1 FRONTIER'S "INVEST MONGOLIA TOKYO 2018" WWW.MONGOLIANBUSINESSDATABASE.COM PUBLISHED:2018/09/19      2 U.S.-CHINA TRADE TUSSLE IS CREATING WINNERS IN SOUTHEAST ASIA WWW.BLOOMBERG.COM PUBLISHED:2018/09/19      3 YUSAKU MAEZAWA: THE JAPANESE BILLIONAIRE WHO WANTS TO FLY TO THE MOON WWW.BBC.COM PUBLISHED:2018/09/19      4 MONGOLIAN FOREIGN MINISTER RECEIVES CARDANO BLOCKCHAIN FOUNDER WWW.NEWS.MN PUBLISHED:2018/09/19      5 ERDENE ANNOUNCES RESOURCE ESTIMATE FOR THE HIGH-GRADE KHUNDII GOLD PROJECT WWW.GLOBENEWSWIRE.COM PUBLISHED:2018/09/19      6 RUSSIAN GIANT COPPER PROJECT IN TALKS TO RAISE $1.25B WWW.REUTERS.COM PUBLISHED:2018/09/19      7 MONGOLIA GRADUALLY WITNESSING PROGRESS IN TOURISM WWW.TRAVELANDTOURWORLD.COM PUBLISHED:2018/09/19      8 CHINA, MONGOLIA, RUSSIA PUSH FOR ‘ECONOMIC CORRIDOR’ WWW.RUSSIABUSINESSTODAY.COM PUBLISHED:2018/09/19      9 EXPERTS FROM CHINA, MONGOLIA, RUSSIA TALK ON CONSTRUCTION OF ECONOMIC CORRIDOR WWW.XINHUANET.COM PUBLISHED:2018/09/19      10 PM U.KHURELSUKH PAYING AN OFFICIAL VISIT TO THE UNITED STATES WWW.MONTSAME.MN PUBLISHED:2018/09/18      ШЕНГЕНИЙ БОГИНО ХУГАЦААНЫ ВИЗИЙН МЭДҮҮЛГИЙГ УЛААНБААТАР ХОТОД АВНА WWW.MEDEE.MN НИЙТЭЛСЭН:2018/09/19     2018 ЭХНИЙ 7 САРД МОНГОЛЧУУД ГАДААД РУУ ЭМЧИЛГЭЭНД ЯВАХДАА 19.5 САЯ АМ.ДОЛЛАР ЗАРЦУУЛЖЭЭ WWW.BLOOMBERGTV.MN НИЙТЭЛСЭН:2018/09/19     ӨНӨӨДӨР ТӨВ ТАЛБАЙД 4000 АЖЛЫН БАЙРАНД БҮРТГЭНЭ WWW.DNN.MN НИЙТЭЛСЭН:2018/09/19     ЗАЛУУЧУУДЫН ГАРААНЫ БИЗНЕСИЙН ШАЛГАРСАН ТӨСӨЛД 10,0 САЯ ТӨГРӨГИЙН ДЭМЖЛЭГ ҮЗҮҮЛЛЭЭ WWW.MONTSAME.MN НИЙТЭЛСЭН:2018/09/19     WORLD ECONOMICS: МОНГОЛЫН АЖИЛ ЭРХЛЭЛТИЙН ТҮВШИН СҮҮЛИЙН 5 ЖИЛИЙН ДЭЭД ТҮВШИНД ХҮРЛЭЭ WWW.BLOOMBERGTV.MN НИЙТЭЛСЭН:2018/09/19     ERD: "ХӨНДИЙ" АЛТНЫ ТӨСЛИЙН ТОГТООГДСОН НӨӨЦ 751 МЯНГАН УНЦ АЛТ WWW.BLOOMBERGTV.MN НИЙТЭЛСЭН:2018/09/19     ХЯТАДЫН $200 ТЭРБУМЫН ИМПОРТОД ТАРИФ ТОГТООВ WWW.ZGM.MN НИЙТЭЛСЭН:2018/09/19     ШИВЭЭХҮРЭН БООМТООР ХОНОГТ 60-80 МЯНГАН ТОНН НҮҮРС ЭКСПОРТОЛЖ БАЙНА WWW.GOGO.MN НИЙТЭЛСЭН:2018/09/19     БНХАУ-ЫН 200 ТЭРБУМ АМ.ДОЛЛАРЫН ИМПОРТОД 10 ХУВИЙН ТАРИФ НОГДУУЛАХ ШИЙДВЭР ИРЭХ 7 ХОНОГООС ХЭРЭГЖИНЭ WWW.BLOOMBERGTV.MN НИЙТЭЛСЭН:2018/09/18     ӨВӨЛ ЦАХИЛГААН СААТВАЛ ХОТ ДӨРВӨН ЦАГИЙН ДОТОР Л ХӨЛДӨНӨ WWW.ZGM.MN НИЙТЭЛСЭН:2018/09/18    

