Friday, June 11, 2010

[CPS NewsWire, Friday, June 11, 2010]

Mogi: Daily Newspaper "Unuudur" Publishes an Inaccurate Article on Hunnu Coal


June 11 (Mogi) On today's Unuudur Newspaper, a front page article titled "Chinese Take Tavan Tolgoi's Little Brother Tsant Uul" states that Hunnu Coal is a small Chinese company that bought a 60% interest in Tsant Uul coal project. The article has the following mistatements:


1. Hunnu Coal is not a Chinese company, but a Mongolia focused Perth, Western Australia based coal exploration company listed on the Australian Securities Exchange.


2. Hunnu Coal did indeed buy a stake in Tsant-Uul Coal Project, but it was actually a 90% interest in the project, not 60%. The article further says that China is aggressively working to claim its stake in Umnugovi Aimag.


The article says it used as its source.


Hunnu's Tsant Uul acquisition announcement:


Unuudur's article(on website and print):


Unuudur's quoted source article (in Russian):



E-Discovery: A Litigator's Perspective


(This is an article by the lawyers of Mongol Bank in the Florida case against individuals who "stole" $23 million)


June 9 ( ... But based on our experience in representing a foreign bank in a $23 million civil theft claim against a group of Broward County defendants, e-discovery can be an expensive, time-consuming process adding to the cost of litigation and the necessity of state-of-art technology in the courtroom. In this case, our client, the Bank of Mongolia, engaged the defendants to aid in financing an affordable-housing program in Mongolia.

Rather than arranging financing, the bank ended up losing millions of dollars as a result of actions by the defendants.


We filed an action in the U.S. District Court for the Southern District of Florida against eight individual and corporate defendants, seeking treble damages under the civil theft claim, as well as a claim under the Racketeer Influenced and Corrupt Organizations Act and a number of state causes of action. Over the past 10 months, our client invested several hundred thousand dollars in the e-discovery process made more complicated by a lack of cooperation by the defendants.

David B. Mankuta is a commercial litigation attorney and shareholder at Atkinson Diner Stone Mankuta & Ploucha in Fort Lauderdale, Fla.



'Dzud' of a Winter Hurts Mongolia's Herders


June 10 (Globan Envision) All Mongolian winters are bitterly cold, but for the most extreme, the Mongols have a special word: a "dzud," which loosely translates as "crisis."


The toll of this bitterly cold weather, however, was far more than just roof damage. More than 8 million cows, sheep, goats, camels and other livestock died -- a staggering loss in a country where three quarters of the population earn their living from herding. One reason this year's dzud was so devastating was that the animals were already weak, explains Oidov Vaanchig, who works for Mercy Corps in Mongolia. Scarce food during the summer made it difficult for herders to feed their goats and sheep. So, when winter struck, their animals didn't have enough body fat to survive.






June 10, Ulaanbaatar, Mongolia, /MONTSAME/ The Ambassador Extraordinary and Plenipotentiary of Mongolia to the Russian Federation D.Idevkhten met Wednesday V.I.Yakunin, a president of the Russian Railways Open Stock Venture (OSV).


Mr. Yakunin said the Russian Railways has a willingness to renovate techniques and technologies of the Ulaanbaatar railways and to improve its capacity of the transit. "The sides decided to augment the authorized capital of the UR by USD 125 million each, thus increasing by USD 250 million. The Russian side will give Mongolian side these 125 million in a form of a soft loan. A financing resource for this has been found, but a final decision has not been made yet," he said.




Budget picture in Mongolia not yet clear, says World Bank official


June 10 ( Klaus Roland of the World Bank was in Ulaanbaatar to attend a meeting on June 9 between the Government of Mongolia and the Bank on the progress of major economic reforms. He answers questions from our reporter.


You are the World Bank's new country director for Mongolia. What are your plans for the country?


Does the World Bank share the IMF concern that the budget deficit should no be more than 6 percent of the GDP?


The issue is not one of 5.9 or 6.1 percent. There are many other considerations such as the total amount of loans that have to be repaid, the nature of the expenses, etc. The economic crisis has cautioned every country to control its fiscal deficit. The picture here is not yet clear as Parliament is still discussing the proposed budget revision. Our task is to offer advice. The World Bank works in over 100 countries, and each country has its own specific problems, and their solutions are likewise different.



Government favors wide exemptions from VAT

(Article on previously reported development)


June 10 ( The Government meeting on Wednesday approved the draft amendment to the law on value-added tax. It will now be submitted to Parliament. Minister for Finance S.Bayartsogt answers some questions on the subject.




