1 FOREIGN RELATIONS OF MONGOLIA’S ROAD TRANSPORT SECTOR BROADENING WWW.MONTSAME.MN PUBLISHED:2019/02/21      2 MONGOLIA EXPRESSES READINESS TO CONTRIBUTE TO STRENGTHENING ASIA-EUROPE COOPERATION WWW.MONTSAME.MN PUBLISHED:2019/02/21      3 OYU TOLGOI FUNDED 35.1 KM ROAD OPENS IN KHANBOGD WWW.GOGO.MN PUBLISHED:2019/02/21      4 POLYMER BITUMEN TO BE DOMESTICALLY PRODUCED WWW.MONTSAME.MN PUBLISHED:2019/02/21      5 KHURELBAATAR CHIMED: 319 ENTITIES DREW LOANS FROM TWO FUNDS WWW.ZGM.MN PUBLISHED:2019/02/21      6 CONSTRUCTION OF TAVANTOLGOI-GASHUUNSUKHAIT ROAD TO BE INTENSIFIED WWW.MONTSAME.MN PUBLISHED:2019/02/20      7 OVER 30 MEASURES PLANNED FOR REDUCTION OF ENVIRONMENTAL POLLUTION WWW.MONTSAME.MN PUBLISHED:2019/02/20      8 MONGOLIA SAYS IT EARNS OVER 169 MLN USD FROM COAL EXPORTS TO CHINA IN JAN WWW.HELLENICSHIPPINGNEWS.COM  PUBLISHED:2019/02/20      9 RUSSIA’S GAZPROM TO START CHINA GAS PIPELINE BY DECEMBER 1 WWW.RT.COM PUBLISHED:2019/02/20      10 MONGOLIA'S FOREIGN TRADE UP 41.6 PCT IN JAN. WWW.XINHUANET.COM PUBLISHED:2019/02/20      УГСАРМАЛ ОРОН СУУЦНЫ ДУЛААЛГАД ЗОРИУЛЖ 12.7 ТЭРБУМ ТӨГРӨГИЙГ УЛСЫН ТӨСВӨӨС ГАРГАХААР БОЛЖЭЭ WWW.IKON.MN НИЙТЭЛСЭН:2019/02/21     2018ОНД ЦАГААН БУДАА , ЭЛСЭН ЧИХЭР , ТАХИАНЫ МАХНЫ ИМПОРТ 24-32 ХУВИАР ӨСЖЭЭ WWW.BLOOMBERGTV.MN  НИЙТЭЛСЭН:2019/02/21     ДЦС IV: 2018 ОНД НИЙТ АШИГ 4.7 ДАХИН ӨСӨЖ , 4.48 ТЭРБУМ ТӨГРӨГ БОЛСОН WWW.BLOOMBERGTV.MN  НИЙТЭЛСЭН:2019/02/21     ТУСГАЙ САНГУУДААС ГАРГАСАН ЗЭЭЛИЙН 100 ОРЧИМ ТЭРБУМ ТӨГРӨГ ХУГАЦАА ХЭТЭРСЭН ӨР БОЛЖЭЭ WWW.BLOOMBERGTV.MN  НИЙТЭЛСЭН:2019/02/21     МОНГОЛ УЛСЫН БОРЛУУЛАЛТЫН МЕНЕЖЕРҮҮДИЙН ИНДЕКС СҮҮЛИЙН 12 САРД АНХ УДАА УНАЛТЫН БҮСЭД ШИЛЖИВ WWW.BLOOMBERGTV.MN НИЙТЭЛСЭН:2019/02/21     2018 ОНД ХАМГИЙН ЧИНЭЭЛЭГ БҮЛГИЙН ХЭРЭГЛЭЭ ЯДУУ БҮЛГИЙНХНЭЭС 5.1 ДАХИН ИХ БАЙВ WWW.BLOOMBERGTV.MN НИЙТЭЛСЭН:2019/02/21     ХОВД ГОЛД ОСОЛДСОН 6 НАСТАЙ ХҮҮХДИЙН ЭРЛИЙГ ЗОГСООЛОО WWW.MONTSAME.MN НИЙТЭЛСЭН:2019/02/21     ДБНХ-НООС П.ОРХОНЫ БАРИЛДАХ ЭРХИЙГ 4 ЖИЛЭЭР ХАСАВ WWW.MONTSAME.MN  НИЙТЭЛСЭН:2019/02/21     УУХҮЯ: II САРЫН БАЙДЛААР НИЙТ НУТАГ ДЭВСГЭРИЙН 5.6 ХУВЬД АШИГТ МАЛТМАЛЫН ЛИЦЕНЗ ОЛГОСОН WWW.BLOOMBERGTV.MN  НИЙТЭЛСЭН:2019/02/20     300 ОРТОЙ ТӨРӨХ ЭМНЭЛГИЙН БАРИЛГЫН АЖИЛ 80%-Д ХҮРЧ ГУРАВДУГААР САРЫН 1-НЭЭС ДУЛААНД ХОЛБОГДОХООР БОЛЖЭЭ WWW.IKON.MN НИЙТЭЛСЭН:2019/02/20    