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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Industrial park and new town plan www.news.mn

Mongolia has 66 million livestock; however, there is a lack of leather and meat processing factories. B.Batzorig, Minister of Food, Agriculture and Light Industries has said his ministry is planning to establish a Leather & Wool Industrial Park in Emeelt, outside Ulaanbaatar. The park will have tanneries with an annual processing capacity of 8 million hides; there will also be facilities for processing 22 thousand tonnes of cashmere. In order to provide the workforce for the processing plants a new town 30 thousand will be built.

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Mongolia ranks 125th place in Economic Freedom Index www.akipress.com

Mongolia’s economic freedom score is 55.7, making its economy the 125th freest in the 2018 Economic Freedom Index by the Heritage Foundation.

Its overall score has increased by 0.9 point, with improvements in monetary freedom, fiscal health, and judicial effectiveness outweighing declines in the government integrity, labor freedom, and government spending indicators. Mongolia is ranked 27th among 43 countries in the Asia–Pacific region, and its overall score is below the regional and world averages.

After the collapse of the Soviet Union, landlocked Mongolia undertook market reforms and extensively privatized its formerly state-run economy. Foreign direct investments to extract its substantial mineral resources transformed the economy. The current government has tried to restore investor confidence but has failed to invigorate the economy in the face of the large drop-off in FDI, mounting external debt, and a sizeable budget deficit. Weak rule of law and lingering corruption are
additional drags on the economy.

Trade is significant for Mongolia’s economy; the combined value of exports and imports equals 98 percent of GDP. The average applied tariff rate is 4.6 percent. Nontariff barriers impede trade. Government openness to foreign investment is below average. The financial system has undergone modernization, and the banking sector has become largely stable.

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Lenovo back on the growth track www.chinadaily.com.cn

Despite achieving a three-year revenue high in the last quarter, Lenovo Group Ltdthe world's second-largest personal computer maker-posted a loss due to a one-off charge of $400 million resulting from a United States tax reform, the company said on Thursday.

Yang Yuanqing, CEO and chairman of Lenovo, said the Beijing-based company has moved back onto the growth track, and the US corporate tax reform would not have negative impact on future earnings of its operations in the country.

Lenovo recorded a loss of $289 million in the last quarter of 2017, compared with an average forecast of a $124.5 million profit compiled by Bloomberg. The company said its pre-tax profit hit $150 million, up 48 percent year-on-year.

After struggling in both the personal computer and smartphone businesses in recent quarters, Lenovo said its hardest period is nearing an end, and it is reviving good growth momentum.

The company's revenue increased 6 percent year-on-year to reach $12.94 billion, marking the best performance in three years.

"Lenovo has re-entered the ascending track. As the PC market bounces back to growth, our core business will see an evident rise," Yang said.

In the three months ended in December, Lenovo's PC unit sales rose 8 percent, thanks to higher average selling prices driven by innovative products and a better product portfolio.

