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.
<Mogi & Friends Fund A/C>
Maiden Investment Up On 2nd Day
Mogi: Starting from today, I will be writing a small blog on a small fund I’ve created with a few friends. Not sure if my little game merits the term fund in the name but thought “Mogi & Friends Fund” was an appropriate title.
Thought I start small, meaning not a large amount from each contributors, and quick, so 6 friends invested US$1,000 each to form an initial capital of US$6K.
I’ll elaborate more about the fund on later entries but to get straight to the point, the fund’s initial investment is up 2.73% on the second day. Well actually up 9.3% but had to deduct brokerage from it.
What did I buy? A penny stock. I’ve been in love with penny stocks lately. Why? One good announcement, it can go up 20, 30, 50, 100 percent in just a few days. So hoping my first and only stock holding will do good.
Recent examples I’ve witnessed are: one copper company in Brazil, up 261% in just last 2 weeks, an iron ore company in Congo, up more than 100% this month alone, and you all know about Petro Matad, and Hunnu Coal. Hunnu Coal, whose shares were offered at 20c, reached as high is $1.28 in the space of just 2 months since listing. Petro Matad on the other hand rose 873% this year. Petro Matad is not a penny stock anymore perhaps but it was when it was less than 19 pence at the end of 2009.
I’ll leave the first entry on this note and of course, comments and opinions will be greatly appreciated.
Mogi
Since this is the first entrance, decided to put it at top, but next editions will be posted at the very bottom of the newswire.
Mongolia
Winsway Coking Coal Raises About $472 Million From Hong Kong IPO
Sept. 30 (Bloomberg) -- Winsway Coking Coal Holdings Ltd. raised HK$3.66 billion ($472 million) selling stock in an initial share sale in Hong Kong, according to terms for the transaction.
Winsway, which processes and transports coal from Mongolia into China, sold 990 million shares at HK$3.70 apiece, the terms show. That’s lower than the mid-point of the HK$3.25-HK$4.50 range specified in the company’s IPO prospectus. Winsway has an option to sell a further 148.5 million shares, the terms show.
Deutsche Bank AG, Goldman Sachs Group Inc. and Bank of America Corp.’s Merrill Lynch & Co. unit managed the sale, according to Winsway’s IPO prospectus.
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Winsway may post net profit of 773 million yuan ($115.6 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.
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Some 72 percent of the IPO proceeds will be used to acquire new logistics and transport infrastructure, while another 14 percent will be used to buy coal resources and fund mining, according to the prospectus.
(Mogi:
Download Winsway’s (1733.HK) Prospectus here
Visit Winsway’s website here)
ENTRÉE GOLD PROVIDES MONGOLIA EXPLORATION UPDATE
VANCOUVER, Sept. 29 /PRNewswire-FirstCall/ - Entrée Gold Inc. (TSX:ETG; NYSE AMEX: EGI; Frankfurt:EKA - "Entrée" or the "Company") has committed a further US$1.9 million to continue its systematic work targeting prospective formations on its 100%-owned Shivee West property in Mongolia. The Shivee West exploration program reflects Entrée's strategy to explore for and potentially expand its growing portfolio of gold and copper resources in Mongolia and on its other projects worldwide.
In February 2010, the Company approved a budget of US$4.0 million for exploration on its Shivee West property. Surface work began in April along the Shivee West Trend and consisted of a deep-probing induced polarization ("IP") survey, a close-spaced gravity survey, geochemical sampling and detailed geological mapping to augment the existing database followed by a diamond drilling program initiated in late June. The program has been successful in furthering our understanding of the geology of Shivee West, resulting in the budget expansion to continue exploring until year end. A further four holes are planned to complete the Company's 2010 exploration program.
