Harumafuji-funded Mongolian school damaged www.nhk.or.jp

A Mongolian charity school funded by Yokozuna sumo grand champion Harumafuji has suffered a possible act of vandalism following allegations that he assaulted another wrestler.

Fitch Revises Outlook on Mongolia to Positive; Affirms at 'B-' www.fitchratings.com

Fitch Ratings-Hong Kong-17 November 2017: Fitch Ratings has revised the Outlook on Mongolia's Long-Term Foreign-Currency Issuer Default Rating (IDR) to Positive from Stable and affirmed the IDR at 'B-'.

A full list of rating actions is at the end of this rating action commentary.

KEY RATING DRIVERS

The revision of the Outlook to Positive reflects the following key rating drivers:

The fiscal outlook has improved considerably. Fitch forecasts the general government deficit to decline to 7.3% of GDP in 2017, above the 'B' median of 4.2%, but down from a peak of 15.9% in 2016 due to strong revenue growth and capital expenditure cuts. The 2018 budget incorporates recently approved revenue-enhancing measures and only modest expenditure increases, which Fitch believes is consistent with a further narrowing of the budget deficit to 6.5% of GDP next year. Continued adherence to fiscal targets and reforms aimed at curtailing off-budget expenditure and introducing greater independence to the budgeting process should lay a path towards a more robust and credible fiscal framework over time, but is still in a nascent development stage.

Gross general government debt (GGGD) is on a downwards trajectory. Fitch forecasts GGGD to decline to 87.5% of GDP in 2017, having peaked at 91.4% in 2016 as a result of the high budget deficit and a substantial revaluation of foreign-currency borrowings associated with a 20% depreciation of the tugrik. The agency's baseline forecasts suggest GGGD will decline to below 80% of GDP by end-2020, assuming a gradual decline in the primary deficit to 1.5%, average nominal GDP growth of 11.5%, and a broadly stable tugrik. Despite the expected improvement in public debt dynamics, GGGD/GDP will remain substantially above the 'B' category peer median of 58.5% for the foreseeable future, weighing on the sovereign ratings.

Refinancing risks have receded. Implementation of an IMF-led financing and structural reform programme following board approval in May 2017 is expected to unlock up to USD3.5 billion in new funding from multilateral and bilateral creditors over the coming years. This in turn has bolstered investor confidence and facilitated the recent issuance of an USD800 million sovereign bond, which will refinance notes previously due in 2018. The authorities also successfully issued a USD600 million bond in early 2017 to fund an exchange offer for government-guaranteed notes, following announcements that an IMF programme was under consideration. Viewed together, recent capital markets exercises have alleviated any lingering near-term external refinancing risks, having extended the sovereign's nearest external bond maturity until after 2020.

Prime Minister Khurelsukh took office in October 2017, following the ousting of the former prime minister and cabinet in a no-confidence vote in September. This political disruption led to a temporary postponement of the IMF's board meeting to discuss the first review of Mongolia's Extended Fund Facility, but this is now back on track, with the Fund having reached staff-level agreement on the first and second reviews in late-October.

The economy is recovering. Real GDP rose by 5.8% in 9M17, up from 1.2% in 2016, due to a surge in investment tied to the underground development of the Oyu Tolgoi copper mine and a rebound in exports and private consumption. Fitch forecasts real GDP to rise by 4.5% in 2018, from 4.2% in 2017, bringing Mongolia's growth performance broadly in line with the 'B' median of 4.6%. The ongoing customs bottleneck at the Mongolia-China border has triggered a sharp deceleration in coal export volumes since July 2017, from record highs in 1H17. This introduces both downside and upside risk to our forecasts, but is unlikely to derail the recovery given that coal export volumes remain well above their 2015-16 monthly average even at reduced throughput levels, and other key exports, such as copper, are only modestly impacted.

