1 US-MONGOLIA 'THIRD NEIGHBOR TRADE ACT' ON THE WAY WWW.THEDIPLOMAT.COM PUBLISHED:2018/11/17      2 CHINA'S FIGHT AGAINST SMOG MAKES PALLADIUM 2018'S BEST METAL WWW.MINING.COM PUBLISHED:2018/11/17      3 MILLENNIUM CHALLENGE CORPORATION PRESENTS GMS LICENSES WWW.MONTSAME.MN PUBLISHED:2018/11/17      4 MONGOLIA CALLS FOR GLOBAL ATTENTION ON CLIMATE CHANGE WWW.NEWS.MN PUBLISHED:2018/11/17      5 ADB OPENS A NEW WASTEWATER TREATMENT PLANT IN ARVAIKHEER, MONGOLIA WWW.AGENPARL.EU PUBLISHED:2018/11/17      6 CHINA TO BOOST COOPERATION WITH INDIA, MONGOLIA: DEFENSE MINISTER WWW.GLOBALTIMES.CN PUBLISHED:2018/11/17      7 DEATH ON MONGOLIA’S ‘COAL ROAD’ WWW.NEWS.MN PUBLISHED:2018/11/17      8 MONGOLIA SHAKEN BY WIDENING LOAN SCANDAL WWW.ASIA.NIKKEI.COM PUBLISHED:2018/11/17      9 MONGOLIA’S UNEMPLOYMENT FALLS BY 2.2 PERCENT WWW.NEWS.MN PUBLISHED:2018/11/16      10 MEETING MEAT DEMAND: MONGOLIA TO TRADE 17.9 PERCENT OF LIVESTOCK WWW.NEWS.MN PUBLISHED:2018/11/16      БНСУ-ЫН АЖ АХУЙН НЭГЖҮҮДИЙН АУТСОРСИНГ ЗАХИАЛГЫГ ГҮЙЦЭТГЭХ ЗАЛУУЧУУДЫГ СОНГОН, ШАЛГАРУУЛНА WWW.UNUUDUR.MN НИЙТЭЛСЭН:2018/11/17     НҮҮРСНИЙ ЭКСПОРТ 10 ХУВИАР ӨСӨЖ, 31.3 САЯ ТОНН БОЛОВ WWW.GOGO.MN НИЙТЭЛСЭН:2018/11/17     СУДАЛГААГААР ЖДҮ ЭРХЛЭГЧИД ЗЭЭЛИЙН ХҮҮНИЙ ЗАРДАЛ ХАМГИЙН ИХ ХҮНДРЭЛ УЧРУУЛДАГ ГЭЖ ХАРИУЛЖЭЭ WWW.BLOOMBERGTV.MN НИЙТЭЛСЭН:2018/11/17     ERDENE RESOURCE DEVELOPMENT: ХАЙГУУЛЫН ЗАРДАЛ III УЛИРАЛД 42 ХУВИАР БУУРСАН WWW.BLOOMBERGTV.MN НИЙТЭЛСЭН:2018/11/17     ГОРХИ, ТЭРЭЛЖИЙН БАЙГАЛИЙН БОХИРДОЛД АНХААРАЛ ХАНДУУЛЖ ЭХЛЭВ WWW.MONTSAME.MN НИЙТЭЛСЭН:2018/11/17     ИРЭХ БААСАН ГАРАГТ ХОТЫН ДАРГЫГ ОГЦРУУЛАХ ЭСЭХИЙГ ХЭЛЭЛЦЭНЭ WWW.MONTSAME.MN НИЙТЭЛСЭН:2018/11/17     “АМГАЛАН” ХОТХОНД БАЙРЛАХ ГЭРТЭЭ КАННАБИС ТАРЬЖ, УРГУУЛЖ БАЙСАН ТУРК ИРГЭНИЙГ БАРИВЧИЛЖЭЭ WWW.MEDEE.MN НИЙТЭЛСЭН:2018/11/17     ӨНӨӨДӨР АВТОМАШИНЫ ДУГААРЫН ХЯЗГААРЛАЛТ ҮЙЛЧЛЭХГҮЙ WWW.EAGLE.MN НИЙТЭЛСЭН:2018/11/17     ГАШУУНСУХАЙТЫН НҮҮРСТЭЙ МАШИНЫ ЦУВАА 120 КМ БОЛЖЭЭ WWW.EAGLE.MN НИЙТЭЛСЭН:2018/11/16     ТАТВАРЫН ОРЛОГО 32.2 ХУВИАР ӨСӨЖ, ТӨСВИЙН ТЭНЦЭЛ 341.9 ТЭРБУМ ТӨГРӨГИЙН АШИГТАЙ ГАРЛАА WWW.BLOOMBERGTV.MN НИЙТЭЛСЭН:2018/11/16    

