1 IRKUTSK REGION SUPPLIES USD 31 MILLION PRODUCTS TO MONGOLIA WWW.MONTSAME.MN PUBLISHED:2018/11/20      2 27 PARLIAMENT MEMBERS SUBMIT PETITION ON CABINET DISSOLUTION WWW.ZGM.MN PUBLISHED:2018/11/20      3 AIRBNB IS USING WHAT3WORDS TO LIST STAYS WITH MONGOLIAN NOMADS WWW.TECHCRUNCH.COM PUBLISHED:2018/11/20      4 LOCAL PRECIOUS METAL ASSAY LABORATORY PURIFIES 99 KG OF GOLD WWW.MONTSAME.MN PUBLISHED:2018/11/20      5 LEGISLATOR OF MONGOLIA'S RULING PARTY SUBMITS PROPOSAL ON DISMISSING GOVERNMENT WWW.XINHUANET.COM PUBLISHED:2018/11/20      6 SHOCK DECISION: CHINA CLOSES BORDER TO COAL IMPORTS FROM MONGOLIA WWW.NEWS.MN PUBLISHED:2018/11/20      7 STRATEGY INTRODUCED TO FOSTER PRIVATE SECTOR IN WESTERN MONGOLIA WWW.MONTSAME.MN PUBLISHED:2018/11/20      8 MONGOLIA TO STRENGTHEN ECONOMIC TIES WITH RUSSIA WWW.XINHUANET.COM PUBLISHED:2018/11/19      9 VOLKSWAGEN TO SPEND $50 BILLION ON ELECTRIC CAR 'OFFENSIVE' WWW.CNN.COM PUBLISHED:2018/11/19      10 HABITABILITY OF MONGOLIA UNDER THREAT FROM CLIMATE CHANGE WWW.ADELAIDENOW.COM.AU PUBLISHED:2018/11/19      ЭРЧИМ ХҮЧНИЙ ИХ АЧААЛАЛ 973 МВТ-Д ХҮРЧЭЭ WWW.EAGLE.MN НИЙТЭЛСЭН:2018/11/20     ЗАСГИЙН ГАЗРЫГ ОГЦРУУЛАХ БИЧИГ ӨРГӨН БАРЬСНЫ ДАРАА "ГЭРЭГЭ" БОНДЫН ХАНШ БУУРЛАА WWW.BLOOMBERGTV.MN НИЙТЭЛСЭН:2018/11/20     ХАЙНАНЬД ЗУГААЛАХ ГЭСЭН МОНГОЛЧУУД УЛААН-ҮҮДЭЭС НИСЭХ ТАСАЛБАРЫГ ХУУ ХАМЖ БАЙНА WWW.UNUUDUR.MN НИЙТЭЛСЭН:2018/11/20     ГАШУУНСУХАЙТ БООМТ: ЖОЛООЧ НАРЫН МЭДЭЭЛЛИЙГ УРЬДЧИЛАН ЯВУУЛАХ БАЙДЛААР АСУУДЛЫГ ШИЙДВЭРЛЭХЭЭР БНХАУ-ТАЙ ТОХИРОЛЦЛОО WWW.GOGO.MN НИЙТЭЛСЭН:2018/11/20     ЗАМЫН НӨХӨӨС, 100 ГАРУЙ ТӨРЛИЙН РЕЗИНЭН БҮТЭЭГДЭХҮҮН ДОТООДОД ҮЙЛДВЭРЛЭЖ БАЙНА WWW.BLOOMBERGTV.MN НИЙТЭЛСЭН:2018/11/20     АЛТНЫ ОЛБОРЛОЛТ ЭДИЙН ЗАСГИЙГ ДЭМЖИЖ БАЙНА WWW.ZGM.MN НИЙТЭЛСЭН:2018/11/20     МОНГОЛЫН АНХНЫ ХУВИЙН ХӨРӨНГИЙН БИРЖИЙН ХОЁР ДАХЬ БҮТЭЭГДЭХҮҮН: “ПАРК ТАУН” БОНД WWW.GOGO.MN НИЙТЭЛСЭН:2018/11/20     МОНГОЛ, ОХУ-ЫН ТЭЭВРИЙН САЛБАРЫН ХАМТЫН АЖИЛЛАГААГ ӨРГӨЖҮҮЛНЭ WWW.MONTSAME.MN НИЙТЭЛСЭН:2018/11/20     БНХАУ-ЫН ОЛОН УЛСЫН ИМПОРТЫН ҮЗЭСГЭЛЭН БНХАУ-ОХУ-ЫН БИЗНЕСИЙН ХАРИЛЦААГ ӨРГӨЖҮҮЛЛЭЭ WWW.MONTSAME.MN НИЙТЭЛСЭН:2018/11/19     АМЧАМ МОНГОЛ 2018 ОНЫ ЖИЛИЙН ТАЙЛАНГИЙН ХУРЛАА АМЖИЛТТАЙ ЗОХИОН БАЙГУУЛЛАА WWW.IKON.MN НИЙТЭЛСЭН:2018/11/19    