Mongolia's 'B-' Foreign-Currency IDR also reflects the following key rating drivers:

External finances remain weak despite recent improvements. Foreign reserves reached USD2.0 billion in November 2017, up from 1.3 billion at end-2016, supported by acceleration in FDI tied to large mining projects and other inflows. Fitch forecasts foreign reserve coverage will rise to 3.0x current external payments (CXR) by end-2017, up from 2.3x a year prior, but remain well below the 'B' category median of 3.8x. External interest service ratios are exceptionally high at an estimated 14.3% of CXR versus the 'B' category median of 3.5%, reflective of Mongolia's heavy reliance on external debt capital markets, although this reliance should moderate as multilateral and bilateral funding inflows increase. The country's high commodity export dependence (76% of CXR) and export concentration to China (75% of exports) also leave it vulnerable to external shocks, and constrain the ratings.

Mongolia's recent history of sporadic leadership changes increases the potential for political shocks and sharp reversals in policy, but Fitch believes these risks are somewhat muted by the Mongolian People's Party overwhelming parliamentary majority ahead of elections in mid-2020. The more immediate risk, in the agency's view, is that stronger macro performance and the resurgence in external inflows dilute the authorities' drive and commitment to adhere to IMF reform targets.

Overall capital adequacy of the Mongolian banking system should become clearer as a result of an ongoing asset-quality review being conducted as part of the IMF programme. Bank of Mongolia will start its supervisory review in December by applying its own two-year stress testing on individual banks and engaging with them to identify and rectify any potential capital shortfalls. The IMF has estimated bank capital needs could amount to 7% of GDP (15% of system-wide loans), from which up to 3.5% of GDP has been earmarked from public funds as a contingency. While the deployment of public funds for banking-sector recapitalisation would be a potential set-back to recent fiscal improvements, Fitch does not believe the estimated amount would pose a material funding constraint to the sovereign, nor is it sufficient in size to offset other positive developments across Mongolia's sovereign credit profile.

Structural factors such as GDP per capita, governance indicators, and doing business rankings score above 'B' category peers and provide continued support to the rating. Mongolia's small population of roughly 3 million also suggests per capita incomes have the potential to rise dramatically over the longer term if the country can successfully harness its general natural resources endowments through strategic projects such as Oyu Tolgoi and Tavan Tolgoi, and deliver them more reliably via planned rail and other infrastructure connectivity enhancements.

SOVEREIGN RATING MODEL (SRM) and QUALITATIVE OVERLAY (QO)
Fitch's proprietary SRM assigns Mongolia a score equivalent to a rating of 'B' on the Long-Term Foreign-Currency IDR scale.

Fitch's sovereign rating committee adjusted the output from the SRM to arrive at the final Long-Term Foreign-Currency IDR by applying its QO, relative to rated peers, as follows:
- External Finances: -1 notch, to reflect repeated bouts of external financing stress.

Fitch's SRM is the agency's proprietary multiple regression rating model that employs 18 variables based on three-year centred averages, including one year of forecasts, to produce a score equivalent to a Long-Term Foreign-Currency IDR. Fitch's QO is a forward-looking qualitative framework designed to allow for adjustment to the SRM output to assign the final rating, reflecting factors within our criteria that are not fully quantifiable and/or not fully reflected in the SRM.

RATING SENSITIVITIES
The main factors that could lead to positive rating action, individually or collectively, are:
- Continued implementation of credible and coherent macroeconomic policy-making that improves Mongolia's basic economic stability.
- A track record of meeting stated fiscal targets, contributing to an improved outlook for government debt ratios.
- Evidence of substantial improvement in the country's external liquidity position, for example through a build-up of foreign reserves.

The main factors that could lead to negative action, individually or collectively, are:
- Failure to remain current on IMF programme guidelines, which could heighten external financing risks.
- Emergence of systemic financial stress.
- Failure to maintain the GGGD/GDP ratio on a downward trajectory.

KEY ASSUMPTIONS
- IMF staff-level agreement on the first and second reviews receives board approval.
- Customs bottleneck at Mongolia-China border does not deteriorate any further.