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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Russia, China agree to jointly develop Far East www3.nhk.or.jp

Russia and China have agreed on a range of economic cooperation, including the development of Russia's Far East.

Russian Prime Minister Dmitry Medvedev welcomed Chinese Premier Li Keqiang to St. Petersburg on Monday for a conference on trade and investment.

Business leaders from both countries also attended the conference.

During the meeting, Russia's major oil company Rosneft agreed to sell a 20 percent stake in its subsidiary to a Chinese company for 1.1 billion dollars.

The subsidiary has been developing the Verkhnechonsk oil field in East Siberia.

The oil field has an estimated reserve of 1.2 billion barrels and is expected to be a key source of Russia's oil exports to the Asia-Pacific region.

The deal was signed by executives from both companies in the presence of the two prime ministers.

At a news conference, Medvedev said that Russia and China reaffirmed their commitment to jointly developing Russia's Far East region.

Russia is also seeking cooperation from Japan in the energy sector and in the development of its Far East.

Analysts say Russia aims to obtain as much economic cooperation as possible from the 2 countries while its economy is in a dire situation due to sanctions by Western nations over Ukrainian issues.

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Prime Minister urges mining companies to agree on coal price www.montsame.mn

Ulaanbaatar /MONTSAME/ Prime Minister J.Erdenebat gave a concrete task for a certain period of time to the companies, operating Tavantolgoi mine, reports the Premier’s spokesperson G.Otgonbayar. The head of government insisted the companies to reach an agreement for the common goal of protecting the “Mongolian Coal” brand name, otherwise the Government will intervene.

The Erdenes Tavantolgoi, the Energy Resource and the Tavantolgoi are operating coal mines. The PM noted, regardless who is operating the mine, the Tavantolgoi coal is a property of the Mongolian people. However, the coal industry has been going unprofitable over the past several years due to the series of attempts by the three companies to drag each other’s prices down, he said.

He gave a serious warning to the companies that the Government might consider a price arrangement on the stable commercialization of the Tavantolgoi coal.

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Underground mine to double OT’s annual copper concentrate production www.montsame.mn

 

Ulaanbaatar /MONTSAME/ Prime Minister J.Erdenebat was on a working tour at Oyu Tolgoi mine last weekend. He urged the leaders of the company to hire more Mongolians, and focus on improving their professional skills.

The role of the Oyu Tolgoi project in Mongolia’s growth will not be measured solely by the tax contribution, he noted. The project should result in intensified economic growth and broadened business opportunities through providing jobs for Mongolians and the national contractors. Thus, the project is expected to triple in efficiency and to benefit the GDP growth, foreign exchange reserve and macroeconomic growth. OT employs some 1,600 Mongolians.

Executive Director of Oyu Tolgoi LLC B.Munkhbaatar said: “More than 90 percent of the employees of the underground mine development project are Mongolians. As of the third quarter of 2016, the project is working with 852 contractors and suppliers, 60 percent of whom are national companies. The exploitation of the underground mine will begin in 2020. It will add another hundred tons of copper in concentrate to the original annual capacity of 100 tons from the open pit mine”.

The Prime Minister once again reminded that any decisions and actions regarding the project should be reported transparently, with accent on the assets it is creating in the Mongolian territory.

