1 ERDENES TAVAN TOLGOI REVENUE SURGES DUE TO HIGHER COAL PRICES WWW.NEWS.MN PUBLISHED:2018/09/20      2 RUSSIA AND MONGOLIAN BORDER CROSSING NO. 487 WWW.NEWS.MN PUBLISHED:2018/09/20      3 WORLD ECONOMICS REPORTS THAT MONGOLIA’S EMPLOYMENT RATE HITS A FIVE-YEAR HIGH WWW.GOGO.MN PUBLISHED:2018/09/20      4 USD HITS RECORD HIGH IN MONGOLIA DUE TO HIGHER IMPORTS WWW.CHINA.ORG.CN PUBLISHED:2018/09/20      5 READOUT OF VICE PRESIDENT MIKE PENCE’S MEETING WITH PRIME MINISTER UKHNAA KHURELSUKH OF MONGOLIA WWW.WHITEHOUSE.GOV PUBLISHED:2018/09/20      6 MONGOLIA LAUNCHES EU-FUNDED PROJECTS TO PROMOTE GREEN DEVELOPMENT, ENVIRONMENTAL PROTECTION WWW.XINHUANET.COM PUBLISHED:2018/09/20      7 COAL EXPORTS FROM TOP SHIPPER HOBBLED WITH MINERS FACING CONSTRAINTS WWW.MINING.COM PUBLISHED:2018/09/20      8 FRONTIER'S "INVEST MONGOLIA TOKYO 2018" WWW.MONGOLIANBUSINESSDATABASE.COM PUBLISHED:2018/09/19      9 U.S.-CHINA TRADE TUSSLE IS CREATING WINNERS IN SOUTHEAST ASIA WWW.BLOOMBERG.COM PUBLISHED:2018/09/19      10 YUSAKU MAEZAWA: THE JAPANESE BILLIONAIRE WHO WANTS TO FLY TO THE MOON WWW.BBC.COM PUBLISHED:2018/09/19      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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Renewables investment in UK will fall 95% over next three years – study www.theguardian.com

Investment in windfarms will fall off a “cliff edge” over the next three years and put the UK’s greenhouse gas reduction targets at risk, a thinktank has found.

More than £1bn of future investment in renewable energy projects disappeared over the course of 2016, the Green Alliance found when it analysed the government’s latest pipeline of major infrastructure plans.

Investment in wind, solar, biomass power and waste-to-energy projects will decline by 95% between 2017 and 2020, it added.

While a slowdown in green energy investment had been expected after ministers cut several subsidy schemes over the last 18 months, the figures lay bare the dramatic extent of the decline.

“This cliff edge needs to be avoided if the UK is to meet its world leading carbon budgets and Paris agreement pledge,” Green Alliance said in its analysis.

Shortly after the EU referendum, the government committed to cutting carbon emissions by 57% by 2030 on 1990 levels, but has so far failed to spell out how it will support low-carbon energy, such as offshore windfarms, beyond 2020.

“Renewables will be cheaper than new fossil power stations by 2025 at the latest if we allow companies to build, learn, and cut their costs. But the government has been holding back the final bit of support needed to make renewables subsidy free. It’s also blocked the cheapest renewables from being built,” said Dustin Benton, acting deputy director at Green Alliance, referring to the government ending subsidies for onshore wind. “Unsurprisingly, the result is a 95% fall in investment.”

The thinktank’s analysis found that high carbon infrastructure, which it defines as fossil fuel power stations, airports and road building, was faring little better. For the first time since 2012, high carbon investment had stopped growing, and will be down by two-thirds by 2020.

“The picture of private sector investment is very clear: it is rapidly moving away from high carbon infrastructure. In contrast, public sector high carbon investment is rising, although slowly,” the authors wrote.

RenewableUK, which represents the wind power industry, said the government needed to set out its vision on energy to enable investor confidence.

Emma Pinchbeck, the group’s executive director, said: “The energy sector is changing. The infrastructure pipeline shows that the private sector understands the smart money is on the renewables industry – that is why they are moving from high carbon assets to low carbon ones.”

But the infrastructure pipeline showed the government had managed to cut £2bn from the cost of decommissioning old nuclear power plants. The thinktank said that was good news as it could free up money to spend on encouraging people to switch to lower carbon heating, which ministers have admitted is progressing slowly.