The full list of rating actions is as follows:

Long-Term Foreign-Currency IDR affirmed at 'B-'; Outlook Revised to Positive from Stable
Long-Term Local-Currency IDR affirmed at 'B-'; Outlook Revised to Positive from Stable
Short-Term Foreign-Currency IDR affirmed at 'B'
Short-Term Local-Currency IDR affirmed at 'B'
Country Ceiling affirmed at 'B-'
Issue ratings on long-term senior unsecured foreign-currency bonds affirmed at 'B-'

Contact:

Primary Analyst
Andrew Fennell
Director
+852 2263 9925
Fitch (Hong Kong) Limited
19/F Man Yee Building
68 Des Voeux Road Central
Hong Kong

Secondary Analyst
Stephen Schwartz
Senior Director
+852 2263 9938

Committee Chairperson
Tony Stringer
Managing Director
+44 20 3530 1219

Media Relations: Leslie Tan, Singapore, Tel: +65 67 96 7234, Email: leslie.tan@fitchratings.com; Wai-Lun Wan, Hong Kong, Tel: +852 2263 9935, Email: wailun.wan@fitchratings.com.

Norway's state fund 'needs to drop oil and gas investments' www.bbc.com

Norway's government has been told its state-run fund should drop its investments in oil and gas stocks.

Norges Bank manages Norway's $1 trillion (£758bn) sovereign wealth fund on behalf of the government.
It said the step would make the country "less vulnerable to a permanent drop in oil and gas prices", and its advice was not based on a price forecast or the sector's sustainability.
Around 6% of the fund, worth £28bn, is invested in oil and gas stocks.
"This advice is based exclusively on financial arguments and analyses of the government's total oil and gas exposure," said the bank's deputy governor Egil Matsen.
Norges Bank's proposal must now be reviewed by Norway's Finance Ministry, which has said it will announce its own view in the autumn of next year.
If it decides to back the central bank's proposal, the country's parliament would be able to vote on it in June 2019 at the earliest.
Norway is western Europe's biggest oil and gas producer and its sovereign wealth fund, known officially as the Government Pension Fund, is used to invest the proceeds of the country's oil industry.
But Norges Bank said that investing money back into the energy sector meant the government's exposure to the price of crude was too high, particularly given the country's majority stakes in Statoil ASA.
"There is a substantial difference... in return between the oil and gas sector and the broad stock market in periods when the oil price changes substantially.
"Oil price exposure of the government's wealth position can be reduced by not having the fund invested in oil and gas stocks," Mr Matsen said.
'No cause for concern'
Nonetheless, shares in major oil firms such as Shell, BP and Exxon Mobil all traded lower after the announcement.
And analysts warned that the central bank's proposal could have a knock-on effect on the sector.
"The risk for the oil sector is how many investment funds will downsize their exposure to extractive industries," said Jason Kenney, oil analyst at bank Santander.
But Quilter Cheviot analyst Liz Dhillon said the move was "no real cause for concern".
"Nothing is imminent and even if the advice is fully implemented we believe this will have limited impact on the oil and gas producers, as the holdings of Norges Bank are relatively small and no doubt will be disposed of over an extended time frame," she added.

Basic guideline approved to develop Ulaanbaatar in 2018 www.montsame.mn

Ulaanbaatar /MONTSAME/ At its 1st irregular meeting on November 16, Citizens’ Representatives’ Khural approved a basic guideline on developing socio-economy of the capital city in 2018. The basic guideline reflects over 400 policy actions in five chapters.

Gobi desert sees world's longest traffic jam www.news.mn

On the Mongolian-Chinese border, superhuman patience is required. Lorries are queuing over a 130-kilometer stretch of road. It's not only harming the health of the drivers, but also the Mongolian economy.

Automated forging lines for Mongolian metallurgical plant www.news.mn

Mongolian Darkhan Metallurgical Plant installed two automated Schuler forging lines featuring short stroke die forging hammers KGH 5.0B for the manufacture of balls with diameters of 100 to 140 millimeters.

South China coastal city to host ethnic Mongolian carvinal www.news.xinhuanet.com

GUANGZHOU, Nov. 17 (Xinhua) -- China's ethnic Mongolian carvinal, Naadam fair, will be introduced to south China's coastal city Huizhou of Guangdong Province on November 25, organizers said on Friday.

The two-day events, first of its kind in the coastal city, will showcase ethnic Mongolians' "three manly skills" including horse racing, Bokh or Mongolian wrestling and archery at the beach or on the yacht, organizers said.
More than 80 competitors from both northern China's Inner Mongolia Autonomous Region and Guangdong Province will participate in the sports items.
Organizers estimated the fair, cosponsored by Inner Mongolia Chambers of Commerce in Guangdong and Huizhou, will attract thousands of tourists and local residents, who will also enjoy Mongolian costume performance, traditional Mongolian arts and dairy products.
In China, the Naadam fair is a major holiday for ethnic Mongolians featuring Mongolian sports and it is mainly hosted in Inner Mongolia Autonomous Region.