In the same time frame, global PC shipments rose for the first time in six years, albeit by less than 1 percent, according to market research company IDC. But HP Inc expanded its lead over Lenovo, its closest rival.

"We had been more conservative than HP in the past several quarters, especially in the North American market. But we are readjusting our strategies," Yang said.

When it comes to the mobile phone business, the company saw a narrower loss, with more efforts made to sharpen their focus on user experience.

Xiang Ligang, CEO of telecoms industry website Cctime, said Lenovo still faces mounting competition from rivals. It will still take time for the company to come up with competitive smartphone models that can resonate with consumers, he said.

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Fitch expects to rate MAK, proposed bonds 'CCC+(EXP)' www.montsame.mn

Ulaanbaatar /MONTSAME/ Fitch Ratings expects to assign Mongolia-based coal mining company Mongolyn Alt (MAK) LLC a Long-Term Issuer Default Rating (IDR) of 'CCC+(EXP)'. Fitch has also assigned the company's proposed US dollar senior unsecured notes an expected rating of 'CCC+(EXP)' with a Recovery Rating of 'RR4'.

The ratings are based on the capital structure and liquidity of MAK assuming it completes the proposed bond deal and a debt restructuring. The company plans to repay some of its existing loan facilities that are in default, with proceeds from the proposed bond. The remaining loans will be restructured based on terms outlined in the signed consents and waivers from each respective lender, which have been reviewed by Fitch.

The final ratings are contingent upon successful issuance of the proposed bond and completion of the restructuring in line with the terms already received, and upon receipt of final documents conforming to information already received. Fitch thinks there is minimal risk that the terms of the restructuring will be amended by both MAK and the lenders after the bond issue.

The Long-Term IDR reflects Fitch's expectation that MAK's liquidity and debt maturity profiles will be adequate after the planned bond issue and restructuring of the remaining debt. The rating also incorporates Fitch's expectation that the company will be able to generate positive free cash flows over the medium term, barring a significant deterioration in coal prices. This is based on the assumption that MAK will be able to reduce production costs and capex during moderate coal price weakness. These expectations are counterbalanced by MAK's history of aggressive debt-funded investments, and limited access to external funding, which may heighten the company's liquidity risk if there is a sharp, sustained coal price or demand downturn and unfavourable capital market conditions.
Kh.Aminaa

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UK says signs over 9 billion pounds in deals during PM's China trip www.reuters.com

SHANGHAI (Reuters) - Britain signed deals worth more than 9 billion pounds ($12.83 billion) creating over 2,500 jobs across the United Kingdom during Prime Minister Theresa May’s visit to China this week, the British government said on Friday.

“The agreements signed this week, valued at more than 9 billion pounds, demonstrate a clear demand for British goods and services,” International Trade Secretary Liam Fox said in the statement.

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Alibaba to buy 33% of spinoff Ant Financial www.asia.nikkei.com

HONG KONG -- China's largest e-commerce company, Alibaba Group Holding, said Thursday that it has agreed to buy a 33% stake in Ant Financial Services Group, a mobile payments affiliate controlled by Alibaba founder Jack Ma Yun.

Under a deal announced the same day as better-than-expected quarterly earnings, Alibaba will buy new shares in the operator of the popular Alipay payment service in exchange for certain intellectual property rights owned by the e-commerce giant. There will be no cash impact on Alibaba following the closing, it said.

The move will align the duo's interests further in areas including user acquisitions from offline and online platforms and international expansion, Alibaba Executive Vice Chairman Joseph Tsai said in a conference call. Their strategic partnership dates back to 2014, when Alibaba and Ant Financial reached a profit-sharing agreement.

This will mark Alibaba's first investment in the affiliate, valued at more than $74 billion by Hong Kong-based brokerage CLSA in 2016.

Alipay was established in 2004 under Alibaba but spun off as a separate entity in 2011 to come under the control of Ma. The move, which followed regulations requiring third-party payment services to be wholly owned by Chinese companies or individuals, led to a dispute between Alibaba and foreign shareholders SoftBank Group of Japan and Yahoo of the U.S.

