 1 382 277 514 76 793 195 25-Mar18 651 920 36 218 1 988 620 767 110 478 932 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. 17

18 Company nameTraded volume Proportion in the total trading volume Company nameTraded value Proportion in the total trading value Khuh gan38 403 34522,57% Anod bank 4 122 880 25539,97% Remicon34 812 95420,46%Khuh gan 4 235 970 7717,02% Hermes center 32 957 17819,37%Remicon 3 481 295 4005,77% Anod bank 21 873 03012,86%GTB 3 289 729 6385,45% GTB15 994 4099,40%Hermes center 3 218 593 7425,33% Naco fuel7 704 0154,53%BDSec 2 710 768 7594,49% HBOil 4 032 2592,37%Shariin gol 2 439 452 8414,04% Olloo 3 223 4181,89%Zoos bank 2 059 064 7853,41% UID974 1190,57%Naco fuel 2 021 677 9343,35% BDSec 891 1940,52%Nic 1 573 359 4672,61% TSU 800 2910,47% HBOil 1 299 210 8062,15% 18

19 Company nameTraded volume Proportion in the total trading volume Company nameTraded value Proportion in the total trading value Remicon 12 247 63579,83% Tavan tolgoi 1 904 344 16949,55% Khuh gan 1 108 9177,23% Remicon 1 224 763 50031,87% Olloo 838 4405,46% Suu 150 255 9003,91% GTB 364 0112,37% Zoos bank 103 237 4032,69% APU 130 5590,85% Khuh gan 101 166 6132,63% Suu 113 7420,74% Olloo 62 883 0001,64% Chatsargana 97 0150,63% APU 55 996 5331,46% Moninjbar 93 5740,61% Gobi 36 595 1480,95% UID 63 7350,42% GTB 34 327 6990,89% Erdenet zandan 40 9290,27% Chatsargana 26 194 0500,68% Zoos bank 40 8080,27% Nic 23 804 4030,62% Nic 40 5330,26% Baganuur 14 182 7820,37% Tavan tolgoi 36 7930,24% UID 13 141 4620,34% 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 2 000 000 600 000 000 2 GTB FPO 2 100 000 482 900 000 3 Hermes center IPO 23 562 900 2 356 290 000 4 Remicon IPO 100 000 000 2 700 000 000 5 Anod bank IPO 18 530 000 20 400 000 000 6 Naco Fuel IPO 11 000 000 900 000 000 7 BDSec FPO 1 000 000 2 700 000 000 8 Khuh gan IPO 30 000 000 3 300 000 000 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. 20

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22 -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. 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: +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 BDSEC JSC 25


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