CPS International is a marketing arm of CPS Securities in Mongolia. CPS Securities is a Perth, Western Australia based AFSL License Holder. To trade ASX and international stocks, feel free to contact me at mogi@cpsinternational.mn or +976-99996779.
Hunnu Coal provides update on development and exploration in Mongolia
Hunnu Coal (ASX: HUN) announces an update on the company’s ongoing drilling and development programmes which include the Tsant Uul Coking Coal Project in Mongolia, the Unst Khudag Thermal Coal Mine and the Tenuun-2 Coal Project.
Key points:
· Aggressive drilling programmes with the aim of generating initial JORC resources and further coal test work are well advanced.
· The Company has now completed a total of 106 drill holes for 11,808 metres of drilling.
· A total of eleven drilling rigs are currently operating across the Company’s projects in the Middle and South Gobi Coal Provinces.
· Four drilling rigs are operating at the Unst Khudag Coal Mine and its surrounding exploration licensed areas (Har Toirom-1 and Har Toirom-2 Discoveries).
· Five drilling rigs are operating at the Tsant Uul Coking Coal Project.
· Two drilling rigs are operating at the Tenuun-2 Coal Project.
· Drilling programmes have been highly successful with major extensions and discoveries at both the Tsant Uul Coking Coal Project and the Unst Khudag Coal Mine
Link to full announcement is here
(CPS Securities was lead broker in Hunnu Coal’s February 2010 IPO on AS. HUN share prices rose by as much as 5c to 90c on the announcement before closing at 89c. 443,944 shares traded hands worth A$391 thousand)
Petro Matad Hits Historical High
September 20 (Mogi) Petro Matad (LON:MATD) shares hit 190 pence during trading today, an all time high, after having announced last week a successful fund raising of US$46.8M. On top of this, EBRD has the option maintain its 17.5% stake using the same 135 pences a share terms. This option expires October 11, 2010.
MATD was trading at 186.8p as of 14:26 London time.
Link to MATD stock chart here
Link to article about announcement
Mongolian Mining, Winsway Seek $1.3 Billion in Hong Kong IPOs
Sept. 20 (Bloomberg) -- Mongolian Mining Corp. and Winsway Coking Coal Holdings Ltd. are seeking to raise as much as HK$9.74 billion ($1.3 billion) in Hong Kong initial public offerings to fund expansion to meet Chinese coal demand.
Mongolian Mining Corp. and its shareholders plan to raise as much as HK$5.28 billion, and Winsway, with Hopu Investment Management Co. as an investor, is seeking as much as HK$4.46 billion, according to term sheets sent to investors. The two companies supply steelmaking coal to China from Mongolia.
China, the world’s biggest steelmaking nation, last year increased imports of coking coal fivefold to a record as the government closed unsafe mines. Mongolian Mining and Winsway Coking Coal are seeking to raise funds as China is forcing mills to shut to reach energy efficiency targets.
“The supply of coking coal remains in deficit over the longer term,” said Helen Lau, an analyst at UOB-Kay Hian Ltd. “But demand for coking coal is subdued recently as China’s power limits reduced steel production. The market sentiment may set the IPOs at the low-to-medium pricing ranges.”
Power cuts may trim Chinese steel supply by 9.6 percent for the rest of the year, according to Mysteel Research Institute.
Mongolian Mining, the nation’s biggest privately owned hard coking coal producer, and its investors are selling 20 percent of the company, or 719.4 million shares at between HK$6.29 and HK$7.34 apiece, according to the term sheet.
Boost Production
The company is seeking to boost production more than eight times through 2013 to 14.7 million metric tons, according to its preliminary share sale document. It plans to build roads and a railway to the Chinese border, and construct Mongolia’s first coal-wash plant.
Based in the Tavan Tolgoi area, Mongolian Mining has signed 5-to-10 year contracts with customers including Jiangsu Shagang Group. Mongolian Mining forecast profit this year of not less than $60 million, or 1.7 cents a share, the draft document said.
JPMorgan Chase & Co. and Citigroup Inc. are the share sale arrangers. The price range offered represents about 11.6 times to 13.6 times estimated profit by the arrangers, two people involved in the transaction said. The company is expected to start trading on Oct. 13, the sale document said.