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RBS to set up compensation fund for small businesses www.theguardian.com

Royal Bank of Scotland is to set up a compensation fund for small business customers who claim they were badly treated by the bailed-out bank, in an attempt to draw a line under the long-running scandal.
 
The bank, 73% owned by the taxpayer, has repeatedly defended itself against persistent claims from small businesses that they were deliberately pushed to the brink of collapse to enable it to make a profit.
 
Its chief executive Ross McEwan, who has previously admitted that RBS let some small businesses down, is now preparing to announce a scheme to pay redress to customers in its global restructuring group – known as GRG and since disbanded.
 
The bank would not comment on Monday amid expectations that announcement would be made before the stock market opened on Tuesday. There were reports that the sum being offered in compensation would amount to around £300m.
 
McEwan, a New Zealander who has been running RBS for three years, is again expected to insist the bank has not seen evidence to support claims that it forced viable business to fail. The bank has in the past said: “In the aftermath of the financial crisis we did not always meet our own high standards and we let some of our SME customers down.”
 
But the creation of a scheme to compensate some customers is likely to be seized upon by small business customers as an admission it made some mistakes – although RGL Management, formed to gather claims against the bank, has been saying since April it intends to lodge legal claims worth more than £1bn against the bailed-out bank on behalf of small business customers.
 
As recently as last month, when RBS reported its results for the first nine months of the year, campaign groups set up by small businesses were angered at its refusal to set aside any money to pay compensation for them.
 
The announcement coincides with an appearance by Andrew Bailey, the new chief executive of the Financial Conduct Authority, at the Treasury select committee of MPs which has taken evidence from current and former RBS executives about the allegations.
 
A report commissioned by the FCA into the conduct of the GRG division has been much delayed, and is now expected to be published by the end of the year. Bailey is likely to face questions about this during Tuesday’s hearing, which will be chaired by Conservative MP Andrew Tyrie.
 
The allegations surfaced in 2013 when Lawrence Tomlinson, a businessman who was an advisor to the then business secretary Sir Vince Cable, compiled a dossier of allegations that RBS was deliberately wrecking small businesses to make profits for the bailed-out bank. At the time Tomlinson said he been approached by businesses which had ended up in GRG and had their properties sold to the bank’s specialist property arm, West Register.
 
It prompted RBS to commission a report from law firm Clifford Chance which “found no evidence that the bank ‘low-balled’ bids to customers in the hope or expectation of acquiring properties at a low price”.
 
But the law firm did say that “both in relation to the handover process and the restructuring process more generally, some [RBS] customers complained that they experienced insensitive, rude or aggressive behaviour.”
 
Clifford Chance explicitly criticised the bank for a lack of transparency on fees.
 
But the claims of mistreatment by small businesses have refused to die down and delays to the official FCA report have fuelled anger from business people who claim they have lost their livelihoods.
 
The report was first expected in December 2015, delayed to April 2016 and then in October the FCA said it had received the final report from the so-called skilled person, the firms Promontory Financial Group and Mazars.
 
“There are a number of steps for the FCA to complete before we are in a position to share our final findings, which will include an assessment of all relevant material, of which the skilled person’s report is one. This has been a complex and lengthy review – it is therefore important that we do not rush the final stages of this process,” the FCA said in October.
 
RBS is battling to put a long list of so-called conduct issues behind it. It also faces a bill from the Department of Justice in the US for the way it sold mortgage bonds a decade ago. Some analysts reckon this could amount to £9bn.
 
Chancellor Philip Hammond has also abandoned any attempts, for now, to sell off any more of taxpayers’ remaining 73% stake in the bank after an initial 5% shareholding was sold in August 2015.
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Chinese coking coal futures hit the roof www.mining.com

Coking coal prices climbed Monday 10%, the maximum daily amount allowed based on market rules, just when some analysts were predicting the end of the rally.

The fresh gains came amid tight supply and renewed appetite for risky assets, leading a broad rally in Chinese commodities.

