Daily Business News Mongolia

About 4000 barrels of crude oil is drilled in Mongolia everyday

While Budget Plan of year is under discussion in the upcoming days, MPs discussed about the refinery that will allow us to develop oil processing industry in our homeland. Proposal of MP D.Khayanhirvaa in building a refinery in Darkhan-Uul aimag was supported by the majority of MPs. If this refinery be built, crude oil that is expected to import from Kuwait and Kazakhstan can be processed in Mongolia rather than in China. (more…)

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APU share price was increased 3 days in a row

268.6 thousand shares of 22 SHC were sold at the Mongolian Stock Exchange (MSE) totaling 43.7 million MNT trade. 100.8 thousand Remicon share and 3.1 thousand Monfresh share were sold at the primary market. 93.5 thousand shares of Hermes Center were sold and it was the most actively traded shares at the stock market. In comparison to the previous day’s trade, APU share price was increased by 14.95% and UED (State Department Store) by 14.84% but Olloo share price was decreased by 13.7%.

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Fitch Assigns B+ Issuer Default Rating to XacBank of Mongolia

The following is a press release from Fitch Ratings:

Fitch Ratings-Hong Kong/Singapore-13 November 2008: Fitch Ratings has today assigned XacBank of Mongolia (XacBank) the following ratings: ‘B+’ Long-term Foreign Currency Issuer Default Rating (IDR), ‘B+’ Local Currency IDR, ‘B’ Short-term IDR, ‘D’ Individual Rating, ‘4′ Support Rating and ‘B’ Support Rating Floor.

XacBank’s ratings reflect its small but solid balance sheet, good profitability, very good corporate governance, as well as the potential for significantly higher credit costs, given the more challenging economic outlook. XacBank’s loans growth has been exceptionally strong in recent years at about 70% p.a., albeit similar to system-wide growth, reflecting the under-banked and fast growing Mongolian economy. Historically focused on micro and rural lending, it has more recently concentrated on SMEs and urban areas, including mortgages and other consumer loans. At H108, micro loans accounted for 20% of XacBanks’s total loans, versus SMEs at 25%, mortgages at 21% and other consumer loans at 19%.
(more…)

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MP N.Batbayar: 300 million US$ of the Mongolia Development Fund will be placed at commercial banks.

The draft law of placing some fund of the Mongolia Development Fund was initiated by MPs N.Batbayar, R.Amarjargal, G.Batkhuu, Ts.Bayarsaikhan, R.Bud, D.Damba-Ochir, G.Zandanshatar, O.Chuluunbat and proposed to the Speaker of the State Great Khural. Some more clarification was made from the initiator.

Q: What was the main reason of initiating this law?
MP N.Batbayar: World financial crisis is affecting countries of the world and countries are taking various measures to handle it. USA allocated 700 billion US$ and it is equal to its 5% of GDP. As for Mongolia, situation in economy is relatively healthy and potential. Therefore, there is a proposal of placing 300 US$ of the Mongolia Development Bank in commercial banks, if compares with USA, proportionally, it is about 200 million US$ for USA. The income from the windfall tax was divided into three different purposes and 1/3 of it or about 300 million US$ was reserved for the securing the domestic crisis. According to the law, it is kept at the Central Bank. Therefore, in order to support commercial banks and fund them, draft law on granting the right to place it at banks to the Government was proposed. (more…)

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206.7 thousand shares were sold at the MSE

206.7 thousand shares of 22 SHC were sold at the MSE totaling 37.9 million MNT trade. 116.8 thousand Remicon share and 1.5 thousand Monfresh share were sold at the primary market.  42.6 thousand shares of Hermes Center were sold and it was the most actively traded shares at the stock market. In comparison to the previous day’s trade, APU share price was increased by 14.9% and MAH impex share price by 13.64%, but Anod bank share price was decreased by 7.64% and Guril tejeel bulgan by 11.76%.

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Petrol price has reduced further

Petrol price has reduced by 60-150 MNT from yesterday. In Relation to this news petrol importing companies are urging other companies and businesses to reduce their prices of goods and services as price of petrol have become more affordable and it is looking to reduce further. The most important issue is that public expects a reduction in the cost of public transport and taxi services.
Vanchigmaa, Finance Department Director of Public Transport is investigating this matter and she has said “Due to a constant decrease in price of petrol we have started planning to reset the tariff of the transport system”.

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Minister for Finance was told to finalize the price prediction of copper commodity

The Standing Committee on Budget of the State Great Khural has discussed about the budget of year 2009. MPs exchanged their opinions and discussed about the budget of the Mongolia Development Fund. As it is impossible to calculate budget revenue of year 2009, the Ministry of Finance has developed seven alternatives. Standing committee on budget has agreed to pick one of these alternatives to estimate the budget revenues and costs of year 2009. Therefore the Minister for Finance was instructed to finalize the price prediction of copper commodity by tomorrow morning.

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Dr. Graeme Hancock, senior mining specialist for the World Bank’s Oil, Gas and Mining Policy Division: Mongolian banks are potential

Dr. Graeme Hancock, senior mining specialist for the World Bank’s Oil, Gas and Mining Policy Division has his opinion towards the Mongolian economy and mining.

Q: Can you share the goal of Discover Mongolia Forum and its result?
Dr. Graeme Hancock: Forum set forth many targets. The main issue was the investors to summon in Mongolia and exchange their experiences and comment on the expecting mineral law of Mongolia. As the result, they get to know about drafting the mineral law progress and found out that the investment agreement achievements.

Q: How would you evaluate the Mongolian mining sector?
Dr. Graeme Hancock: We see copper price fall recently. There are several unclear things in the Mongolian mining sector. But they will be much clear with the expecting Mineral Law of Mongolia. As for today, it is important to reach common understanding on cooperation with the Government of Mongolia. I think it is closer now. It is hard to evaluate right at the moment. (more…)

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M.Enkhsaikhan: We should approach to IMF like others do

Foreign currency reserve was 1 billion US$ and it is decreased down to 700 million US$. Mr M.Enkhsaikhan, former Prime Minister and Deputy Prime Minister of Mongolia, has his views.

Q: You and your party warned about the world economy crisis much before the election. What was the reason of your prediction and why you warned it instead of economists?
M.Enkhsaikhan: Before the election, there were enough warnings about food crisis. When food price increased, people are getting poor. We warned about it. I also mentioned about that we Mongolians and our Government and State are not ready for the big crisis, changes and challenges. Today, the world crisis shall affect us and our economy in minor or major scale. These politicians have to worry about how to get through it easily and with less loss. I hope that the State Great Khural and Government worry about it already. (more…)

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Establishment of “Development Bank” was included in the main principle

The main principle to develop economy and society in year 2009 was discussed by the State Great Khural. The draft of the main principle to develop economy and society of Mongolia in year 2009 was presented by the Minister for Finance S.Bayartsogt. When developing the draft, it was based on the mid term plan and evaluation and conclusion of economy and society of this year. Minister briefly introduced the background of this year’s development in economy and problems. He also continued that Mongolian economy is the highest in Asia with its inflation rate. But the urgent reaction of Government such as Atar III campaign, compensation on price difference, establish state reserve, soft agreement on wheat and grain import, was essential to harness soaring inflation. (more…)

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