Greg Crowe, President of Entrée, commented, "We are excited at the growing potential for additional discoveries both on our 100%-owned ground and on the Entrée-Ivanhoe JV ground. Porphyry systems often host multiple orebodies that occur along parallel structural trends. BHP Billiton and Ivanhoe tested the original surface showings at Oyu Tolgoi with numerous holes from 1997 onwards. However, the rich Hugo Dummett orebody was not discovered until 2003. The new Heruga North deposit was not discovered until 2010 and only after the completion of more than 1,600 drill holes. Entrée's program to test for deep, blind deposits at Shivee West is by comparison in its infancy. We will continue to test viable targets at Shivee West using a systematic, step-by-step approach to exploration."
The Shivee West Trend parallels the prolific Oyu Tolgoi Trend located 10 kilometres to the east. Drill targets were derived from the interpretation of geological, geochemical and geophysical information collected over a number of years. This information was integrated with updated research which has led to a better understanding of the formation and geological setting of the Oyu Tolgoi deposits and their significance with respect to the Shivee West Trend. The proximity to the Oyu Tolgoi system combined with results from the above described surveys, suggest potential for the formation of other porphyry deposits in the district. Entrée has conducted numerous deep-probing IP, gravity and geochemical surveys in search of viable drilling targets on Shivee West.
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(Mogi: ETG in Toronto rose 8%, EGI in NY rose almost 8% as well during trading on September 29, going as high as 10.18% in intraday. Links charts of to ETG and EGI)
Petro Matad Ltd Half Yearly Report
Interim results for the six months ended 30 June 2010
LONDON, 30 September 2010: Petro Matad Limited ('Petro Matad' or 'the Company'), the AIM quoted Mongolian oil explorer, announces its unaudited interim results for the six months ended 30 June 2010 and updates shareholders on events since the period end.
Highlights:
o Initial drilling success from Company’s first exploration well
o Drilling programme ongoing
o Funding secured to accelerate development of the Company’s assets
o Strong technical team appointed
o New institutional shareholders
(Mogi: MATD rose around 870% this year. Link to YTD chart. MATD closed at 184.35 pence today, September 30. )
Marubeni, Toyo in Mongolia's 1st oil refinary project
* Mongolia to rely less on oil product imports from Russia
* Mongolia seeking foreign help to boost oil output, as well (Recasts lead, adds details)
September 29 (Reuters) - Marubeni Corp (8002.T) said on Wednesday it has joined a local Mongolian government-backed firm and Japan's Toyo Engineering Corp (6330.T) on a $600 million project to build the first oil refinery in Mongolia.
The refinery, slated to be up and running in autumn 2014 and located in Darkhan city about 200 km north of Ulan Bator, will help the land-locked country reduce its full dependance on imports of oil products from Russia.
Capacity is seen at an estimated 44,000 barrels of crude per day to produce 1 million tonnes of gas oil, 630,000 tonnes of gasoline and 60,000 tonnes of jet fuel, each per year, Japan's No.5 trading firm said on Wednesday.
Marubeni would work with Toyo Engineering to build, maintain and operate the facility, in the project with Mongol Sekiyu Co., headquartered in the capital of Ulan Bator.
Marubeni said it plans to deliver oil to the refinery from Russia's Irkutsk Oil Co, which signed a comprehensive business pact with Marubeni in June on supplies. [ID:nTOE65K01H] Crude supplies will also come from Kazakhstan.
"We're looking to utilise a finance instrument provided by JBIC," a Marubeni spokeswoman said, referring to the government-backed Japan Bank for International Cooperation.
Mongolia, which sits on vast quantities of untapped mineral wealth, currently produces crude oil near the border with China for export to the neighbouring nation via a pipeline.
Mongolia has previously said it was looking for foreign investors to help it boost domestic crude production tenfold in the next three years and build the country's first refinery.
International Road Dynamics Wins C$769K Contract In Mongolia From MCS Electronics
September 29 (RTTNews) - International Road Dynamics Inc. (IRD.TO) said it received a new contract in Mongolia from MCS Electronics valued at C$769,000. The contract involves the supply of a toll system at 4 plazas as well as 4 pre-selection slow speed Weigh-in-Motion sorting systems to keep overloaded trucks off the road. Further, the contract involves the use of RFID tags and readers to collect tolls from the trucks using the toll way. MCS Electronics would act as the contractor for this project which is scheduled to be commissioned in early 2011.