Alibaba's reunion with Ant Financial is also seen as preparation for the affiliate's anticipated public listing in addition to fueling its global acquisition drive. Tsai said Alibaba expects Ant Financial to continue its fairly aggressive plan to continue to gain more new users and take market share. The agreement comes not long after Ant Financial's plans to acquire U.S. money transfer company MoneyGram International fell through. That deal failed to win approval by the U.S. government over national security concerns last month.

Meanwhile, Alibaba's revenue jumped 56% on the year to 83.02 billion yuan ($13.18 billion) for the three months ended December, supported by Chinese consumers' enthusiasm for online shopping. This compared to the average estimate of a 49.95% rise to 79.84 billion yuan by analysts polled by Thomson Reuters. The company's bread-and-butter commerce segment continued to drive growth, especially with a push from China's biggest shopping event on Nov. 11.

For the event -- Singles Day -- Alibaba claimed to have broken its own record again by selling $25.3 billion of goods on that day alone, 40% more than last year. Alibaba also has been pushing its artificial intelligence technologies to attract customers through personal recommendations.

Its cloud computing business also reported revenue growth of 104% on the year to 3.59 billion yuan, pushed by increasing paying customers and more customers willing to pay for higher-value-added products, the company said. Karen Chan, equity analyst at Jefferies, said in a recent report: "We estimate Alibaba Cloud to reach breakeven with 3.2% operating margin by fiscal year 2019."

Alibaba also accelerated its push into offline retailing, aiming to pull customers into its empire. In November, the company said it would invest 22.4 billion Hong Kong dollars ($2.86 billion) in China's top hypermarket operator, Sun Art Retail Group. Looking ahead, the company pledged to double its Hema supermarket branches by the end of 2018. Hema customers will be able to receive fresh products in about 30 minutes after clicking from an additional 30 stores in Beijing and three new ones in Xian by the end of 2018.

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Germany Approves Gazprom Pipeline In Territorial Waters, Despite U.S. Opposition www.themoscowtimes.com

Russia’s energy monopoly Gazprom has welcomed Germany’s approval of a multibillion-dollar gas pipeline to Europe that is viewed with suspicion by Moscow’s geopolitical rivals.

The Nord Stream 2 project announced Wednesday that it received a construction and operation permit from a northern German regional mining authority for a 55-km section of the gas 1,200-km pipeline off the Baltic Sea coast.

“This key decision opens the possibility of starting construction of the new Nord Stream-2 offshore gas pipeline’s most important section in German territorial waters,” Gazprom CEO Alexei Miller was cited as saying by Interfax on Wednesday.

The Stralsund Mining Authority issued the permit less than a week after top diplomats from the United States and Poland expressed strong opposition to the Nord Stream 2 pipeline.

“We see it as undermining Europe’s overall energy security and stability and providing Russia yet another tool to politicize energy as a political tool,” U.S. State Secretary Rex Tillerson said at the time.

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New airway to be opened between Mongolia and China www.montsame.mn

The agreement on opening new airway between Mongolia and China was reached during the official visit of the Minister of Road and Transport Development to People’s Republic of China.

In the second half of the year, the new airway will be open. To develop the tourism sectors of both countries, the Chinese asked Mongolia to increase the frequency of the Ulaanbaatar-Beijing-Ulaanbaatar flights, and to take action to support a proposal on codeshare between the Mongolian state enterprise MIAT and the Chinese state-owned "Air China". They also requested the Ulaanbaatar-Ulan Ude flights operated by “Hunnu Air” LLC to be extended to Ulaanbaatar-Ulan-Ude-Manzhouli-Ulan-Ude.

MIAT are planning flights to Chengdu and Guangzhou, China. The Minister of Road and Transport Development J.Bat-Erdene emphasized that this is a big step forward expanding tourism, investment and business sectors.