A government spokesman said: “We are fully committed to a low-carbon future and the Office for Budget Responsibility recently projected that £8.4bn will be spent on renewable projects in the UK in 2020/21.

“We are one of the best countries in the world at tackling climate change with £52bn invested in renewable projects in the UK since 2010. Last November we reaffirmed our commitment to spend £730m of annual support on renewable electricity projects over this parliament.”

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Rosneft Privatization Deal Closed As Italian Financing Comes Through www.themoscowtimes.com

The tumultuous privatization saga of Russia’s largest oil company appears to be drawing to a close.

Swiss-British commodities trading firm Glencore and the Qatari Sovereign Wealth Fund have closed a deal to purchase 19.5 percent of state-controlled Rosneft, according to a statement on Glencore’s website.

The news was followed by an announcement that Italy’s Intesa Sanpaolo bank would provide a loan of up to 5.2 billion euros ($5.4 billion) – half the cash required for the deal. The bank had previously wavered on its involvement with Rosneft's privatization.

Intesa will seek to involve other banks in financing the deal. Each member of the proposed syndicate will take on part of the loan, an Intesa spokesperson told Reuters.

The developments bring a modicum of clarity to Rosneft’s otherwise opaque privatization deal.

After months of struggling to find a foreign investor for Rosneft, Russian President Vladimir Putin and CEO Igor Sechin announced in December that the Glencore-Qatar consortium would purchase the share packet. The unexpected deal reportedly came after talks with 30 different potential investors.

Putin termed the sale “the largest on the global energy market in 2016.”

Since then, however, many have cast doubt on the honesty of this “privatization.” In the deal’s wake, Glencore and Rosneft announced that the 19.5 percent share had been valued at 10.2 billion euros ($10.6 billion). The Glencore-Qatar consortium would pay 2.8 billion euros ($2.9 billion) and Intesa Sanpaolo and several unnamed Russian banks would provide a loan of 7.4 billion euros ($7.7 billion) — with Intesa providing more than 50 percent of the financing.

Shortly thereafter, however, Intesa seemed to reconsider its role in financing the sale due to EU sanctions against Rosneft.

At the time, several economic analysts interviewed by the Moscow Times said that the privatization scheme more resembled sophisticated accounting than true privatization. The real money, they suggested, was probably coming from Russian banks backed by the Russian Central Bank – with Glencore and the Qatari Fund serving as cover for the process.

The problem, analyst Boris Grozovsky said, was that the Russian banks had gone into debt to finance the deal, and were partially relying on money from Intesa to come through.

Those funds now appear to have arrived.

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Credit Suisse bullish on emerging markets in 2017 www.rt.com

Emerging markets are once again an attractive target for investors due to growing middle-class incomes, flexible Gross Domestic Product (GDP) growth prospects, as well as very young populations as a base for consumption, according to Credit Suisse.
“We particularly find emerging market debt in hard currency, but also in local currency, as an important part of investment strategy for next year,” said Credit Suisse's global head of investment strategy Nannette Hechler Fayd'herbe as quoted by CNBC.

According to the bank’s analysts, emerging markets have derived enough to become more resilient to international conditions, including political uncertainty tied to Brexit, a European banking crisis or Donald Trump's plans to shake up US trade policies.

“Emerging markets have a lower exposure to an export-driven growth model than is generally assumed. They have a better, balanced-type of growth model,” said Hechler Fayd'herbe.

She stressed that the vast majority of emerging market countries have only a third of their GDP dependent on international trade.

Broad emerging markets in Asia and Latin America are at an advantage due to a huge domestic consumer base, while China and India are rising at twice the pace of global growth.

According to Credit Suisse, the US dollar, euro, yen and the British pound despite post-Brexit losses are among the hard currencies due to their relative stability and acceptance for international financial transactions.

Indonesia is seen as one of the stronger-performing emerging markets with bid yield on the 10-year Indonesian government bond note is 8.07 percent versus a 2.43 percent bid yield on the US 10-year Treasury note.

Chinese markets began last year with a massive sell-off but later recovered up to a point after government reforms to stabilize the economy and open China's financial markets to global investors.