The project involves the supply and installation of IRD's Weigh-in-Motion and toll collection systems along the Tavan Tolgoi - Gashuun Sukhait toll road, a crucial route being used to enhance mining development and expansion in the Gobi region bordering China. The toll road is built to transport coal to China from the Ukhaa Khudag coal deposit, a high quality coal deposit in Mongolia.
Central Asia Metals joins AIM ahead of production start at Kazakhstan copper project and develop projects in Mongolia
September 30 (Stockopedia) Central Asia Metals (AIM:CAML), a mining exploration and development company focused on base and precious metals in Central Asia, began trading on AIM, this morning after raising £38.1m in a share placing priced at 96p per share. The company’s market capitalisation in admission was £82.7m and proceeds from the fundraising have been earmarked for the construction of a commercial SX-EW plant at Kounrad in Kazakhstan. The move follows a successful existing pilot scale operation at the project, which will produce 10,000 tonnes of copper per year, with first production expected in the fourth quarter of 2011. Proceeds will also be used to develop the company's copper/gold exploration assets at Alag Bayan and molybdenum project at Handgait, both in Mongolia.
Central Asia Metals is a UK incorporated company that currently has interests in a number of copper, gold and molybdenum mining exploration and development assets in Kazakhstan and Mongolia. In Kazakhstan, the company has advanced plans for the construction of a plant at the former Kounrad copper mine that will have the capacity to deliver 10,000 tonnes per annum of near term, low-cost copper production.
Kounrad was acquired in September 2007 and is the most developed asset. It was formerly an open-pit copper mine in Kazakhstan that was operated between 1936 and 2005. The site around the mine contains a number of dumps of waste material from the mine from which copper can be extracted through an in-situ leaching process followed by Solvent Extraction - Electro-Winning ('SX-EW'). A pilot scale SX-EW plant has been commissioned at the site and has been operating successfully since August 2008. To date the company has produced over 320 tonnes of cathode copper from the processing of material in the dumps for sale to third parties. Initial construction ground-works for the commercial SX-EW plant have already been started. Central Asia Metals plans to construct a commercial SX-EW plant at the old Kounrad mine in a joint venture with a Kazakh government entity, Saryarka. Capital expenditure for the commercial SX-EW plant is estimated to be US$46.9m with low direct cash operating cost estimated at US$0.38 per pound of copper produced.
Central Asia Metals also has exploration opportunities with the potential to deliver substantial additional upside. One of these is Alag Bayan, an early stage exploration project in Mongolia, where the company is focused on outlining a potentially significant copper/gold porphyry target. This asset is situated close to the Oyu Tolgoi copper mine being developed by Rio Tinto (LON:RIO) and Ivanhoe Mines. In addition Central Asia Metals plans to develop further its molybdenum exploration project, Handgait, in Mongolia.
Nick Clarke, the chief executive of Central Asia Metals, said: “We are delighted that the company's shares have commenced trading on AIM. Central Asia Metals has a well balanced asset portfolio of production, development and exploration assets, with the Kounrad Project on track to increase production at a very low operating cost. We already have an established presence in Kazakhstan and Mongolia along with a track record of successful operations in each country. We also have the added benefit of being in close proximity to China, which is by far the world's largest consumer of copper and many other industrial commodities.”
Link to CAML’s website here
Link to CAML’s Interim Results and Operation Update (Sep.30) here
Link to Investor Presentation here
DRAFT BUDGETS TO BE SUBMITTED TO PARLIAMENT
September 30, Ulaanbaatar, Mongolia, /MONTSAME/ The cabinet discussed Wednesday a draft budget of Mongolia for 2011, a draft budget of social insurance Fund for 2011 and a draft budget of the Human Development Fund (HDF) for the next year, and decided to submit them to parliament after having reflected in them Ministers' proposals.