2018 monetary policy direction adopted www.montsame.mn

Ulaanbaatar /MONTSAME/ The Parliament discussed and adopted a resolution on the Main Directions for 2018 State Monetary Policy on November 16.

Comcast, Verizon approached Twenty-First Century Fox to buy some assets: sources www.reuters.com

(Reuters) - Comcast Corp and Verizon Communications Inc have both expressed interest in acquiring a significant part of Rupert Murdoch’s Twenty-First Century Fox Inc’s assets, two people familiar with the situation told Reuters on Thursday.

FILE PHOTO: The Twenty-First Century Fox Studios flag flies over the company building in Los Angeles, California U.S. November 6, 2017. REUTERS/Lucy Nicholson /File Photo
News of competing interest in some of Murdoch’s assets broke even though the U.S. Justice Department was preparing a lawsuit to block AT&T Inc, the largest pay-TV provider in the United States, from buying Time Warner Inc for $85.4 billion, according to a source. This raised questions about the U.S. government’s willingness to allow large media industry mergers.

The Fox assets that buyers have expressed interest in include Fox’s movie and TV production studios, cable networks FX and National Geographic, and international assets such as the Star network in India, and the European pay TV provider Sky Plc. These units have also been the subject of recent talks between Fox and Walt Disney Co, one of the sources said.

Fox shares jumped nearly 8.0 percent in after-hours trading after the Wall Street Journal first reported the news. Shares of Viacom Inc and CBS Corp also rose more than 2.0 percent, a sign investors may see them as potential targets also.

Comcast has approached Fox about its interest, and talks are in early stages, the source added, requesting anonymity. There is no guarantee that talks between the companies will result in a deal.

Fox, Comcast and Verizon declined comment.

After Comcast first bought a stake in NBCUniversal in 2011, buying the Fox assets would give Comcast, the largest cable provider in the United States, an international distribution footprint through ownership of Sky and Star in India.

Comcast has steadily boosted its ownership of content over the years and acquiring Fox’s assets would further position Comcast as a diversified conglomerate to rival Disney, analysts said.

The deal would bulk up its NBCUniversal unit, which acquired Dreamworks Animation for $3.8 billion last year, as well as increase its ownership stake in video streaming service Hulu.

Verizon is also in the early stages of exploring a deal, one of the sources said. A deal could give the U.S. No. 1 wireless phone carrier ownership of movies and TV shows to stream to its mobile subscribers.

Acquisition of a movie studio and cable channels would be a departure for Verizon, which has focused its media deals around advertising technology and internet properties.

Verizon spent $4.48 billion acquiring the core business of Yahoo, which it merged with AOL this year to form a venture called Oath. Led by AOL CEO Tim Armstrong, Oath owns more than 50 brands including HuffPost, TechCrunch and Tumblr.

Roger Entner, an analyst of Recon Analytics, said, “It is undeniable that there is a trend of combining content with distribution.”

Verizon, which has said it is launching a new streaming service, could have more targeted advertising with a vertically integrated platform, he added.

Traditional cable television networks have been struggling with faster-than-expected subscriber erosion in the competition with streaming services like Netflix Inc and Amazon.com Inc.

To increase its scale, Fox tried to buy Time Warner Inc. three years ago and last year announced its intention to buy the rest of Sky beyond the 39 percent it already owns.

The moves also come after the U.S. Federal Communications Commission on Thursday voted to remove key roadblocks to increased consolidation among media companies, potentially unleashing new deals among TV, radio and newspaper owners as they seek to better compete with online media.

Bitcoin recovers from price crash despite bubble warnings www.rt.com

Following huge losses sustained last week, the value of bitcoin has surged, recovering over $2,000 since Sunday. The world’s most popular virtual currency has shown resilience despite continued skepticism over the bitcoin phenomenon.

According to data provided by CoinMarketCap, bitcoin traded at $7506.14 at 11:22am GMT, fixing a daily gain of over seven percent. The cryptocurrency began the year below $1,000 per token.