Events

Name organizer Where
“Doing business with Mongolia”, “UK Investors show” бизнес хөтөлбөр March 27-April 02. 2019 ЛОНДОН ХОТ, ИХ БРИТАНИ Mongolian Business Database London UK
SYMPOSIUM ON GLOBAL MARKETS Nationalism and Protectionism: The United States in the International Arena June 17-18, 2019 The Center for American and International Law Plano, Texas, USA The Center for American and International Law (CAILAW) Plano Texas June 17-18 2019
"Open to Export" ICC WTO International business award ICC WTO London

NEWS

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Iron ore price drops to 1-month low, coking coal rebounds www.mining.com

The Northern China import price of 62% Fe content ore fell 2.8% on Monday, to a near-one-month low of $89.00 per dry metric tonne according to data supplied by The Steel Index.

After a 85% rise in 2016, the price of iron ore has improved by 12% so far this year and has more than doubled in value since hitting near-decade lows at the end of 2015.

The rise in the price of the steelmaking raw material has flummoxed market observers given supply growth expected in 2017, record-setting inventory levels at ports and an uncertain outlook for demand from China.

The bears received more ammunition over the weekend after inventories at major Chinese ports jumped to 130 million tonnes the highest since at least 2004 according to Steelhome data.

However, Reuters reports the bulk of inventories are low to medium-grade material and the availability of high-grade iron ore remains limited as "most Chinese mills are opting for higher grade iron ore to boost productivity in order to push out more steel as prices remain high."

The bulk of inventories are low to medium-grade material and the availability of high-grade iron ore remains limited
Iron ore prices should also be supported by news over the weekend that Chinese authorities will enforce crude steel production capacity cuts of 50 million tonnes. The announcement form part of Beijing's efforts to tackle chronic air pollution and restructure the steel industry which for decades have suffered from overcapacity, inefficiency and low-quality steel output.

The Chines push should favour high-grade ore from Australia, Brazil and other exporting nations over domestic production which is low grade and remains unprofitable even at today's iron ore price.

On Monday, the market for coking coal continued to rebound with the steelmaking raw material advancing to $163.10 after three weeks of unbroken gains. Met coal prices are being supported by the decision to further cut coal production in China with a goal of eliminating 150 million tonnes this year. While the cuts target coal used in power generation, steelmaking quality coal will also be impacted.

A reduction in allowable work days at the country's coal mines last year sparked a massive rally in coal prices, lifting met coal prices to multi-year high of $308.80 per tonne (Australia free-on-board premium hard coking coal tracked by the Steel Index) by November from $75 a tonne earlier in 2016. The price had fallen back to $150 a tonne three weeks ago.