Total revenue of the master budget of 2011 expected to stand at MNT three trillion, 114 billion and 100 million which is equivalent to 39.7 per cent of the Gross Domestic Product (GDP), and the total expenditure of the master budget--at MNT three trillion, 250 billion and 800 million--equivalent to 41.5 per cent of the GDP. It means that the master budget will have a deficit of MNT 136.7 billion.
Total revenue of the state budget for the next year expected to have MNT 2,302.3 billion, and the expenditure--MNT2,250.2 billion. Thus, the state budget will have a benefit of MNT 252.0 billion. The total revenue of the HDF's budget for 2011 will have MNT 328.9 billion, the expenditure--MNT 795.9 billion, which is more than the expenditure of 2010 by 461.0 billion. It means that the deficit of the HDF will reach 467.0 billion.
The cabinet has considered that indicators of the draft budget for 2011 satisfy all criteria of projects co-implemented with the International Monetary Fund (IMF).
Parliamentary Autumn Session Starts Friday
Ulaanbaatar Railway meeting put off by a month
September 30 (news.mn) The meeting of the General Committee of Ulaanbaatar Railway, scheduled for the end of September, has been postponed indefinitely, though it is expected to be held within a month. It will have to select the next head of the joint company. It is the turn of a Russian to be nominated but the tradition could be changed as D. Jigjidnyamaa has been appointed the acting head.
The General Committee has six members, three each from the two sides. No reason has been given for the meeting being postponed except that the members could not make time for the scheduled date.
Mongolia- Russia-China Border Railway Commission holds annual meeting
September 30 (news.mn) The Mongolia- Russia-China Border Railway Commission meeting began in Ulaanbaatar on Monday. This annual conference has been held since 1956 with the three countries playing host by turn. The Russian team was led by the A.I. Chernikh, Chief of the Transportation Center of the Sibir Railway, and the Chinese team by Ma Tsyan Fei, Deputy Chief of Chinese Railway Transportation.
Briefing media, Chernikh said that they had exchanged views on how to improve services, and reviewed implementation of the decisions reached at last year’s meeting in Khuhhot. Freight and passenger train transportation would be thoroughly discussed. 1.5 million tons of freight has passed through Mongolia-Russia borders so far this year. The Russian Railway has been reformed and the private sector is now very active.
D. Jigjidnyamaa of the Ulaanbaatar Railway added that the conference was focusing on technical issues and also discussing revision of border crossing and customs procedures. He said increased freight rates have had no effect on the volume transported but the work load relating to freight transfer in Zamiin-Uud and Ereen has to be eased.
Aberdeen International Inc. (TSX: AAB) research and analysis
September 28 (eResearch) Aberdeen reported a loss of $0.07 per share for the second quarter of fiscal 2011 (ended July 31, 2010), compared with earnings of $0.04 per share for the same period in fiscal 2010.
1. Unrealized Gains /(Losses)
The loss in the latest quarter was largely the result of a $10.5 million unrealized loss on investments in the Company’s investment portfolio compared with an unrealized gain of $7.9 million in the fiscal 2010 quarter. The portfolio had an aggregate unrealized gain of approximately $3.5 million at the end of the quarter.
The latest results reflected overall weakness in junior resource equity markets during the period. Conditions in this segment of the equity market have, however, improved considerably since the end of the quarter, leading to significantly better valuations for many of the holdings in the portfolio.
2. Realized Gains/(Losses)
During the latest quarter, Aberdeen realized gains of $778,005 compared with a loss of $757,523 for the year-earlier quarter. The Company added approximately $2.4 million of new investments and generated approximately $6.1 million of proceeds from sales of investments. Net Asset Value
As at July 31, 2010, the Company’s net asset value was $98 million ($1.12 per share), approximately $5 million below the $104 million ($1.19 per share) value at the end of the first quarter of fiscal 2011 (ended April 30, 2010). NAV was $8.8 million higher than a year earlier.