MCS Mining Group and the European Bank for Reconstruction and Development will sell 86.3 million shares and 36 million shares, respectively, and will own 45.3 percent and 3.2 percent after Mongolian Mining’s offering.
Trade at Premium
SouthGobi Resources Ltd., backed by China’s sovereign wealth fund, trades at 11.2 times consensus forecasts for 2012 profit, JPMorgan said in its research report. Mongolian Mining should trade at a premium because it produces hard coking coal, while South Gobi focuses on semi-soft and thermal coal, according to JPMorgan.
The company sells unwashed coal, which is 35 percent cheaper than washed products, the prospectus said. It will sell washed coal next year when its plant becomes operational, boosting profit margins. A one-year contract with trader Winsway Coking Coal will expire at the end of February, according to the draft document.
Mongolia’s coal exports to China may climb 41 percent to 12 million tons this year from 2009, SouthGobi said in April.
Winsway Coal will sell 990 million new shares at between HK$3.25 and HK$4.50 apiece, according to an e-mail sent to investors. Winsway has an option to sell a further 148.5 million shares, the e-mail said.
Profit Forecast
Winsway Coal hired Deutsche Bank AG and Goldman Sachs Group Inc. as the sale arrangers, according to the e-mail. Bank of America’s Merrill Lynch & Co. unit is also underwriting the IPO, the e-mail said. The company plans to fix the price on Sept. 29.
The company may post net profit of 773 million yuan ($115 million) for 2010 on sales of 8.1 billion yuan, according to an estimate by Deutsche Bank analysts Fred Lam and Nora Min. Earnings are expected to gain 70 percent from the previous year, according to the analysts.
About 75 percent of the proceeds will be used to acquire new transport infrastructure, while 15 percent will be used to buy coal resources and fund mining, according to the e-mail.
A Hopu Investment-led group that includes a unit of China Minmetals Corp.and Silver Grant International Industries Ltd. bought convertible bonds and preferred shares worth $110 million in Winsway earlier this year, according to the e-mail. Hopu, a private equity fund backed by Temasek Holdings Pte, was started by Fang Fenglei, a Chinese partner at Goldman Sachs.
English bankers: a sure sign of Mongolia’s mineral boom
September 17 (FT Blog) China was 30 years ago. Dubai was 20 years ago, and Kazakhstan 10. If you want to go to the next boom country, go to mineral-rich Mongolia.
The boom has already started. A construction surge has reshaped much of the capital, Ulan Bator. A Louis Vuitton boutique has been open for almost a year. And here’s another milestone: the first Mongolia-focused investment bank has opened - and the head of UBS’s London mining team is on board.
Resources Investment Capital has opened an office in UB - as the city’s avant-garde expats call Ulan Bator. It’s a consortium of Origo, a Beijing-based private equity house, and Monnis, a Mongolian conglomerate.
The boutique investment bank’s nickname, Rescap, evokes Rencap (Renaissance Capital), a bank known as a perennial Russian bull. It appears that Rescap’s ambition is to be for Mongolia what Rencap was for Russia.
Rescap will be the first international bank for foreign investment professionals in Mongolia seeking to fundraise for Mongolian state-owned companies and buy Mongolian mineral assets. It will assist companies coming in to Mongolia. Many are trying in the year since Rio Tinto and Ivanhoe Mines signed the Oyu Tolgoi Investment Agreement. Companies from Shenhua in China to BHP Billiton in Australia to Peabody Coal in the US are either invested there or are said to be interested.
Eric Zurrin, head of UBS’s mining team in London, will lead the bank as one of its equity partners. There are other Oxbridge types heading out to Ulan Bator, with wife, kids and Siberian-winter parkas in tow, according to a British mining investor who has lived there for several years. He added:
It’s incredible, these Old Etonians coming out to Mongolia. You can believe it’s going to happen, sure, the Mongolian mining boom. And sit and London in believe it.
But this is different. They come here and they see it. They’re actually moving here with their kids.
At the moment no Mongolian companies are listed on Hong Kong’s stock exchange. But within a month that should have changed: Mongolia Mining Corp is preparing for an IPO worth $700m-$1bn. Other former state-owned assets are expected to follow.
