1. L/O/G/O www.trungtamtinhoc.edu.vn Introduction to Mongolian Stock Market, MSE MA4N0206 BATJARGAL Jargalsaikhan

2. www.trungtamtinhoc.edu.vn Contents Bond Market Stock Market Timeline of MSE Historical background of Mongolian Stock Exchange Brief introduction to the MSE

3. www.trungtamtinhoc.edu.vn Brief Introduction to the MSE  The Mongolian Stock Exchange (MSE) (Mongolian: Монголын Хөрөнгийн Бирж) located in Ulaanbaatar, is Mongolia's sole stock exchange.  The Mongolian Stock Exchange is located in the former Children's Cinema building near Chinggis Square, next to the headquarters of Mongolia Telecom and across from the Mongolian parliament's buildings.  It was refurbished at a cost of US$ 4.5 million prior to the official start of trading; seats and screens were removed, a trading floor was created and equipped with computers, and automatic sinks were installed in the bathrooms.  The building itself is a pink-and-white neo-classical-style structure. One corner of the building has been partitioned off to serve as an internet cafe. Due to the color of its building, the Financial Times correspondent, Leslie Hook, defined it the pink house of equities. Since then the building has been painted gray.

4. www.trungtamtinhoc.edu.vn Historical Background of Mongolian Stock Exchange (MSE)  During the transitional period from a centrally planned economy to a market economy in Mongolia, the Government of Mongolia established the root of Mongolian Stock Exchange (MSE) on January 18, 1991 with the intention of implementing its Privatization Policy and developing investment and securities market.  96.1 million shares worth 8.2 billion MNT (7.0 million USD) of 475 state owned entities were successfully traded through MSE during 1992-1995.  The secondary market on MSE has been held since 1995. http://mse.mn/content/show/id/7

5. www.trungtamtinhoc.edu.vn Historical Background of Mongolian Stock Exchange (MSE) (Cont.)  The first Securities Act was enacted in 1994, followed by the establishment of Securities Committee.  29 state owned brokerage firms were privatized, the status of Mongolian Stock Exchange was changed into non-profit, securities trading and related service providing entity according to the enactment 170 by Mongolian Government in 1995.  The Securities Act’s 2002 renewal reformed the status of MSE into a state owned company and allowed it to perform securities trading and other business activities that comply with Mongolian laws and regulations.  The main indicator and benchmark of Mongolian Stock Market was initially comprised of 75 companies, TOP_75. In 2003, a number of companies in the basket were reduced to 20 companies, TOP-20. http://mse.mn/content/show/id/7

6. www.trungtamtinhoc.edu.vn Timeline of MSE 01 January 25 October 08 June03 December 19961998 2001 2002 The first trading day for government bonds. The MSE joined as the Federation of Euro-Asian Stock Exchanges as a full member. The MSE started to trade corporate bonds. Memorandum of Understanding on Mutual Cooperation with Taiwan Stock Exchange was signed. https://en.wikipedia.org/wiki/Mongolian_Stock_Exchange

7. www.trungtamtinhoc.edu.vn Timeline of MSE 31 October 26 March 01 January15 June 200320052006 The MSE was reorganized as state owned Shareholding Company. "Training center" of capital market was established at MSE. Finance Regulatory Commission of Mongolia was established. Memorandum of Understanding with Korea Exchange was signed. https://en.wikipedia.org/wiki/Mongolian_Stock_Exchange

8. www.trungtamtinhoc.edu.vn Timeline of MSE 05 March 19 July 10 April 20062008 Memorandum of Understanding with Istanbul Stock Exchange was signed. The MSE established "Information transmission" agreement with Bloomberg. The Mongolian Stock Exchange became a member of the Asia Pacific Stock Exchanges Association. Memorandum of Understanding with Singapore Stock Exchange was signed. https://en.wikipedia.org/wiki/Mongolian_Stock_Exchange

9. www.trungtamtinhoc.edu.vn Timeline of MSE 17 March 15 May 31 August07 April 2008200920102011 Memorandum of Understanding with Tokyo Stock Exchange was signed. Memorandum of Understanding with Moscow Interbank Currency Exchange was signed. Market value of MSE, exceeded MNT 1 trillion. Mongolian Stock Exchange and State Property Committee of Mongolia signed the "Strategic Partnership Agreement" with London Stock Exchange Group. https://en.wikipedia.org/wiki/Mongolian_Stock_Exchange

10. www.trungtamtinhoc.edu.vn Related Authorities MSE Ministry of Finance Parliament of Mongolia Mongolbank Financial Regulatory Commission State Property Committee Asia and Oceania Stock Exchange Federation Asia and Oceania Stock Exchange Federation Fax: (+976)-11-325170 Website: www.mse.mn E-mail: info@mse.mn Office hours: Monday – Friday 08.00 am to 05.00 pm. Address: Mongolian stock exchange Great Chinggis Khaan’s Square-3, Ulaanbaatar 15160, Mongolia Phone: (+976)-11-313747-(109)