First-Half Results
For the first half of fiscal 2011, the Company incurred a loss of $0.05 per share compared with a profit of $0.08 per share for the first half of fiscal 2010. As was the case in the recent quarter, the loss was primarily due to the impact of a non-realized loss of approximately $12.4 million on investments in the fiscal 2011 period compared with an unrealized gain of $15.2 million in the first half of fiscal 2010. During the first six months of fiscal 2011, the Company realized gains on the sale of investments of $7.0 million compared with a loss of $1.0 million in the first half of fiscal 2010. For more details on the second-quarter results, see Aberdeen’s September 15, 2010 news release, available on SEDAR atwww.sedar.com.
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(Mogi: Aberdeen owns Temujin Mining, whose licenses cover 3 advanced projects in the Oyu Tolgoi copper/gold belt. Link to AAB 3 month stock chart)
Canada Expands Agricultural Cooperation with Mongolia
September 28 WINNIPEG (Dow Jones)--Canada has increased its agriculture cooperation with Mongolia with the signing of an important Agriculture Memorandum of Understanding between the two countries, Agriculture and Agri-Food Canada said Tuesday in a statement.
Canada's Agriculture Minister, Gerry Ritz, joined the Ambassador of Mongolia to Canada, His Excellency Tundevdorj Zalaa Uul to sign the MOU which will be key to enhancing bilateral relationships between Canada and Mongolia.
The signing was witnessed by Canadian Prime Minister Stephen Harper and Mongolia's Prime Minister Sukhbaatar Batbold. "International trade and cooperation is key to making sure Canadian farmers can make their money from the marketplace," said Ritz.
The MOU will offer a sharing platform between the two countries and give Mongolia and Canada a better understanding of each other's systems, policies and regulations. It will facilitate sharing of best practices as well as strengthen agricultural cooperation and commercial relations between the two countries.
The MOU will help foster alliances between commercial interests, facilitate exchange of technology, expertise and be a catalyst for future trade, according to the statement. For example, Canada has commercial opportunities in agricultural machinery and livestock production in Mongolia. Canada's world class genetics will certainly contribute to further the development of Mongolia's animal industry.
Harper hosts Mongolian PM at launch of free-trade talks
September 28 (The Globe and Mail) Mongolia views the Canadian economy as a model to follow, nestled as it is next to a world superpower and relying on mining to expand its largely agricultural economy.
On Tuesday, Prime Minister Stephen Harper hosted Mongolian Prime Minister Sükhbaatar Batbold for a bilateral meeting in Ottawa, where they launched the early stages of free trade talks.
Once a communist land of shepherds and farmers, Mongolia now attracts foreign investors – including Canadian mining firms – that are keenly interested in the copper, gold, uranium and other mineral deposits buried deep in the landlocked Asian country.
A rare example of stable democracy in Asia, Mongolia sent troops to Western military missions in Iraq and Afghanistan.
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Trade: Canada is the second-largest overall foreign investor in Mongolia – after China – with $600-million in direct investment. China, Russia and India all have interests in the uranium being mined in Mongolia – sometimes leaving Canadian mining firms caught in the middle. Earlier this year, Canadian-owned Khan Resources took legal action against the government after a mining licence was revoked.
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LSE offers help and support to develop capital market in Mongolia
September 30 (news.mn) Yesterday’s conference organized by the London Stock Exchange (LSE) in Ulaanbaatar discussed issues relating to investment in Mongolia, the future of the Mongolian Stock Exchange (MSE), corporate governance and plans to develop the capital market. The LSE held a similar conference last year and followed it up with a Mongolian Companies’ Day at LSE in the summer.
The start of the meeting faced problems with translation, and many in the audience missed what was said about the LSE’s likely role in Mongolia’s development, investment conditions in the country, and about the LSE itself. Tracy Piers of the LSE later told journalists that work should begin without delay on developing the capital market in Mongolia, so that the expansion in mining received financial support. LSE would help sustain the flow of foreign investment in Mongolian companies if it was asked to act as advisor to the MSE. Some of the journalists’ questions to her and the answers she gave are given below.