By the time the next IPO comes around a few more pinstriped professionals may have touched down at Genghis Khan International Airport - and stayed.
MERITUS CONTINUES DRILLING IN MONGOLIA
Sep 17, 2010 (TheNewswire.ca via COMTEX) -- (via Thenewswire.ca)
Vancouver, B.C. Meritus Minerals Ltd. (the "Company") (TSX-V - MER) is pleased to announce that its previously announced drill program at its property at Gutain Davaa, Mongolia continues on schedule. The Company announced initial results on August 12, 2010.
The Company confirms that it has no material changes to report at this time.
State-owned mines want coal prices increased
September 20 (news.mn) Representatives of coal mining companies urged the Government to raise coal prices at a meeting on September 18. Officials from the Baganuur and Shivee-Ovoo mines, the two major suppliers to power and heating plants, pleaded that they were in a very difficult situation as no significant investment is made to upgrade their technology while prices were kept frozen. This has led to accumulated loss for them and their revenue can rise only if they are allowed to charge a competitive price for their coal without delay. Authorities of the Shariin Gol mine said they might not be able to meet the coal needs of Darkhan-Uul and Selenge aimags.
Minister of Minerals and Energy D. Zorigt said the Government is examining the suggestion of the Energy Coordinating Office to raise coal prices in stages. The Government would also review next month the question of increased state subsidy for mining companies. He also said MNT12.2 billion will be spent on modernizing the Baganuur mine in stages, and a plan to upgrade Shariin Gol is also under review.
Tax on livestock likely to be revived
September 20 (news.mn) The tax on the number of livestock, imposed in 1998, was discontinued after a year but now there is talk of reviving it. The tax is not the same as the pastureland tax, and is often called the “foot tax” as it is computed on the basis of the number of animals a herder owns.
Related Ministries and offices have been asked to see collection of the tax can resume next year. It will be received by local administrations and the amount would be allocated for local development, said the President’s advisor L. Dashdorj. If a herder pays MNT500 for each sheep, the tax would contribute MNT54 billion to local budgets.
Mongolia scores higher in Global Competitiveness Report
September 20 (news.mn) Mongolia has been ranked 99th among 139 countries in the just released Global Competitiveness Report 2010-2011 published by the World Economic Forum. This is a significant improvement on its last year’s performance when it was put 117th among 134 countries, and is an acknowledgement of the Government’s efforts to improve several aspects of the business environment and to reduce macroeconomic imbalances.
Switzerland retains the top place it claimed last year from the USA , which now falls a further two places, overtaken by Sweden (2nd) and Singapore (3rd). Germany (5th) moves up two places, leading the Eurozone countries.
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Mongolia could be exporting nuclear energy
September 20 (news.mn) A. Undraa, recently appointed Special Deputy Ambassador for Nuclear Energy in the Ministry of Foreign Affairs and Trade (MFAT), answers questions on her new position and what she hopes to achieve.
Why was this special position created?
Nuclear energy is going to be a crucial part of our foreign policy and will be important for our relations with our two neighbors, as also with third neighbors such as Canada.
What experience do you have of this sector?
My field of research at Stanford University in the USA where I was a visiting professor was related to uranium and nuclear energy. I also worked on international nuclear energy policies. So I had a fair idea of what my work is going to be when I took up the position in July.
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CLSA Conference Highlights: Sri Lanka, Mongolia and Copper
September 17 (Seeking Alpha) One big industry event that has been going on is the CLSA Conference, which some of Team Macro Man have had the chance to attend. The sheer number of meetings and events is somewhat mind-boggling, so we are going to have to stick to the highlights at this point in time:
…
- Everyone seems incredibly bulled up about anything that isn’t China, India, Australia (i.e. - the obvious carry and commodities stuff).