Outlook murky
FocusEconomics in its February survey of analysts and institutions shows the price of iron ore averaging $56.70 a tonne during the final quarter of next year. For Q4 2018, analysts expect prices to moderate further to average $55.60 over the three month period.

None of the analysts foresee iron ore holding at today's prices – Dutch bank ABN Amro is the most optimistic calling for a $76 average towards the end of 2017 while London-based Investec sees an average of $71.50 over the cours of this year.

BMO Capital Markets see prices correcting sharply from today's levels to average $45 during the first quarter of 2018 while Oxford Economics expects iron ore to average $53 this year and below $50 in 2018. Iron ore averaged $56 last year, a slight improvement over 2015.

FocusEconomics study of coking coal price predictions do not point to further rallies, but prices should stabilize near current levels. The research firm's panelists expect prices to average $149 per tonne in Q4 2017. Prices are set to remain stable throughout 2018 and average $141 during the final quarter of next year. Coking coal averaged $121 last year and $90 the year before.

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Freight forwarding companies under examination www.montsame.mn

Ulaanbaatar /MONTSAME/ The ministry of Road and Transportation Development has started examination on all railway freight forwarding companies regarding their implementation of relevant laws, regulations, rules and meeting standards and requirements.

For this reason certificates of 82 freight forwarding companies are under suspension. The Ministry announced that the companies should apply for the examination within March 17.

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Chinese firms to continue M&A global expansion www.chinadaily.com

Chinese companies are expected to continue to expand their global reach across a broader mix of industries, said David Fleming, partner and M&A specialist at international law firm Baker McKenzie.

He said uncertainties are unlikely to affect Chinese corporate investments in the Asia-Pacific region-including ASEAN members-fueling growth in industries ranging from food and health to telecoms and tech.

"Deals won't stop," Fleming said.

The expected quickening of cross-border investments from China is also in line with China's Belt and Road Initiative, which promotes business ties with nations along the ancient Silk Road connecting China and Europe, Africa and the rest of Asia.

At the same time, Fleming did see the inevitability for Chinese companies to adopt a more sophisticated approach and be more careful in a number of operations in their overseas expansion.

"To make successful deals, they will have to adjust their action strategies, deal sizes and structures, exchange and cost management policies, and corresponding legal practices in pursuit of mergers and acquisitions," Fleming said.

Based on their previous experience in Europe and elsewhere, companies would have to take a longer-term view and perhaps employ a more selective M&A approach.

Second, they were advised to act early to involve specialist services in the legal and other professional fields in the deal process.

Third, they needed to be more careful and flexible in designing the deal structure in order to mitigate a single company's exposure to any potential risk.

Fleming also said that companies must engage with local regulatory authorities early on in the process.

He also said that companies needed to consider the role that the media could play in a deal.

Deals that are pending regulatory approval are often reported in the media. Companies should be more sensitive to local prevailing social conditions, he said.

At a time of rising populism, companies were advised to be more careful and involve local public relations expertise and the local media.

Overall, Fleming remained confident that Chinese companies would continue to go overseas to seek diversification. He added that 2017 would be a year of continuation.

The Baker McKenzie M&A specialist said Chinese companies were quick learners and would work very hard to pursue their goals.

Legal services in China, including Baker McKenzie's Chinese partners, were making progress to adapt to the needs of their clients, "in order to be where deals are", Fleming said.

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Tibet to open world's highest super-long tunnel www.chinadaily.com

The Mila Mount Tunnel on the Lhasa-Nyingchi Highway is expected to be opened in September, when it will become the world's highest super-long tunnel.

The tunnel is located at the junction of Lhasa and Nyingchi in the Tibet autonomous region at an average altitude of 4,740 meters above sea level, according to the Mila Mount Tunnel Project Headquarters.

As a key section of the Lhasa-Nyingchi Highway on the National Highway 318, the two lanes of the tunnel are 5,727 meters and 5,720 meters long respectively, according to the project headquarters.