Events

Name organizer Where
Frontier's "Invest Mongolia Tokyo 2018" Frontier Securities Tokyo Japan
"Open to Export" ICC WTO International business award ICC WTO London

NEWS

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Korean investment ‘positive catalyst’ to Mongolian stock market: MSE chief www.koreaherald.com

The Mongolian Stock Exchange chief hailed South Korean financial companies’ engagement with its fledging stock market as a “positive catalyst” in its search for increased attention from foreign investors.

Speaking in an interview with The Korea Herald, Altai Khangai, chief executive officer of the MSE, cited the initial public offering of LendMN, Mongolia’s first financial technology company that began trading in March, as well as another upcoming IPO involving Korean investments.

Seoul-based institutional investor Rhinos Asset Management carried out a strategic acquisition of 4.5 percent of LendMN shares worth some $370,000 in the $2 million IPO deal, while Korean securities firm Mirae Asset Daewoo’s Mongolian underwriter unit led the listing procedure of the company.

Such an example of institutional capital investment played a pivotal role in the market that has sought to invite more divergence, the top market operator said in the telephone interview.

“(Rhinos Asset Management’s investment) was a positive catalyst to bring in international investors into the Mongolian market,” Khangai said, adding that the underwriter, Mirae Asset Securities Mongolia, “served as the ground” for more Asian investments.

Both firms marked the first Korean entities to be engaged in a Mongolian IPO.

LendMN is an instant lending service provider run on artificial intelligence through smartphones. After gaining regulatory approval in February, the company began trading on the tier-three market of the MSE on March 14.

Since then, LendMN has been one of the most actively traded stocks on the MSE. Each week since going public, LendMN has been picked as one of the top-five stocks with the highest weekly trading volume out of all 218 listed companies.

“The IPO of LendMN was a great addition to the MSE pool of stocks as the first fintech company to be listed on MSE.” Khangai said.

In addition, Khangai said he was pinning hopes on another IPO of a manufacturer led by local underwriter Gauli Investment Securities, involving an undisclosed amount of Korean investment. He declined to comment on details because the IPO has yet to gain financial authorities’ approval.

Korean institutional investors’ shift in focus -- from bonds to equities in Mongolia -- came as a surprise to Khangai.

“Korean investors are among the most active investors for local government bonds,” he said. “However, their participation in the equities market (had) been relatively limited.”

With a few market heavyweights holding sway, a boom in the Mongolian stock market re-emerged in 2017, after years of ups and downs since its heyday in 2011.

Leading the stock bull run in the landlocked country were partially state-owned coal miner Tavantolgoi and alcohol beverage maker APU.

If combined, the two account for nearly half of the total market cap made up of 218 constituents. The combined market cap of all MSE-listed firms came to some 2.5 trillion Mongolian tugrik ($1 billion) as of late April.

Both companies’ stock prices nearly doubled, while the MSE’s benchmark top-20 index surged over 50 percent. Total market cap topped the 2 trillion-tugrik mark in September 2017, for the first time in 5 1/2 years.

The renaissance of the market, on the other hand, exposed the stock markets’ chronic reliance on the performance of a few giants dedicated to the nontertiary sector, leaving the market susceptible to price volatility in commodity prices and the volume of resources exports to the adjacent China.

“As a country dependent on coal exports, the performance (of giants) had the most impact on the growth of the Mongolian capital market.” Khangai said.

In the long term, the market operator found it vital to boost the confidence of foreign investors through market diversification.