Mongolia is about to start producing insane amounts of copper and coal, and in the event it taps the market for sovereign debt, looks like a pretty compelling yield pickup. The Central Asian Sovereign market has previously had some horror stories (Kazakhstan), but TMM is of the view that a bird in the hand is worth two in the bush and Mongolia seems to be executing on its mining projects that Kazakhstan is at getting all that oil out of the Caspian. But TMM is sure that, eventually, those EM punters falling over themselves to buy those bonds and will get Genghis Khan-ed (sorry, we couldn't resist). Robert “Toxic Bob” Friedland of Ivanhoe Mines gave a typically colorful presentation and is of the opinion that “it’s a good time to buy a house – if you build it out of copper bricks.” What does he mine again? Ah yes, copper. Nonetheless, his description of Chiquicamata and other mature Chilean mines as “a little old lady in bed, waiting to die” is geologically pretty accurate if in his characteristic bad taste.
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PM on visit to USA and Canada
September 20 (news.mn) Prime Minister S. Batbold is on an official visit to the USA and Canada from September 20 through October 3. He will be in New York until September 27, where he is to address the summit meeting of the UN General Assembly and attend a round table discussion in "Ensuring special needs for extremely vulnerable countries".
He will also speak at the general debate of the 65th session of the UN General Assembly, and take part in a meeting on "Innovative global management" organized jointly by the United Nations Fund for International Partnership (UNFIP) and the Louise Blouin Foundation, where he will speak on "The future of raw materials". Batbold is to meet with UN Secretary-General Ban Ki-moon, with the chairman of the 65th session of the UN General Assembly, senior officials of the United Nations Development Program (UNDP), international leaders, and familiarize himself with activities of the New York Stock Exchange (NYSE).
Batbold will be in Canada from September 28 to October 1, his first visit to the country since becoming Prime Minister. He will hold a series of talks with leaders there to strengthen bilateral ties, and to widen areas of partnership cooperation. Among those he is scheduled to meet are Prime Minister Stephen Harper and some of his Cabinet colleagues and the Speakers of the Senate and the House of Commons in the Canadian parliament. Batbold will also meet with governors of Ontario and British Columbia provinces, and attend Mongolia-Canada business meetings in Toronto and Vancouver. Several agreements on development of cooperation in road, transportation, construction, urban development, civil service and standardization services are expected to be signed.
On his way home, Batbold will be in Japan to attend the formal ceremony to mark the retirement of Asashoryu from sumo.
EXCHANGE RATES
Ulaanbaatar, Mongolia, /MONTSAME/ Official currency exchange rates as of September 20 set by the Bank of Mongolia:
USD U.S. Dollar 1,336.08
AUD Australian Dollar 1,264.53
EUR Euro 1,756.74
JPY Japanese Yen 15.57
CHF Swiss Franc 1,313.36
GBP British Pound 2,099.58
HKD Hong Kong Dollar 172.08
RUB Russian Rouble 43.04
CNY Chinese Yuan 198.70
KRW Korean Won 1.15
CAD Canadian Dollar 1,307.06
…
Australia
| Close: Shares of Mongolia Related ASX Listed Companies, September 20, 2010 | ||||||||
| 0.890 | 0.040 | 0.885 | 0.900 | 0.850 | 0.900 | 0.845 | 443,944 | |
| 0.014 | 0.001 | 0.013 | 0.014 | 0.014 | 0.014 | 0.014 | 558,920 | |
| 0.185 | 0.000 | 0.185 | 0.195 | 0.190 | 0.190 | 0.185 | 730,000 | |
| 0.135 | -0.005 | 0.130 | 0.135 | 0.140 | 0.140 | 0.130 | 2,298,382 | |
| 0.155 | -0.015 | 0.150 | 0.160 | 0.170 | 0.170 | 0.150 | 736,886 | |
| 33.290 | -0.730 | 33.290 | 33.380 | 33.550 | 33.700 | 33.130 | 1,200,790 | |
| 74.980 | -0.550 | 74.970 | 75.000 | 74.500 | 75.110 | 74.480 | 2,538,233 | |
| 38.780 | -0.120 | 38.770 | 38.780 | 38.720 | 38.780 | 38.580 | 6,614,911 | |
An * next to the security code indicates there has been an announcement today relating to that security. Click on the * to view the list of today's announcements.
Source: asx.com.au
Shares bounce back from lows
September 20 (AAP) Close, The Australian sharemarket slipped slightly today amid some profit-taking, but the market closed well off the day's lows as heavyweight mining and bank stocks partly recouped their losses in light trade.