During the Ministers' meeting, a Memorandum of Understanding was signed between the Mongolian Maritime Administration and the Chinese Ocean Administration to cooperate in sharing experiences and training staff and other spheres. As a result, our two countries will cooperate in all areas of transportation sector.

The issues agreed during the visit will be concluded during an expecting visit of Prime Minister U.Khurelsukh to People’s Republic of China.

B.Misheel

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Mongolia,United Kingdom : EBRD and EU support expansion of Mongolian pharmaceutical company www.tendersinfo.com

Luvsan Khurelbaatar started a small pharmaceutical and cosmetics workshop in 1990, using locally-grown herbal ingredients to produce skin lotions, powders and solutions for respiratory diseases. Over the years, it grew into a large factory, with more and more people joining him.

Today, the workshop that became a factory has moved to a large industrial site on the outskirts of Mongolias capital Ulaanbaatar with the help of the EBRD.

Monos has turned into the largest player in the sector in the country: it employs more than 800 people and produces a wide range of cosmetic, medical and pharmaceutical products.

The EBRD has committed to provide a second loan of US$ 5.5 million to help Monos build a new production plant, develop training activities and support its wholesale business. The company aims to secure a certification of Good Manufacturing Practice (GMP) and to employ at least 30 new staff trained to GMP standards.

Long-term partnership for growth

Were the largest manufacturer in the Mongolian pharmaceutical market and it is very important to us to meet best manufacturing practices, said Anand Khurelbaatar, the companys CEO.

Our cooperation with the EBRD and various investments into both our equipment and processes are helping us to achieve this goal.

It takes a long time in the medical sector to create new products, usually five or six or sometimes even up to 15 years, he added. Thats why it is so vital to have a long-term partner, such as the EBRD, willing to invest and offer expertise.

The new production facility has allowed Monos to increase its capacity more than fourfold. Furthermore, the company has developed a strong portfolio which not only includes production but also research and development, drug wholesale, retail and distribution. The company is still owned by Luvsan Khurelbaatar and his family.

It was a very large and complex project in the medical sector one that was very important to both the Mongolian economy and its people, said the companys Chairman Mr Khurelbaatar.

Weve developed a lot of new products since we started working with the EBRD. This cooperation has provided us with a lot of new opportunities.

Building a competitive, diverse economy

Monos has also started to explore neighbouring markets. At the same time, several industry champions from Europe and east Asia have discovered the company and are interested in its production capacity.

The EBRDs investments in Monos are helping to build a more diverse economy in Mongolia. The European Union supports this project with funding aiming to improve access to finance and know-how in the country.

While the EBRD provided 52.7 million in total in investments, the EU has made available 9.3 million to support this finance.

The Bank has worked on various projects with Monos, supporting the company in its successive stages of expansions, said Irina Kravchenko, Head of the EBRDs Ulaanbaatar office.

It is one of many examples of how our work helps to develop the private sector and build competitive businesses in Mongolia.

This is a tangible example of how the EU and the EBRD can join forces to support the diversification of the Mongolian economy and increase employment at the same time, said Marco Ferri, Charg dAffaires of the EU Delegation to Mongolia.

We work together for the benefit of Mongolia and its citizens.

To date, the EBRD has invested over 1.4 billion in more than 90 projects in the country.

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Mongolian Foreign Minister to visit North Korea www.news.mn

D.Tsogtbaatar, Minister of Foreign Affairs of Mongolia is to make an official visit to Pyongyang on 3-6 February at the invitation of his North Korean counterpart Ri Yong-ho.

During the visit, D.Tsogtbaatar will meet Kim Yong-nam, President of the Presidium of the Supreme People's Assembly of North Korea and Ri Su-yong, director of the Foreign Affairs Committee as well as hold talks with Foreign Minister Ri Yong-ho.

Mongolia and North Korea are celebrating the 70th anniversary of the establishment of diplomatic relations this year. The last time, a Mongolian foreign minister visited Pyongyang was in 2010; the North Korean foreign minister last visited Ulaanbaatar in 2015.

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