Chinese equities, as well as Hong Kong shares, will lead regional equities this year, due to positive valuations, recovery in earnings and buoyant liquidity are able to boost north-south inflows, according to Credit Suisse. Exporters are expected to gain from a gradual depreciation of the yuan, the bank added.

The only way to play in the oil trade will be to estimate energy-related currencies, such as the Norwegian krone and the Russian ruble. Russian currency is expected to fight against absolute dollar strength, said Heng Koon How, senior foreign exchange investment strategist at Credit Suisse.

The bank expects financial markets to remain challenging this year, with global GDP to grow to 3.4 percent from 3.1 percent in 2016.

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Brexit: banks consider whether to start moving business out of UK www.theguardian.com

Brexit could have an impact on the City in the coming months as banks decide whether to implement contingency plans to ensure they retain access to the remaining 27 EU member states by moving business out of the UK.

Theresa May, the prime minister, intends to trigger article 50 – the formal process of exiting the EU – in March and some senior officials in the financial district argue that the rest of Europe could lose out if operations are shifted out of London.

The local authority for the financial district, the City of London Corporation, has urged May to arrange transition arrangements “as soon as possible” to allay concerns of businesses which were delaying investment decisions.

PricewaterhouseCoopers (PwC), which is advising several financial services institutions, said announcements could start in late February, when banks publish their preliminary results.

“A number of big banks are finalising plans for announcements they will make [this] year,” he said.

In the run-up to the 23 June referendum, banks warned about the consequences of a vote to leave the EU. US bank JP Morgan said it could move 4,000 of its 19,000 UK workforce. Its main offices are Canary Wharf, Bournemouth and Glasgow. Britain’s biggest bank, HSBC, said it might need to shift about 1,000 staff to existing operations in Paris.

A report for the lobby group CityUK by PwC, calculated that there could be 100,000 fewer jobs by 2020.

Banks may not be able to delay moving of some of their operations to the remaining EU member states – even if the government were to announce a transition period beyond the two years after triggering article 50 – because of the time it takes to get authorisation from regulators and installing new management teams.

The director of policy and strategy at CityUK, said businesses did not want to move. “There’s a real stickiness. People are here for a reason. It’s a good place to do business,’ Gary Campkin said.

“The important thing is to make sure we focus on ensuring decisions aren’t made too early or too quickly and that’s why stability is crucial.”

The Corporation of London has published data showing that financial and professional services firms employ more than 2.2 million people across the UK, not just in the City.

Campkin said: “The important thing is there is clear recognition from the UK and the EU 27 that transition arrangements, bridging arrangements, or an interim period are an important part of the process”.

This involves two arrangements: the first when article 50 is triggered to the point when the UK leaves the EU; the second covers the period from exit to allow businesses time to adapt to the new arrangements.

“This is a negotiation. It’s not just about what the UK wants. The EU 27 needs to think really carefully what’s at stake for them too … That means, whether EU corporates know it directly or not, that they will be getting benefit from access to London,” he said. New York or Singapore could benefit, he added.

Bank of England officials have warned there could be an impact on the wider EU. Sir Jon Cunliffe, deputy governor, has said economies across the EU could lose out and that operations may move to New York, rather than another financial centre in Europe.

Sam Woods, another deputy governor at the Bank, has said the regulator is being kept informed of contingency arrangements being drawn up by City firms.

Anthony Browne, chief executive of the British Bankers’ Association, said all EU member states had a mutual interest in ensuring the period between concluding the UK’s exit from the trade bloc and any new relationship did not result in disruption to businesses and customers.

“Including transitional arrangements in the UK’s withdrawal agreement under article 50 would avoid a cliff-edge moment and ensure an orderly transition post-Brexit,” he said.

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Trump attacks General Motors over Mexico Chevy production www.bbc.com

The US president-elect, Donald Trump, has criticised General Motors for making cars built in Mexico available tax-free in the United States.
"General Motors is sending Mexican made model of Chevy Cruze to US car dealers-tax free across border. Make in U.S.A. or pay big border tax!" said the president-elect in a post on Twitter.
Mr Trump has criticised other US industry titans since his election win.
Shares in Lockheed Martin and Boeing fell after attacks from Mr Trump.
The US share markets will open at 14:30 GMT.