Construction of the tunnel started in April 2015, and the project is about 70 percent complete to date, it said, adding that, hampered by the natural environment at high attitude, the construction process has encountered many obstacles.

"With a lack of oxygen and temperature lows of - 30 Celsius in winter, we require highly skilled workers," said Wang Liang, chief engineer of the project headquarters.

Wang said many workers suffered from attitude sickness during the tunnel's construction, and that much time and effort has been spent on recruiting qualified workers.

In order to overcome such difficulties, there are 15 oxygenators, an oxygen tank and five boilers on the project site, he added.

After it opens, traveling time between the cities of Lhasa and Nyingchi will be halved, Wang said.

"Driving from Lhasa to Nyingchi will take just three to four hours instead of about eight, and it will be much safer," Wang said.

"It will also have a positive impact on the social and economic development of these places, and it will make life much more convenient for local ethnic groups."

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Snap slides as Wall Street ends lower www.bbc.com

Shares in Snap, the owner of Snapchat, slid 12% on Monday to close below the price at which they started trading just last week in New York.

The stock soared on Thursday after making its Wall Street debut.
Snap closed 44% higher at $24.48, valuing the company at $28bn, after it raised $3.4bn in the richest US technology company listing since Facebook in 2012
Shares in Shap went even higher on Friday.
However, analysts have given mixed views on the future of Snap, debating whether it can emulate the success of Facebook, sending shares down $3.32 to close at $23.77.
It remains unclear whether Snap can expand beyond its core base of young users, or how it will fare in many international markets in a competitive social media environment.
Five of seven financial analysts covering Snap advised investors to "sell" the stock, with none advising them to buy, according to data compiled by Bloomberg.
Needham analyst Laura Martin rated Snap as "underperform" and compared the shares to buying a lottery ticket.
History suggests investors shut out of IPOs are better off waiting instead of rushing to buy them immediately after their debuts.
Globally, shares of most of the 25 largest technology IPOs have languished in their first 12 months after listing, with 16 posting significant falls from their debut day closing price, according to Reuters analysis.
There was more bad news for Snap on Monday after a group representing big US institutional investors asked index providers S&P Dow Jones Indices and MSCI to bar the company - and others that sell investors non-voting shares - from their stock benchmarks.
Both index providers have said they are reviewing Snap's inclusion.
Wall Street falls
If it was added to indexes such as the S&P 500, managers of stock index portfolios would have to buy Snap shares, and other investors whose performance is tracked against such indexes would likely follow suit.
Wall Street closed lower - the second time in the past three trading days it has done so. Banks gave back some of their recent gains, while mining and chemical companies declined after China cut its economic growth forecast.
The Dow Jones fell 0.2% at 20,954 points. The S&P 500 lost 0.3% to 2,375 points, while the Nasdaq Composite lost 0.4% to 5,849 points.
"We think there's a reasonable chance at the end of the year we'll be a little bit lower than we are right now," said Scott Wren, equity strategist at Wells Fargo Investment Institute.
General Motors lost 0.8% after revealing it will take a charge of $4.5bn, mainly pension expenses, on the sale of Opel and Vauxhall to Peugeot.
Delta Air Lines fell 2.6% after it said profits would be at the low end of hopes.

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Tokyo Games expected to bring in $280 bil. www.nhk.or.jp

The Tokyo Metropolitan Government estimates the 2020 Olympics and Paralympics will bring Japan economic benefits totaling more than 32 trillion yen, or about 280 billion dollars.

Tokyo officials say the estimate covers a 17-year period from 2013, when Tokyo won the hosting rights, to 2030, 10 years after the Games.

The estimated figures show that direct investments and visitor spending in the Games will generate about 30 billion dollars in economic benefits for Tokyo, and 16 billion dollars for the rest of the country.

Benefits from indirect investments and expenditures are estimated at nearly 150 billion dollars for Tokyo, and about 88 billion dollars for the rest of the nation.