“We are working toward diversification of the listed companies, and LendMN (IPO) was a big step,” Khangai said. “(The LendMN IPO) may inspire other similar companies to come on to the market.”

To draw more attention from foreign investors, carrying out a trading system overhaul is crucial, he added, so that it can re-enter the Frontier Markets Watchlist of FTSE Russell.

The MSE was removed from the watchlist in September, due to a delay in compliance with the requirements in the trading system, such as adopting the T+2 settlement system, payment mechanism and global custodian presence.

“We are aware of the need to facilitate the post-trading environment for market players, both foreign and local ... in order to bring in more investors and make the standards more international,” he said.

By Son Ji-hyoung

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Erdenes Tavan Tolgoi JSC to make a deal with Chalco www.gogo.mn

According to Erdenes Tavan Tolgoi JSC's (ETT) contract with Aluminum Corporation of China Limited (Chalco), ETT coal from Zuun Tsankhi is sold for 59.33 USD per ton.

Acting CEO of Erdenes Tavan Tolgoi JSC B. Gankhuyag reported that the company sells coking coal from Baruun Tsankhi for 68.1 USD per ton and energy coal for 12 to 16 USD per ton. ETT has proposed raising Chalco's price for coal to 62 USD, and is planning to make a new deal with the company on May 10.

B. Gankhuyag also noted that ETT will explore the possibility of enriching its coal at the Energy Resources plant in the second quarter of 2018. ETT exported 8.5 million tons of coal in 2017, accounting for 25 percent of the nation's coal export volume.

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Livestock birthing at 52.1 percent www.gogo.mn

Ulaanbaatar /MONTSAME/ More than 14 million or 52.1 percent of total dams have delivered offspring on the national level.

This means an increase in the number of camel by 47.9 thousand, horse by 216 thousand, cattle by 506.9 thousand, sheep by 7 million 697 thousand and goat by 5 million 460 thousand. The number of offspring increased by 2.7 million against the previous week.
Kh.Aminaa

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Nalaikh district challenged by instability of thermal power plant www.montsame.mn

Ulaanbaatar /MONTSAME/ The most pressing issues in Nalaikh district are lack of heat supply and apartment re-planning, according to its Governor Ch.Radnaabazar, who reported these issues during a meeting of the managerial staff of the capital city administration on May 7.

“Heating is a number one issue in the district with the Nalaikh Thermal Power Plant overworking its capacity. Since the demand increases every year, we are developing a project to expand the power plant,” he said.

As for apartment re-planning, there are 101 buildings and facilities built with engineering design and 32 two-storey buildings that were built between 1956-1957. “Dwelling in these buildings was prohibited by the General Agency for Specialized Inspection in 2014. This is a worrisome matter that the residents still live in these buildings today,” the Governor said.

Nalaikh district has a population of 37 thousand, majority of which are youths. “If we ensure the economic independence of Nalaikh district and establish an industrial and technological park, we could create 1,500 new jobs, increase the production of construction material twice on the national level and significantly benefit,” he highlighted.
Kh.Aminaa

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Nestle pays Starbucks $7.1bn to sell its coffee www.bbc.com

Nestle has announced that it will pay Starbucks $7.1bn (£5.2bn) to sell the company's coffee products.

The Swiss giant, which boasts Nescafe and Nespresso amongst its brands, will have the right to market Starbucks' coffee in retail outlets outside the cafe chain.

That part of the business currently generates $2bn in annual sales.

The deal means Nespresso machine owners will be able to buy Starbucks coffee branded pods for use at home.

Consumers will also find Starbucks coffee beans, ground and instant coffee more readily available as Nestle, the world's largest food and drinks company, uses its vast distribution network to market Starbucks products worldwide.

Nestle's name will not appear alongside Starbucks's, but the deal could still help Nestle strengthen its US business, thanks to the powerful High Street coffee brand.

Boil it all down and this is a giant licensing arrangement, whereby Nestle is allowed to sell Starbucks products through Nestle distribution channels.

That means you'll see a lot more Starbucks branded coffee pods for use in Nespresso or Dolce Gusto devices which are all the rage - thanks in part to those George Clooney adverts.