The benchmark S&P/ASX200 index shed 7.6 points, or 0.2 per cent, to 4631.3, after falling as low as 4604.8. The broader All Ordinaries index dropped 8 points, or 0.2 per cent, to 4677.1.
Among the sectors, materials lost 0.3 per cent, financials slipped 0.1 per cent, while telecommunications gained 0.6 per cent.
need2know:
- European shares rise at the open
- The dollar jumps above 94 US cents
- Asian shares slip on US growth worries
- Gold rises to $US1280, nears new record
- Oil steadies below $US74
- Dow futures are 14 points lower at 10,536
Flat base metals prices and a lower oil price on Friday sent resources stocks lower, while banks and consumer-related stocks also got caught up in the sell-off, which saw the market open about 0.6 per cent weaker.
A speech by Reserve Bank governor Glenn Stevens, in which he was upbeat about the economy and hinted at another rate rise, helped the market claw back some of the losses.
‘‘The Australian sharemarket is taking a breather today following a three-week rise of more than 300 points, or around 7 per cent ... in line with most other markets through Asia and Europe,’’ City Index head of dealing Asia Pacific Michael McCarthy said. ‘‘Volumes are very light in both individual shares and share price index futures, suggesting a lack of conviction in today’s trading.
‘‘It appears many of the large investment funds are absent from the market, possibly ahead of the quarter end next week.’’
Fortescue bucks trend
BHP Billiton was down 12 cents at $38.78 and Rio Tinto had given up 55 cents to $74.98.
Iron ore miner Fortescue Metals Group bucked the trend, gaining 4 cents to $4.88, making it the second best performing stock in the S&P/ASX 50 index behind supply chain and data management company Brambles, which was six cents higher at $6.47.
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Preliminary market turnover was a slim 1.8 billion shares worth $3.5 billion, with 557 stocks up, 552 down and 349 unchanged.
Volumes were about half the daily average, partly dented as Japan celebrated a national holiday.
"Given the good run-up we had last week, the lack of any important data out today, Japan on a public holiday, and some important economic events just around the corner, the stars aligned for the profit-takers," said David Taylor, analyst at CMC Markets.
"Base metals were flat and oil was down, sending resources stocks into negative territory early. Banks soon followed as did consumer staples stocks, producing a broad-based sell-down."
RBA hints next rate move will be up
September 20 (AAP) Update Only renewed troubles in the world economy look like stopping the Reserve Bank of Australia from raising interest rates again before the end of the year.
Addressing a business function in regional Victoria today, central bank governor Glenn Stevens said the largest resources boom since the late 19th century is likely to propel Australian economic growth to something above trend in 2011.
‘‘We think that means that the fall in inflation over the past two years won’t go much further,’’ Mr Stevens told the Foodbowl Unlimited Forum lunch in Shepparton.
However, he said, there were risks to this outlook - a double-dip recession in the United States, a bigger than expected slowdown in China, or the resumption of financial market turmoil that damages confidence.
‘‘But if downside possibilities do not materialise, the task ahead is likely to be on managing a fairly robust upswing,’’ he said. ‘‘Part of that task will, clearly, fall to monetary policy.’’
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Aussie dollar '27% overvalued'
September 20 (Bloomberg) Australia's dollar, this quarter's best performing major currency, is now the most overvalued.
Purchasing power parity, a measure of the cost of goods relative to other countries, shows the so-called Aussie is 27 per cent too expensive, according to data compiled by Bloomberg. The median estimate of strategists and economists is for it to weaken 6 per cent by year-end, the fourth-worst performance of 31 currencies tracked by Bloomberg.
While Australia's dollar has soared 11.4 per cent since June, benefiting from its ties to China's economy, traders speculate new Prime Minister Julia Gillard's planned tax on mining companies will dampen demand for the nation's assets at the same time global economic growth decelerates. The nation's mining industry has enjoyed a record investment boom to feed Chinese demand for iron and coal.
"If I were to pick a currency to have my money in for the next month, it would be Australia's, but after a month I'd pick something else, like the US," said John Taylor, who oversees about $US9 billion as chairman of FX Concepts in New York.