Tokyo officials say they want to cooperate closely with other municipalities to ensure that the benefits will be felt across the country.

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Alibaba, SAIF Partners pump $200m into India's Paytm E-Commerce www.asia.nikkei.com

MUMBAI -- Chinese e-commerce powerhouse Alibaba Group Holding and venture fund SAIF Partners are investing a total of about $200 million to help India's Paytm E-Commerce boost its domestic presence against such majors as Amazon of the U.S. and Flipkart of India, according to sources.

The fresh round of funding from Alibaba's Singapore arm for Paytm's e-commerce venture will not only help Alibaba better take on global giant Amazon in India, it may also create opportunities for other players to raise money, experts say.

Paytm has yet to comment on the investment.

Paytm E-Commerce, which recently launched Paytm Mall -- similar to Alibaba's Tmall online marketplace -- has been spun off from parent One97 Communications. One97 Communications runs mobile wallet operations under the Paytm brand.

Paytm Mall claims to offer customers a choice of 68 million products from some 140,000 sellers. It has partnered with various third-party warehouse providers and makes deliveries via 17 logistics centers and 40 courier companies.

According to various media reports, the combined stakes of Alibaba and affiliate Ant Financial in Paytm E-Commerce will now increase to 62% from 40%. The Economic Times reported that One97 Communications was valued at $4.8 billion in 2016, when it raised $60 million from Taiwanese chip designer Mediatek. Ant Financial owns a 32% stake in One97 Communications, while Alibaba holds around 8%.

Other investors in One97 Communications include U.S. venture capital company Sapphire Ventures and Silicon Valley Bank.

This is another big boost for One97 Communications, whose mobile wallet business surged after India's demonetization move took high-denomination currency notes out of circulation. Some experts say Alibaba's latest investment could help Paytm expand its e-commerce business beyond India.

Paytm is still small compared with Amazon and Flipkart, which together control 80% of India's e-commerce market. Amazon India has deep pockets thanks to its parent company, and Flipkart is reportedly looking to take in a billion dollars in fresh funding.

Snapdeal, another big Indian e-commerce player, recently had to lay off employees to remain profitable. Alibaba holds a roughly 5% stake in the company.

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Snap slides as Wall Street ends lower www.bbc.com

 
Shares in Snap, the owner of Snapchat, slid 12% on Monday to close below the price at which they started trading just last week in New York.
The stock soared on Thursday after making its Wall Street debut.
Snap closed 44% higher at $24.48, valuing the company at $28bn, after it raised $3.4bn in the richest US technology company listing since Facebook in 2012
Shares in Shap went even higher on Friday.
However, analysts have given mixed views on the future of Snap, debating whether it can emulate the success of Facebook, sending shares down $3.32 to close at $23.77.
It remains unclear whether Snap can expand beyond its core base of young users, or how it will fare in many international markets in a competitive social media environment.
Five of seven financial analysts covering Snap advised investors to "sell" the stock, with none advising them to buy, according to data compiled by Bloomberg.
Needham analyst Laura Martin rated Snap as "underperform" and compared the shares to buying a lottery ticket.
History suggests investors shut out of IPOs are better off waiting instead of rushing to buy them immediately after their debuts.
Globally, shares of most of the 25 largest technology IPOs have languished in their first 12 months after listing, with 16 posting significant falls from their debut day closing price, according to Reuters analysis.
There was more bad news for Snap on Monday after a group representing big US institutional investors asked index providers S&P Dow Jones Indices and MSCI to bar the company - and others that sell investors non-voting shares - from their stock benchmarks.
Both index providers have said they are reviewing Snap's inclusion.
Wall Street falls
If it was added to indexes such as the S&P 500, managers of stock index portfolios would have to buy Snap shares, and other investors whose performance is tracked against such indexes would likely follow suit.
Wall Street closed lower - the second time in the past three trading days it has done so. Banks gave back some of their recent gains, while mining and chemical companies declined after China cut its economic growth forecast.
The Dow Jones fell 0.2% at 20,954 points. The S&P 500 lost 0.3% to 2,375 points, while the Nasdaq Composite lost 0.4% to 5,849 points.
"We think there's a reasonable chance at the end of the year we'll be a little bit lower than we are right now," said Scott Wren, equity strategist at Wells Fargo Investment Institute.
General Motors lost 0.8% after revealing it will take a charge of $4.5bn, mainly pension expenses, on the sale of Opel and Vauxhall to Peugeot.
Delta Air Lines fell 2.6% after it said profits would be at the low end of hopes.
...