Starbucks will continue to buy the raw (green) coffee beans from farmers but now Nestle will step in and roast and prepare those beans for consumers under strict Starbucks licensing rules. Nestle will not acquire any Starbucks infrastructure nor will any Nestle products appear in Starbucks coffee shops.

For that arrangement, Nestle is paying $7bn because it believes Starbucks products will appeal to premium coffee lovers around the world.

Despite the price tag, Nestle shareholders appear to like the deal. Nestle shares rose 1.5% today. While Starbucks investors kind of shrugged.

Mark Schneider, who in 2016 became the first outsider to run Nestle in almost 100 years, is attempting to boost the company's profit through expansion.

Last year, Nestle paid an estimated $425m for a 68% stake in Blue Bottle Coffee, a California-based company that sells coffee to customers online and has a number of shops in the US and Japan.

Kona Haque, of the commodities trading company ED&F Man said Nestle was aiming to further strengthen its position in the US market through this latest deal.

"At the moment Nestle is very much known for its instant coffee. This is an opportunity to go into roast and ground which for today's millennials is a big growing trend," she said.

Mr Schneider described the "global coffee alliance" with Starbucks as "a great day for coffee lovers around the world".

Nestle said 500 Starbucks employees will transfer over to its business but they will continue to be located in Seattle, which has been the group's headquarters for the last 47 years.

The company recently sold its US sweets and chocolate business, including brands such as Crunch and Butterfinger, to Ferrero Group for 2.7bn Swiss francs (£1.9bn).

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China's imports from Belt and Road countries grow faster than exports www.chinadaily.com.cn

BEIJING - China's imports from "Belt and Road" countries increased faster that of exports for the first time in 2017, according to a think tank report.

The value of China's imports from Belt and Road countries stood at $666 billion in 2017, an increase of 20 percent year-on-year, or 39 percent of China's total imports value, according to a report compiled by the State Information Center, a State Council think tank.

In the same year, China's exports to those countries came in at $774.26 billion, a rise of 8.5 percent year-on-year. The growth of imports outpaced exports for the first time since the Belt and Road Initiative was proposed five years ago.

China's combined trade with those countries reached $1.44 trillion, up 13.4 percent year-on-year, 5.9 percentage points faster than China's overall trade growth.

The Belt and Road Initiative was proposed by China in 2013 to boost trade and investment among countries along the ancient Silk Road trade routes from Asia to Europe and Africa.

China's trade with Central Asia countries grew at the fastest rate, followed by Eastern Europe. Countries including Republic of Korea, Vietnam, Malaysia, India and Russia rank among China's top 10 trading partners along the routes, contributing nearly 70 percent of China's trade with Belt and Road countries.

China mainly sells mechanical and electrical products to Belt and Road countries, and imports mechanical and electrical products as well as fossil fuel from them, the report said.

Chinese private companies do the biggest chunk of trade, followed by foreign-invested companies and State-owned firms.

Yu Shiyang, director of the department of big data development under the State Information Center, said that amid rising protectionism by some countries, China's trade with Belt and Road countries had risen at a brisk pace, showing the initiative was being implemented well, featuring free trade flow.

The report covers 71 countries along the Belt and Road summarizing the current trade picture and projecting future trends.

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Milk processing small plants to be established in six soums www.montsame.mn

Ulaanbaatar /MONTSAME/ On May 4, equipment of milk processing small plant were handed over to six soums of four aimags within the framework of a project ‘Increasing Job in Mongolia: Development of Value Added Network of Animal Product and Vegetable Production with Participation of Private Sector’.

Milk processing small plants named 'Ger kitchen’ are planned to be built in six soums in scope of UNFAO technical cooperation program ‘Improving Local Dairy Processing through promoting women’ (TCP/MON/3606), the subproject of the abovementioned project.

Each milk processing small plant will have daily capacity of processing up to 500 liter milk and producing 5-6 types of dairy products using up-to-date technology. Operation of a plant is expected to provide ten people with jobs and to make annual sale of MNT 127.9 million, earning MNT 7.1 million net profit.

Furthermore, 12 people who involved in teacher training conducted trainings to more than 120 women from six local milk processing groups on methods and practices to process traditional dairy products that meet food standards and sanitary requirements using ‘Ger kitchen’ equipment. The project is making contribution to develop production of diary products in rural area, to introduce modern technology and to increas types of products.