Momentum in the Aussie may lead it to test its record high of 98.5 US cents next month before depreciating to the low 80 US-cent level by early 2011, Taylor said. That's when a slowdown in global growth will prompt investors to seek safety in the US dollar, he said. The currency closed at 93.63 US cents on September 17, strengthening for a fifth straight week, the longest winning streak since the period ended September 25, 2009.
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Global
Asian Stocks Rise on Earnings Speculation; Utilities Decline
Sept. 20 (Bloomberg) -- Asian stocks rose, extending a three-week rally, amid signs corporate earnings growth will be sheltered from a possible U.S. slowdown. Utilities fell.
…
The MSCI Asia Pacific excluding Japan Index gained 0.5 percent to 437.03 as of 7:22 p.m. in Hong Kong before data today that may show U.S. builders remained pessimistic in September. About 11 companies rose as for every nine that fell in the MSCI gauge, which has climbed 7.9 percent in the past three weeks. Stocks advanced even after a Sept. 17 report showed U.S. consumer confidence fell.
“There’s been a bit of a reversal from the over-the-top risk aversion we saw a couple of months ago,” said Matt Riordan, who helps manage about $5.2 billion at Paradice Investment Management in Sydney. “The economic data out of Asia continues to be quite positive for markets.”
Japanese markets are closed today for a holiday. Hong Kong’s Hang Seng Index advanced less than 0.1 percent. South Korea’s Kospi index gained 0.3 percent. Australia’s S&P/ASX 200 Index fell 0.2 percent, paring an earlier drop of 0.7 percent. China’s Shanghai Composite Index lost 0.4 percent.
Consumer Confidence
Futures on the Standard & Poor’s 500 Index gained 0.6 percent. The gauge rose 0.1 percent in New York on Sept. 17 as better-than-estimated earnings at technology companies overshadowed the consumer confidence report.
The Thomson Reuters/University of Michigan preliminary September index of consumer confidence fell to a one-year low, data on Sept. 17 showed. Economists in a Bloomberg News survey estimate that a National Association of Home Builders/Wells Fargo confidence index due later today will record a level of 14 for September, up from 13 last month. Readings less than 50 mean more respondents said conditions were poor.
…
“The big question is double dip or no double dip” recession, Ronald Arculli, chairman of Hong Kong Exchanges & Clearing Ltd., said in an interview with Bloomberg Television today. “It seems the consensus is no double dip.”
U.S. Stock-Index Futures Rise; Best Buy Advances in New York
Sept. 20 (Bloomberg) -- U.S. stock-index futures rose, with the Standard & Poor’s 500 Index poised to extend a three-week rally, as Ireland quelled concern that it will need financial aid from the European Union.
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Futures on the S&P 500 expiring in December gained 0.5 percent to 1,125 as of 7:24 a.m. in New York. Dow Jones Industrial Average futures climbed 0.4 percent to 10,578 and Nasdaq-100 Index futures rose 0.4 percent to 1,961.5.
“We certainly think governments have done enough to create economic growth in the world economy,” Andrew Milligan, the Edinburgh-based head of global strategy at Standard Life Investments Ltd., which oversees about $221 billion, said on Bloomberg Television’s ‘Countdown with Judith Bogner. “But of course there are any number of issues. All of those are going to create some marked cycles in market sentiment and that’s actually quite good for investors.”
Irish Finance Minister Brian Lenihan said the country won’t need financial aid from the European Union as it prepares to sell as much as 1.5 billion euros ($2 billion) in a bond auction this week. Financial shares slumped Sept. 17 on concern that Ireland may need international financial assistance. Ireland may need to accept external assistance if there are additional financial-sector losses or the economy worsens, Barclays Plc wrote in a note to investors Sept. 16.
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"Mogi" Munkhdul Badral
Executive Director
CPS International
Email: mogi@cpsinternational.mn
Mobile: +976-99996779
CPS International is a marketing arm of CPS Securities in Mongolia. CPS Securities is a Perth, Western Australia based AFSL License Holder. To trade ASX and international stocks, feel free to contact me at mogi@cpsinternational.mn or +976-99996779.
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