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Law on Movable Property Pledge enters into effect www.montsame.mn

Ulaanbaatar /MONTSAME/ Law on Pledge of Tangible and Intangible Movable Property has entered into effect starting March 01, 2017. The purpose of the law is to regulate the rights and legal interests of the parties to transaction involving the pledge of movable and intangible properties.

In addition, the law aims to increase economic efficiency and to ease access to new financial resources. Prior to the enactment of this Movables Pledge Law, the Mongolian Civil Code was the main reference point and a principal governing law for transactions involving the pledge of movable and intangible property.

Due to the lack of detailed guidance and regulation regarding the pledging of movable and tangible properties, the most common pledge security became immovable property; thus, shutting out a vast whole array of properties from the economy.

Now, under the Movables Pledge Law any movable and intangible property can be pledged as long as the property can be validly used in civil transactions, is physically present or is not yet readily available; such properties include all types of shares and securities, receivables, intellectual property rights, and other intangible properties.

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China unseats eurozone as world’s largest banking system www.rt.com

New analysis by the Financial Times shows China's banking system has overtaken the eurozone to become the world’s biggest by assets. The status reflects the country’s increasing global influence and its reliance on growth driven by debt.

According to FT, China’s GDP surpassed the EU’s in 2011 at market exchange rates, but its banking system did not take over the top spot until the end of last year.

That lag was fuelled by an extraordinary increase in bank lending since 2008 when the Chinese government unleashed aggressive monetary and fiscal stimulus to soften the impact of the global crisis.

“The massive size of China’s banking system is less a cause for celebration than a sign of an economy overly dependent on bank-financed investment, beset by inefficient resource allocation, and subject to enormous credit risks,” said Eswar Prasad, an economist at Cornell University and former head of the China division at the IMF.

Statistics show Chinese bank assets hit $33 trillion at the end of 2016, versus $31 trillion for the eurozone. US assets stood at $16 trillion and the Japanese at $7 trillion.

The value of China’s banking system is more than 3.1 times the size of the country’s annual economic output, compared with 2.8 times for the eurozone and its banks, the FT analyzed.

Economists say Beijing’s increased stimulus has led to significant wasteful investment, industrial overcapacity, and dangerous debt levels. Unlike in developed markets, Chinese local government has relied heavily on bank loans to finance infrastructure.

“There’s a lot of hidden sovereign credit within the corporate loans on bank balance sheets, which can distort the picture when you do a cross-country comparison,” said Hou Wei, China banks analyst at Sanford C Bernstein in Hong Kong. “In most other markets, governments just borrow directly from capital markets. In China, it’s a unique situation,” he added.

While the world’s three largest banks are Chinese, experts say the true scale of Chinese banks is understated. Shadow banking has exploded in the country over the past seven years.

The authorities have announced a crackdown on underground banking, boosting efforts to curb capital outflow and fight corruption. Recently they signaled an intention to shift policy focus away from stimulus towards risk control.

Economists say more developed capital markets could help diversify China’s financial system away from banks but a more diversified financial system will reduce Beijing’s ability to manage money flows.

“The Chinese government’s ambivalent approach to financial markets — seeing them as a useful resource allocation mechanism but unwilling to let them operate freely, with the ostensible aim of maintaining stability and control — has often added to market volatility and made them less efficient,” said Prasad.

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