B.Batchimeg

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Balance of payments deficit falls 20 percent month over month www.ubinfo.mn

As of March, balance of payments deficit was USD 87.6 million, which is 20 percent lower compared to the previous month. Current account balance indicates a loss of USD 424 million.

Foreign trade balance resulted USD 352 million in profit as total export is currently higher than its import thanks to raw materials export. Therefore, goods account totalled USD 260.9 million.

In other words, while the goods account was profitable, the services account had USD 347.6 million deficit. In connection to tourists’ spendings, the outflow of foreign currency increased, which had impact on services account. In addition, balance of primary income account, which registers in and outflow of cash related to salaries and investment, had a deficit of MNT 386.4 million. This shows that outflow is dominant in the primary income account.

But the balance of financial accounts, which involves transaction of direct and portfolio investments, resulted with USD 332.2 million gains. In other words, financing of such amount was obtained from outside sources in the first three months. Furthermore, the private sector brought in a total of USD 552.9 million FDI, including debt instruments, in the first quarter of this year.

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Commercial banks grant MNT 49.5 billion mortgage loans to 495 applicants in March www.ubinfo.mn

According to the data provided by the Bank of Mongolia (BoM), a total of 585 mortgage loan applications were submitted to the bank in March. This is the highest number of applications in the first quarter. As such, 495 citizens were granted a total of MNT 49.5 billion as mortgage loan, of which over 50 percent were financed from commercial banks. Accordingly, the total balance of mortgage loan reached MNT 4.2 trillion.

Minister of Construction and Urban Development Badelkhan Khavdislam informed that the ministry is planning to grant MNT 220 billion mortgage loan from the repayment of BoM and MNT 120 billion from the State Budget. The State Budget funding is granted quarterly for the loan, while the BoM monthly transfers the finances. However, the mortgage loan is under deficit, the Minister noted. Therefore, a new regulation for the loan has been formulated and submitted to the Cabinet in order to increase accessibility. According to an estimate, the current financial sources of the mortgage program can only cover 5-6 thousand households.

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Spring cultivation commences www.ubinfo.mn

A total of 60 thousand tons of seed is required for spring cultivation of wheat this year. According to the Ministry of Food, Agriculture and Light Industry, 50.8 thousand tons were collected domestically and eight thousand tons were imported. In addition, six business entities, which requested to renovate their seeds at their own expenses, have been granted licenses for importing 2 thousand tons of wheat for producing seeds.

The ministry signed contracts with over 300 companies and individuals for granting 16.5 thousand seeds.

According to an estimation, a total of 7800 tons of diesel fuel is required for normal cultivation process this year. Under the agreement signed between the Fund for Cultivation Support (FCS) and NIC LLC, 3500 tons of fuel is being granted with 50 percent prepayment loan through local gas stations. The fuel price was established at MNT 1720-1800 per ton for wholesale and MNT 1949-2080 per ton for retail.

As reported by the ministry, a total of 3230 tractors, 2254 seeders for wheat, 5424 soil processing equipment, potato and vegetables cultivation seeders are required for the 2018 spring cultivation. The Ministry is organizing a purchase of agricultural and watering equipment from the fund of Chinese Government soft loan under relevant rules. In cooperation with the Development Bank of Mongolia, the ministry is implementing Agricultural Equipment Leasing project and conducting talks on purchasing agricultural equipment from Russia, Belarus and Germany.

Furthermore, the ministry has formulated a draft bill on customs duty exemption of agricultural equipment, fertilizer and plant protection products. Presently, proposals on the bill are being collected from stakeholders of the industry. The draft will soon be submitted to the Cabinet for discussion. In addition, the FCS is granting agricultural equipment including mid-size tractors with a loan that has 7-9 years maturity and 10 percent prepayment.

As of today, cellars throughout the country are capable of storing 56 percent of harvested potato and vegetables for the population needs. Therefore, the ministry is making efforts in increasing the capacity of storages, which include a project on establishing an elevator with a capacity of 15 thousand tons in Selenge with Russian soft loan, and cellars for storing potatoes and vegetables in Selenge, Bayan-Olgii and Khovd aimags with MNT 1.2 billion financing from the State Budget. In addition, Fruits and Berries, and Vegetables national programs were approved by the Cabinet early this spring.

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