PM wants bars to be open until 6 a.m. for world cup matches, but no alcohol after midnight


June 10 ( The Prime Minister has asked the City Mayor to keep bars and nightclubs open after the mandatory closing time at midnight to allow locals and tourists to watch Football World Cup matches played in South Africa. The establishments can be kept open until 6 am but no alcohol can be served after midnight.




Physics scholar returns from USA to become Foreign Minister's advisor


(Article on previously reported development)


June 10 ( Undraa Agvaanluvsan, a visiting professor at the Center for International Security and Cooperation (CISAC) in Stanford, has returned home after being appointed advisor to Mongolia's Minister of Foreign Affairs and Trade, G. Zandanshatar. She will work on nuclear-related issues as well as Northeast Asian security and U.S. affairs. 





Shares rise for 4th day, capping winning week


June 11 (Business Day) Australian shares rose for a fourth day, led by miners and banks, capping a winning week for the benchmark indexes. The benchmark S&P/ASX200 index closed up 70.2 points, or 1.6 per cent, at 4505.5, while the broader All Ordinaries index was up 68.1 points, or 1.5 per cent, at 4516.5.


The ASX200 index ended the week up about 1.3 per cent, continuing a sequence of alternating win-loss weeks to a sixth week. Nearly all sectors rose on Friday, with energy shares jumping 2 per cent, materials gaining 2.1 per cent and financials 1.8 per cent higher.


Among key mining stocks, BHP Billiton was up 96 cents, or 2.55 per cent, at $38.58, Rio Tinto rose $1.23, or 1.81 per cent, to $69.10 and Fortescue added 15 cents, or 3.79 per cent, to $4.11. 

The price of gold in Sydney at 1627 AEST was $US1,220.60 per fine ounce, down $US7.00 on yesterday's closing price of $US1,227.60.




BHP chief sees no end to tax row


June 11 (Business Day) THE BHP Billiton boss, Marius Kloppers, says he can see no end to the dispute over the proposed resource super profits tax despite fresh industry-fed rumours that the government was about to offer a compromise to flush out the miners.


The government is desperate to turn the debate in its favour and will receive some much-needed third party support. The Herald understands that a Community Tax Forum, set up by the Australian Council of Social Service, the Consumers Federation, the Australian Conservation Foundation and the ACTU, is preparing to come out in support of the government's proposal (see story, page 6). The government sought support from industry superannuation funds, but that has not eventuated.






CPI rises 3.1% in May


June 11 (China Daily) China's consumer price index (CPI), a major gauge of inflation, increased by 3.1 percent year on year in May, figures from the National Bureau of Statistics show. The figure dropped 0.1 percent on a month-on-month basis. 

Figures also show that from January to May, property investments increased by 38.2 percent, and urban fixed asset investments rose by 25.9 percent, a 0.2 percent drop from the figure for the January to April period.




China's Inflation Rises to 19-Month High of 3.1%


June 11 (Bloomberg) -- China's inflation accelerated in May to the quickest pace in 19 months, highlighting overheating risks in the fastest-growing major economy.


Lending in May exceeded the median forecast of 600 billion yuan in a Bloomberg News survey of 24 economists. In April, the amount was 774 billion yuan. M2, the broadest measure of money supply gained last month 21 percent from a year earlier, after a 21.5 percent gain in April.


China's trade surplus, which widened to $19.53 billion in May, may remain large, providing ammunition for the U.S. to keep up pressure for currency changes, according to ANZ's Liu.




Housing sales price up 12.4%: NBS figures


June 10 (China Daily) The National Bureau of Statistics of China released a series of figures on the Chinese real estate sector in 70 major Chinese cities from January to May, reported Thursday. Overall commercial building sales have reached 1.58 trillion yuan, a 38.4% increase from last year, and commercial building sales amount increased 33.6%.


In May 2010 alone, housing sales price grew 12.4%. For the new residential buildings, price soared 15.1%, sales price of economically affordable housing increased by 1.4%, and commercial building sales price increased 0.4%.




China Reaches Lewis Turning Point as Labor Costs Rise


June 11 (Bloomberg) --


China, once an abundant provider of low-cost workers, is heading for the so-called Lewis turning point, when surplus labor evaporates, pushing up wages, consumption and inflation, said Huang Yiping, former chief Asia economist at Citigroup Inc. The result may prompt manufacturers to switch to cheaper countries such as India and Vietnam.


China's potential annual economic growth rate may slide to 9 percent by the middle of this year, from 11 percent, as the impact of a shrinking young labor force bites, said Lu Ting, an economist with Bank of America-Merrill Lynch in Hong Kong.


"In lower-end export industries there's already a case for China having lost competitiveness against places like Vietnam," said Jim Walker, Asianomics Ltd.'s chief economist in Hong Kong.