General Motors has moved production of its Chevy Cruze model to Mexico in the face of high demand.
Its Lordstown plant in Ohio cannot make enough vehicles, despite running three shifts each day.
Mr Trump has vowed to make good on campaign promises to bring jobs back to America by, as he puts it, levelling the playing field.

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MNT 20 billion was invested in mining industries in 2016 www.gogo.mn

More than 20 mining deposits were put into operation, 800 jobs were created and MNT 20 billion was invested in Mongolian mining sector in 2016, the Ministry of Mining and Heavy Industry reports. 
According to the state budget performance in 2016, 19 tons of gold, 33 million tons of coal, 7.5 million tons of iron ore, 1.1 million tons of oil and 200 thousand tons of fluorite are expected to be exported. 
The Ministry of Mining and Heavy Industry added that 1.4 million tons of copper concentrate, 4700 tons of molybdenum concentrate and 100 thousand tons of zinc concentrate will be produced and exported. 
Ultimately, mining sector accounts for 85 percent of Mongolian exports, 63 percent of industrial products, 18 percent of GDP and one-fourth of national revenue.

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State Commission launches inspection at new airport www.gogo.mn

Construction of The New Ulaanbaatar International Airport (NUBIA) is currently underway in Khushig Valley, Tuv Aimag, a location 52 km south of the capital city. Starting from the first working day of new year 2017, January 2, a 57-member State Commission launched its inspection at the airport to complete the Mongolian Government’s acceptance of the construction works.
On December 21-28, technical inspection of the project was conducted by a designated technical committee of 104 personnel. As a result of the technical inspection, some 23 objects and facilities constructed by Japanese side were handed over to the Mongolian side.

In correspondence to the completion of the technical inspection, the State Commission led by B.Tsogtgerel, Deputy Minister of Road and Transport Development thus begins their work. On January 2, the Commission held a meeting to introduce the outcome of the technical inspection, discuss the current progress of the project and seek solutions to existing problems and obstacles.
The State Commission is to function until January 11, finalize their concluding report and introduce it to the Cabinet. “When the Commission issues its concluding report, the Civil Aviation Authority of Mongolia will begin their flight tests and other tasks of the Operational Readiness and Airport Transfer process”, said Kimihiro Maeta, the Japanese Consultants Project Manager.
Started in June 2013, the nearly complete construction progress of Mongolia’s new international airport is expected to wrap up this month.

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Wall St stays bullish on Alibaba www.chinadaily.com

Wall Street remains bullish about China's internet giant Alibaba Group Holding Ltd amid a spate of stock selling by its principal stakeholders in the past six months.

Among the latest moves was the share sale plan adopted by Joe Tsai, which allows the firm's executive vice-chairman to sell up to 6.5 million shares of the company's stock through October.

The shares represent approximately 8 percent of Tsai's holdings, the company said in a filing to the United States Securities and Exchange Commission last month.

Tsai's affiliated entities, including the Joe and Clara Tsai Foundation, Parufam Ltd and MFG II Ltd, have adopted the prearranged sale plan in accordance with Rule 10b5-1 of the SEC Act of 1934, the statement said.

Based on Alibaba's annual report in March, Tsai holds a 3.2 percent stake in the company.

Alibaba Chairman Jack Ma unlocked 5 percent of shares under his beneficiary ownership through a similar plan in September, allowing for the sale of up to 9.9 million shares over a 12-month period commencing in September 2016.

These plans have been put in place to meet philanthropic commitments and for ordinary wealth planning purposes, the company told China Daily on Monday.

In 2014, the duo established a charitable trust that is designed to be funded by share options they own, representing around 2 percent of the shares in the company, Alibaba said.

"Rule 10b5-1 allows major holders to sell a predetermined number of shares at a predetermined time, as long as the sale isn't set to bring about major effects to the company. Many corporate executives use such plan to avoid accusations of insider trading," said Ling Xiao, partner of Hui Ye Law Firm specializing in overseas investment and financing.

The e-commerce giant's largest shareholder Softbank Group Corp said it would sell $7.9 billion of its shares in June, marking the first such sale since the Japanese company began investing in Alibaba in 2000. Its holding in Alibaba were reduced to around 28 percent, from 32.4 percent as of June 2016.