What do you think of the Government of Mongolia’s plans to go for an IPO and also bond sales?
These are important matters and will be significant for the development of Mongolia. Much preparatory work will be needed and the LSE is ready to offer its support.
Did you hold this meeting to support your chances to be chosen for the MSE restructuring?
The selection is under way and we are confident our reputation, expertise, and experience will be noted. We would bring best management practices and the newest technology to the MSE if we are chosen.
Will LSE allow an IPO by Erdenes Tavantolgoi Ltd?
I do not want to answer hypothetical questions. Any Mongolian company seeking an IPO will have to fulfill the requirements of the international market. We shall be glad to offer help and suggestion if Erdenes Tavantolgoi asks for our services in raising capital in the international market, but it will have to meet our basic criteria.
Do you think Mongolians are ready to join the international market?
LSE has 200 years of experience and we can certainly help raise funds for mining companies for the development of Mongolia. Mongolian companies can choose to join the main market or the Alternative Investment Market (AIM) which is our very successful international market for smaller growing companies, like Petro Matad.
Investors focus on lack of skilled manpower for projects
September 30 (news.mn) Delegates at the 13th Annual Investors Conference of the North America-Mongolia Business Council, which began on Tuesday, did not discuss the usual issues such as investing capital, exploiting mines and evaluating business risks. Instead they focused on availability of manpower at all levels and how other operational requirements can be met.
Their conclusion, after a detailed study of what Mongolia can offer, is that the education system here is not up to world standards and that even the trained labor does not meet market requirements. They are wary of Government efforts to expand vocational training facilities because, as a delegate said, these still depend on obsolete Russian equipment and techniques. Mongolian participants were quick to point out that the reforms in fact cover everything from training manuals to teaching skills and that all the new training centers will be equipped with modern software.
Several foreign-invested projects, such as Oyutolgoi, are arranging for their own training courses and the results of proper training have been heartening. The new breed of repairmen or tractor/combine drivers is very different from their predecessors. A representative of Wagner Asia said their schemes produced skilled technical workers suited to work anywhere.
We asked the Chief of the Technical Professional Education and Training Agency of the Government Agency, N. Byambasuren, who used to work for Wagner Asia what the situation was.
You have asked for investors and the private sector to share the cost of improved technical and professional training facilities. How have they received the idea?
The 2009 law has a provision that economic entities should earmark a percentage of their salary budget for training but the percentage has not been fixed. Training mining and construction professionals costs more and businesses in these fields have agreed to invest 3% while service professionals such as hairdressers and cooks need less money to be trained, so companies here will spend 1%.
How much capital would be collected from them?
The State Tax Office estimates that 1% of the salary budget of all foreign and domestic economic entities would be MNT1.8 billion.
Do foreign investors have any plan to pool their resources for joint training centers?
We could do this. For instance, the Oyutolgoi project will altogether invest MNT36 billion on construction and renovation of training centers where 3,300 Mongolian professional workers will go. Oyutolgoi has allocated USD8 million for renovation of 5 vocational training centers and USD5million for the construction of new schools. They will also establish three laboratories in Dalanzadgad. Wagner Asia and MAK may also do similar things. I think it will take about a year to get everything ready.