The most-traded coking coal for January delivery on the Dalian Commodity Exchange soared 10%, the maximum daily amount allowed based on market rules.
Metallurgical coal prices were also boosted by news in the Western world, particularly the fact that the FBI cleared Hillary Clinton for using a private email server, giving her a last-minute boost ahead of the Nov. 8 election.

Coke, made from coking coal and used to make steel, also rose by its 7% limit to 2,001.50 yuan per tonne, its highest price since March 2013, data from The Metal Bulletin shows (subs. required).

The unexpected, yet welcome price rally has pushed miners to reopen mines and revive projects that were placed in the backburner in the past two years. In Australia alone, there are at least seven mines slated to resume operations before 2016 ends — four in Queensland and three in New South Wales.

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China-Russia trade to grow to $200bn – PM Medvedev www.rt.com

Economic cooperation between Russia and China is meeting expectations with more than $40 billion in trade this year, said Russian Prime Minister Dmitry Medvedev during a meeting with Chinese Premier Li Keqiang in St. Petersburg.
 
Moscow and Beijing will make additional efforts to increase trade to $200 billion in next 3-7 years, according to the Russian PM.
 
Medvedev says a preferential trade regime between the countries is being considered, which would increase the use of national currencies in settlements.
 
Li Keqiang is paying an official visit to Russia to discuss trade and investment ties, as well as cooperation in oil, gas and nuclear power.
 
Russia and China signed cooperation agreements in several areas such as economy and investments as well as cooperation in the nuclear industry.
 
A joint Russia-China Venture Fund will be established to develop trade, economic investment and scientific cooperation between the countries. The enterprise will reportedly sign the first project agreements as early as next year.
 
There will also be an intergovernmental commission on cooperation between Russia's Far East and China's North East, according to Medvedev.
 
“It was decided to set up a fifth intergovernmental commission, which will deal with the cooperation on the Far East of our country and in the north east of China, which shows the real scope of interaction,” the Russian PM said.
 
At the meeting Russia's gas major Gazprom and the China Development Bank (CDB) signed an agreement on possible financing.
 
Vnesheconombank (VEB) signed an agreement with China’s Development Bank to borrow nearly a billion dollars (six billion yuan) for 15 years. Russian state-run bank VTB also sealed several deals with the Chinese lender on trade financing in yuans for three and five years.
 
Russia’s oil giant Rosneft and China's Beijing Gas Group signed a cooperation agreement to sell a 20 percent stake in Verkhnechonskneftegaz, which is exploring a large oil and gas field in Eastern Siberia. Rosneft controls 99.94 percent of the company.
 
A framework agreement was reached between Russian petrochemical leader Sibur, China’s Silk Road Fund and China Development Bank. The deal includes the sale of share in the Russian company.
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An Asian investor's haven for U.S. elections: yen and a basket of arms www.reuters.com

No matter who wins the race for the White House, markets are betting on one truly safe investment, and that is the currency of a country with bleak economic prospects - Japan.

Markets had long been pricing in a victory for Democrat Hillary Clinton, but opinion polls over the past week have shown the race narrowing with the outcome now hinging on several battleground states in the Nov. 8 election.

That has meant investors have had to do some repositioning lately, betting or hedging on one of the candidates or just piling into traditional safe havens such as gold and U.S. Treasuries.

On Monday, however, stocks rose and the dollar rallied after the FBI said it stood by its earlier recommendation that no criminal charges were warranted against Clinton.

At least for the short term, it is ironically the Japanese yen -- the currency of an economy mired in deflation, slow growth, deeply negative interest rates and a falling stock market -- that fund managers think is the safest bet in Asia.

"If Trump wins, you'll get risk-off sentiment and you'll see the dollar losing against the Swiss franc, yen and euro," said Mary Nicola, investment strategist at Aviva Investors Asia. They have $448 million of assets in the region.

"If you get a Clinton win, you will get a relief rally in markets so you could potentially see dollar weakness."

But the run-up to the election has seen a flight to safety.

The price of gold is up 3 percent in a month, while shares of gold mining firms have risen. Shares in Australia's Newcrest Mining have risen 13 percent in a month, with fund managers betting on a further rise should Trump win or if neither candidate emerges a clear winner.