But a potential snowball effect shorting Alibaba is unlikely to occur. In November, rating agency Fitch Ratings Inc affirmed Alibaba at A+ with a stable outlook, and Morgan Stanley gave a "Buy" rating last month and a $130 price target, more than 40 percent up from its current price.

"We believe that Alibaba is in the early stages of unlocking the value from what we view as its most valuable asset-a rich database that continues to accumulate from its well-controlled and extensive closed-loop ecosystem, through advances in data technology," Morgan Stanley's Grace Chen and her team said in a report in December.

Selloffs don't necessarily reflect a shift in confidence among major investors, according to an analyst tracking Alibaba stocks at an investment bank who wished to remain anonymous. The institution also maintains a buy rating and had raised its target price to more than $130.

"In the case of Softbank Group Corp, the selloff is targeted at trimming debts and saving up to acquire the semiconductor and software design company ARM Holdings Plc," said the analyst.

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Investor optimism, global economic reality may clash in 2017 www.rt.com

The economic outlook for this year looks similar to 2016 - uneven and unspectacular, according to economists worldwide polled by Reuters in December. The result is despite investor optimism about a breakout for the world economy.

Many of the experts said the global trade slowdown, seen during the slight recovery from the financial crisis that started nearly a decade ago, could worsen.

Emerging economies are expected to remain vulnerable. Much of Asia will grow below potential, putting the latest global growth forecast for 2017 at 3.2 percent. The projection is less optimistic than for the previous year.

Economists called accelerating inflation and a soaring US dollar among the risks to the economic balance.

Dollar strength, weakening other currencies, will influence how emerging markets manage relatively higher inflation, as well as falling business confidence, they said.

As for the developed world, productivity gains have been lacking for a long time. Policymakers will continue uncovering the reasons and ways to remedy the problem.

Improving output per worker will be crucial for the prosperity of the US economy.

"Mr. Trump and his team have promised growth of 3.5 to 4 percent or more, which we see as 'magical thinking' unless accompanied by accelerated productivity growth," said Michael Carey, US economist at CA-CIB.

According to the poll, the recent acceleration in eurozone growth is a bright spot as the European Central Bank continues buying tens of billions of euro worth of bonds each month. That keeps the euro under pressure and makes exports relatively cheaper, experts said.

They, however, see the elections in Germany, France, and the Netherlands as a potential threat which could further challenge the EU’s status quo. That might add to the economic effects from the expected UK exit from the European Union.

The potency of global monetary policy is seen fading due to central banks’ tightening campaigns.

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Famed Swiss banking secrecy replaced by financial data exchange www.rt.com

Switzerland’s enviable reputation as a tax haven is becoming a thing of the past. The alpine nation has begun collecting data on Swiss bank accounts held by citizens of some 104 countries, and will begin sharing it with select countries from 2018.
The shift in policy comes after the ratification of the ‘Multilateral Convention on Mutual Administrative Assistance in Tax Matters,’ which came into force on January 1.

The Convention has been touted as “the most comprehensive multilateral instrument available for all forms of tax co-operation to tackle tax evasion and avoidance, a top priority for all countries.”

From now on, countries with which Switzerland has signed agreements no longer need to request information on their citizens’ Swiss bank accounts. Financial data will be handed over automatically once a year. The data is confidential and cannot be made public, according to swissinfo.ch.

Previously, Switzerland provided banking information only if it had been requested by a country with which Bern had signed a deal to prevent double taxation. Even then, cooperation was not 100 percent guaranteed, since the requesting country had to provide hard evidence that the suspected persons had evaded taxes, according to the Swiss news outlet.

European countries will be the first to benefit from the Convention.

Developing countries like India, Argentina, and South Africa will have to wait until 2018.

Poor countries will not be able to take part in the process simply because they lack the ability to collect and share information on the financial assets of Swiss citizens living in their countries and are unable to guarantee that the information provided by Switzerland will only be used for tax purposes and remain confidential, swissinfo.ch reports.

Switzerland ratified the Convention in September.

Angel Gurria, the secretary-general of the Organization for Economic Co-operation and Development (OECD), said that the ratification marked the latest milestone in Switzerland’s “significant efforts to implement the international standards on tax transparency” in recent years.

 
 
 
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