11. www.trungtamtinhoc.edu.vn MSE: People and relationship building Naidansurengiin Zoljargal, one of the founders of the Mongolian Stock Exchange, was educated in Hungary and later studied finance at the Harvard University in the United States, and founded the Mongolian Stock Exchange when he was 27 years old. His older brother, Naidansurengiin Jargalsaikhan, was formerly head of the Bank of Mongolia, but was ousted from his job after the loss of US$100 million of foreign reserves, which had been invested in futures and foreign currency His Daughter, Kherlen Zoljargal, graduated from Cornell University in May 2014 and has since started working for Bloomberg in June. [Image Info] www.wizdata,co,kr Note to customers : This image has been licensed to be used within this PowerPoint template only. You may not extract the image for any other use. https://en.wikipedia.org/wiki/Mongolian_Stock_Exchange

12. www.trungtamtinhoc.edu.vn MSE success highlights 121% increase 57.8% increase 80.8% increase Venezuela Caracas Stock Exchange Ranked world’s best performing stock market Ranked the second best performing stock exchange in the world 2010 2011 2011 2011 https://en.wikipedia.org/wiki/Mongolian_Stock_Exchange

13. www.trungtamtinhoc.edu.vn Functions of stock exchanges  The first stock exchange was in the Netherlands when the Dutch East India Company issued the first shares on the Amsterdam Stock Exchange.  Stock exchanges has following major functions in any economy: Raising capital for businesses Mobilizing savings for investment Facilitating company growth Profit sharing Corporate governance Creating investment opportunities for small investors Government capital-raising for development projects  Some of the world largest stock exchanges in terms of volume are: NYSE, NASDAQ, Tokyo stock exchange, London stock exchange, National stock exchange etc.NYSE, NASDAQ, Tokyo stock exchange, London stock exchange, National stock exchange etc. www.capmaa.org

14. www.trungtamtinhoc.edu.vn Location of Stock Exchanges across the World www.capmaa.org

15. www.trungtamtinhoc.edu.vn Mongolian companies in international stock exchanges Vancouver London Toronto Hong Kong New York Australia East Asian Mineral Corporation Etas:Cn Petro Matad Mato:Ln, North Asian Resources 61:HK,JORC Ivenhoe Mines Ivn:us Centerra Gold CG:CN,NL-43-101 Hunnu Coal Hun:AU,JORC

16. www.trungtamtinhoc.edu.vn Stock market During the reporting period, Top-20 Index’s highest point reached 17160.49 units, lowest point was 14475.20 units and the average point was 15744.98 units. End of the reporting period, Top-20 index stood at 14854.24 units indicating a decrease of 8.88% or 1447.57 units compared to the same period of previous year. www.mse.mn

17. www.trungtamtinhoc.edu.vn Stock market performance between 2004 - 2014 www.mse.mn

18. www.trungtamtinhoc.edu.vn Trading performance of 2013 & 2014 Total trading value has decreased by MNT73.4 billion or 75.20% compared to the same period of last year. www.mse.mn

19. www.trungtamtinhoc.edu.vn 2013 Stock trading performance www.mse.mn As of 31 December 2014, total of 51.7 million shares of 137 Joint Stock Companies worth MNT24.2 billion were traded through 255 trading sessions. During the reporting period, the average daily turnover was MNT86.9 million, 162.9 thousand shares in term of share volume. /The average daily turnover included value and volume of block trading/ Amount of most actively traded 30 companies accounted 98.85% of total trading by volume and 94.39% of total trading by value respectively. During the reporting period, shares of 136 joint stock companies traded and 80 companies had share price increase, 40 companies had share price decrease and rest of 14 companies had unchanged share price compared to the same period of last year. MOST ACTIVELY TRADED 30 SECURITIES

20. www.trungtamtinhoc.edu.vn 2013 Stock trading performance (Cont.) www.mse.mn TOP 20 GAINERS TOP 20 LOSERS

21. www.trungtamtinhoc.edu.vn Bond Market www.mse.mn GOVERNMENT BOND TRADED In 2013, government bond worth 1,01 billion MNT with 1096 days to maturity, a coupon rate of 7.8%, a face value of 100 000 MNT have been traded in the secondary market through one trading transaction.

22. www.trungtamtinhoc.edu.vn Bond Market www.mse.mn GOVERNMENT SECURITIES YIELD CURVE

23. www.trungtamtinhoc.edu.vn Bond Market www.mse.mn CORPORATE BONDS TRADED 2003 - 2013

24. www.trungtamtinhoc.edu.vn Bond Market www.mse.mn CORPORATE BONDS TRADED 2003 - 2013

25. L/O/G/O www.trungtamtinhoc.edu.vn