A Clinton victory represents continuity in foreign and trade policies. It also implies greater regulation for the financial and pharmaceutical sectors in line with commitments from the Democratic Party platform.

Should Clinton win, emerging market assets should rally, cheering an end to a long spell of uncertainty and the unwinding of trades betting on a Trump presidency, market analysts say.

"If Clinton wins, emerging markets will see a lot more of a green light for capital flows at least for a short period of time," said Jeremy Lawson, chief economist for Standard Life Investments. "Thereafter, it depends on what the actual policies are."

CURRENCY MANIPULATOR

But with the odds rising last week of Trump winning the presidency, a lot more market preparations lately have been around the risks that he wins.

Some investors have held short positions in South Korea's won, China's yuan and the Malaysian ringgit -- currencies vulnerable to shifts in risk appetite or potentially global trade frictions if Trump wins.

"Our global base case for a Trump presidency would, therefore, be a stronger U.S. dollar, weaker equities, weaker commodities, and an unclear direction of U.S. Treasuries," Citi analysts said in a note last week, adding that would invariably weaken emerging market currencies.

Trump has vowed to impose tariffs of up to 45 percent on Chinese imports and label China, the biggest foreign holder of U.S. Treasuries, a currency manipulator on his first day in office.

"The concern is that the U.S. does something that harms trade with China, and the Chinese will retaliate and it becomes a trade war," said Daniel Morris, senior investment strategist at BNP Paribas Investment Partners, based in London. That could spur sell-offs in smaller trading economies such as Singapore and Taiwan, he said.

"Regardless of who wins, we're not expecting any new trade agreements. In the worst-case scenario, we lose some. That’s generally bad for Asia," Morris said.

Exports make up a quarter of Asia's GDP and a fifth of it goes to the United States.

"Any currencies that are highly linked into the trade cycle will probably react badly in a Trump victory," said Mark Wills, managing director and head of investment solutions group, State Street Global Advisors, in Sydney. "The Australian dollar, for example, and the renminbi."

Citi analysts recommend buying the yen but shorting the Korean won as a hedge against a Trump victory. Viraj Patel, currency strategist at ING in London, expects the won will head to 1220 per dollar, a 6.5 percent decline from current levels, should Trump emerge victorious.

One 'Clinton' trade of late has been to buy north Asian renewable energy stocks, such as Taiwan's biggest solar cell maker Motech Industries.

"A Hillary win means Obama's renewable energy policy will likely be extended," said Susan Chu, a spokeswoman for Motech. "That would be a big plus for our industry, especially if Hillary should sweep the houses (Congress)." Motech gets 30 percent of its revenues indirectly from the United States.

Car exporters in Mexico, on the other hand, could be hit by a Trump win, said Hisashi Iwama, fund manager at Asset Management One in Tokyo. Japanese firms with production facilities in Mexico include Mazda Motor, Nissan Motor and Calsonic Kansei.

However, a Trump presidency could be good news for defence companies in Asia, given his desire to reposition America's military alliances, according to Nomura analysts.

"Rising risks of confrontation in the region reinforce our view that regional military tensions and defence budgets will keep rising," Nomura said in a research note. Their picks include Australian firm Austal, China Shipbuilding, AVIC Aircraft, AviChina, Bharat Electronics and Mitsubishi Heavy Industries.

Asia's corporates have the least amount of dollar-denominated debt among the three emerging market regions, rendering them less vulnerable to a rising dollar.

Still, analysts at Societe Generale reckon MSCI Asia's outperformance this year -- up 22 percent since January versus 12 percent for global equities MIWD00000PUS> -- should end.

While a Clinton win would broadly lift all Asian equity markets, Societe Generale recommends buying stocks in China and Southeast Asia initially if Trump wins, since these markets are less correlated to global market sentiment. It would sell companies exporting to the United States, particularly those in Taiwan and South Korea because of their additional links to the global smartphone supply chain.