Asian Stocks Rise to One-Week High on Recovery; Bond Risk Falls


June 11 (Bloomberg) -- Asian stocks rose to a one-week high on an increased estimate of technology spending and a gauge of bond risk declined after the European Central Bank said it will extend measures to battle the region's debt crisis. The MSCI Asia Pacific Index of equities climbed 1.3 percent to 112.46 at 3:15 p.m. in Tokyo.


"People are now optimistic about the global economy," said Juichi Wako, a senior strategist at Tokyo-based Nomura Holdings Inc. "Investors who had avoided risk assets have started buying them." 

BHP Billiton Ltd., the world's largest mining company and Australia's No. 1 oil producer, advanced 2 percent to A$38.37 in Sydney and was the biggest contributor to the MSCI Asia Pacific Index. Aluminum Corp. of China Ltd. climbed 3.9 percent for the steepest increase on Hong Kong's Hang Seng Index.


The euro strengthened to $1.2106 and 110.85 yen, bringing its gain for the week against the dollar to 1.2 percent following two weeks of losses. Against the yen, it's set to rise 0.9 percent, snapping a six-week decline that was the longest since the euro's introduction in 1999.

... EU



Banks With Sovereign Debt Ignore Not-If-But-When Default


June 11 (Bloomberg) -- European banking shares indicate a Greek debt default may be just a matter of time. Investors have already pushed down financial stocks enough to imply the "erosion" in book value that may result from losses tied to a sovereign debt restructuring, said Dirk Hoffmann-Becking, an analyst at Sanford C. Bernstein in London. 

A Bloomberg index of European financial firms dropped as much as 22 percent since April 15 to the lowest level since July. A $1 trillion aid package from the European Union and International Monetary Fund may delay a Greek default and give Spain, Italy and possibly Portugal time to get their finances in shape, averting a wider contagion, analysts said. Greece's debt burden is likely to prove unsustainable, said Thomas Mayer, Deutsche Bank AG's London-based chief economist.




Gold May Climb in London as Lower Prices Spur Investor Buying


June 11 (Bloomberg) -- Gold may gain for the first time in four days in London as lower prices spur buying from some investors on concern that Europe’s fiscal crisis might linger.  Gold slid 1.4 percent yesterday, the most in a week, after reaching a record $1,252.11 an ounce on June 8. Holdings in the world’s biggest bullion-backed exchange-traded fund rose to an all-time high. The euro was little changed against the dollar today.

Gold for immediate delivery added $2.45, or 0.2 percent, to $1,219 an ounce at 9:07 a.m. local time. The metal has slipped 90 cents this week. Bullion for August delivery was 0.1 percent lower at $1,220.50 on the Comex in New York.


“There may be more downside risks for gold,” said Wong Eng Soon, Singapore-based analyst with Phillip Futures Pte. Still, “considering that gold was at $1,250 mere days ago, gold at $1,200 will be attractive to investors who will be tempted to take up long positions on bargain-hunting.”




Copper Heads for Biggest Weekly Gain in Two Months; Zinc Rises 

June 11 (Bloomberg) -- Copper headed for its largest weekly advance in two months on reduced concern that Europe’s debt crisis and a slowdown in China, the world’s biggest consumer, would hurt demand. Zinc increased.  Three-month delivery copper was little changed at $6,415 a metric ton on the London Metal Exchange, after losing as much as 0.6 percent. The contract has gained 2.2 percent this week, the most since the start of April. Zinc increased 1.2 percent to $1,741 a ton.


Copper entered a bear market last week, plunging more than 20 percent from an April peak on concern the global economic recovery may be at risk, imperiling demand. The metal slumped as low as $6,037.50 on June 7, the lowest price in eight months.


Among other economic data released today, China’s inflation accelerated in May to 3.1 percent, the quickest pace in 19 months. Banks extended 639.4 billion yuan of new local-currency loans last month, exceeding a Bloomberg News survey forecast.


Copper for September delivery in Shanghai jumped as much as 2 percent to 51,640 yuan ($7,561) a ton and closed at 51,400 yuan. Shanghai zinc gained 1.5 percent to 14,380 yuan and aluminum increased 1.2 percent to 14,685 yuan.


Shanghai exchange will be closed from June 14 to June 16 for the Dragon Boat Festival holiday. The exchange will temporarily increase margin requirements to 10 percent and daily trading limits to 7 percent on the days around the holiday.




"Mogi" Munkhdul Badral

CPS Mongolia


Mobile: +976-99996779


CPS Mongolia is a marketing arm of CPS Securities in Mongolia. CPS Securities is a Perth, Western Australia based ASX Licensed Financial Services Company. To trade ASX stocks, feel free to contact me at or +976-9999-6779.

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