Societe Generale's list of stocks to sell if Trump wins includes technology firms TSMC Technology, Advanced Semiconductor, Infosys, Tata Consultancy Services, Hong Kong's Li & Fung and Japan's Fuji Heavy Industries, all of which have upwards of 60 percent of their sales going to the United States.

(Additional reporting by Faith Hung in TAIPEI, Christine Kim in SEOUL, Hideyuki Sano in TOKYO.; Editing by Bill Tarrant.)

 
 
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Chinese steel firm plans to expand investment in Sierra Leone www.chinadaily.com.cn

FREETOWN - The Shandong Iron and Steel Group plans to expand its investment in Sierra Leone with $700 million for the construction of processing plants.
 
Hou Jun, chairman of the Chinese steel firm, made the announcement during a courtesy call on Sierra Leone President Ernest Bai Koroma on Friday.
 
Hou assured the president that the company's goal in Sierra Leone is to work "closely with the government to scale up China-Sierra Leone economic cooperation."
 
The company has committed $700 million for the construction of processing plants so as to further expand its business in Sierra Leone, said Hou.
 
President Koroma encouraged the Shandong Iron and Steel Group to scale up its activities through the injection of investment into its operations and promised continuous support from his government.
 
"We will continue to support the project because we believe it's a win-win situation for both the company and Sierra Leone," the president told Hou.
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Baidu bets it's got upper hand in self-driving race www.chinadaily.com.cn

Baidu Inc expects to have the edge in autonomous driving after years of running China's biggest search engine, arming it with expertise in machine learning and mapping.
 
The internet giant is sticking to a plan to have self-driving cars ply China's roads by 2018, then mass production by 2020. The company will focus on its home market despite road conditions there being much more complex than in developed countries, Chief Financial Officer Jennifer Li told the Bloomberg Markets Most Influential Summit in Hong Kong.
 
Baidu is banking on artificial intelligence and automobiles to provide much-needed engines for growth as its search business decelerates. This year, it's expected to post its slowest pace of revenue growth since going public, as Tencent Holdings Ltd and Alibaba Group Holding Ltd draw advertisers away. Baidu however hasn't outlined a business plan for AI.
 
"AI, it's a technology. And technology itself, until you put it into real applications, into real businesses where it can really transform industries, it's not really of real business value," Li said during an onstage interview. But she predicted "many new business opportunities are going to come out of these core competencies."
 
Like Google Inc, Baidu believes it has advantages in AI that can be used to develop driverless technology, such as internet services that adapt to each user and computers that think and respond like humans. The Chinese company has won approval to test its self-driving technology in California, becoming the 15th company to get permission. And it's also partnered with chipmaker Nvidia Corp to develop the necessary technology.
 
Delving into new areas will be key as its advertising machine peters out. Research firm eMarketer predicted Baidu would fall behind Alibaba in terms of ad revenue this year, thanks in part to a series of well-publicized scandals and increased government regulations.
 
In July, the company warned investors that restrictions on internet advertising would hurt revenue growth for the next two to three quarters and it forecast lower-than-expected sales of 18.04 billion ($2.7 billion) to 18.58 billion yuan in the third quarter.
 
That came as the government implemented rules to limit the number of ads that can be displayed on each page. Baidu is also expecting slower customer growth as it rechecks the credentials of advertisers to ensure their businesses are legitimate.
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Japan to work with Russia on energy development www3.nhk.or.jp

Japan's trade and industry minister and the head of Russia's largest natural gas producer have agreed to work together in energy development.
 
Hiroshige Seko met chief executive of Novatek, Leonid Mikhelson, in Moscow on Saturday.
 
Seko said Japan's economic ties with Russia, which has rich natural resources, developed around the oil and gas sector.
 
Mikhelson said he is glad the bilateral relations are reaching a new level.
 
The 2 agreed that the energy sector is the most important component of the 8-point cooperation plan that Japanese Prime Minister Shinzo Abe has proposed.
The Japan Bank for International Cooperation, together with a French governmental bank, is planning to lend Novatek 60 billion yen or about 580 million dollars for the construction of a liquefied natural gas plant in the Arctic Yamal Peninsula.
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