EXCHANGE RATES
Mongol Bank FX Rate site
Australia
| Close: Mongolia Related ASX Listed Companies, September 30, 2010 | ||||||||
| 0.890 | 0.010 | 0.865 | 0.890 | 0.860 | 0.890 | 0.860 | 151,350 | |
| 0.021 | -0.001 | 0.021 | 0.022 | 0.022 | 0.022 | 0.020 | 9,833,328 | |
| 0.190 | -0.005 | 0.185 | 0.195 | 0.195 | 0.195 | 0.190 | 513,313 | |
| 0.140 | 0.000 | 0.140 | 0.145 | 0.140 | 0.140 | 0.140 | 1,116,067 | |
| 0.160 | -0.015 | 0.155 | 0.170 | 0.175 | 0.175 | 0.160 | 106,302 | |
| 33.060 | -0.900 | 33.050 | 33.130 | 34.080 | 34.090 | 33.010 | 918,646 | |
| 76.770 | -0.490 | 76.770 | 76.960 | 77.600 | 77.700 | 76.560 | 2,992,376 | |
| 38.910 | -0.460 | 38.910 | 38.950 | 39.460 | 39.540 | 38.910 | 16,998,716 | |
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
Gloomy end to bright month for shares
September 30 (AAP) Close The Australian sharemarket suffered big losses today in widespread profit-taking after recent gains, although the market still locked in a 4.1 per cent gain for September.
At the close, the benchmark S&P/ASX200 index was down 62.1 points for the day, or 1.3 per cent, to 4582.9, while the broader All Ordinaries index fell 57.1 points, or 1.2 per cent, to 4636.9.
All sectors posted losses, but the finance sector was the biggest drag on the market, losing 1.7 per cent. Materials were down 1 per cent and energy shares fell 1.1 per cent.
need2know:
- European stocks drop at the open
- Nikkei drops 2%, still posts 6% monthly gain
- The dollar slips below 97 US cents
- Gold steady at $US1307, near record
- Dow futures are down 39 points to 10,741
Data out today showed building approvals dropped 4.7 per cent in August, far weaker than expectations for a flat outcome, suggesting higher interest rates were hurting demand for new homes and the buoyant construction sector could slow next year.
Private sector credit data also missed expectations, rising only 0.1 per cent in August.
"The data suggests that the domestic economic recovery may not be as robust as previously thought. The housing sector certainly looks like it is slowing, with house prices down for a third straight month," said Savanth Sebastian, economist at CommSec, noting business credit was down 4 percent on a year ago.
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For the quarter, the index notched up a 6.5 per cent gain, compared with a leap of 19.9 per cent in the same quarter a year earlier.
Global
Asian Stocks Fall the Most in Three Weeks; Banks, Nintendo Drop
Sept. 30 (Bloomberg) -- Asian stocks fell, dragging down the MSCI Asia Pacific Index by the most in three weeks, amid concern Europe’s debt crisis will slow a global economic recovery and after Nintendo Co. cut its profit forecast.
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The MSCI Asia Pacific Index fell 0.8 percent to 126.54 at 7:17 p.m. in Tokyo, its largest drop since Sept. 8. All 10 industry groups retreated. The index is on course for an 8.6 percent increase this month, the largest monthly advance since May 2009. The 12 percent climb in the three months ending today is the biggest quarterly increase of the past year.
Japan’s Nikkei 225 Stock Average lost 2 percent, the biggest drop in the Asia-Pacific region today. Australia’s S&P/ASX 200 Index sank 1.3 percent. Hong Kong’s Hang Seng Index fell 0.1 percent. China’s Shanghai Composite advanced 1.7 percent.
European Budget Deficits
New Zealand’s NZX 50 Index decreased 1.5 percent, the most since May, after home-building approvals slumped to a 13-month low and business confidence fell.
Futures on the Standard & Poor’s 500 Index slipped 0.1 percent. The index retreated 0.3 percent yesterday in New York, trimming its best September rally since 1939. U.S. banks followed European lenders lower on concern the region’s most- indebted nations will struggle to finance budget deficits.
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Mozambique vies for Australia's coking coal muscle
MOZAMBIQE hopes to challenge the dominance of Australia's coal basins in satisfying the Asia-led demand for coal used in steel production.
October 1 (The Australian) The country's government is trying to revitalise the southern African nation's coal industry -- which dates back to the 1920s but fell into disrepair during a civil war that ended in the early 1990s -- and expects that eight new mines will be operating within the next three to six years as projects move into production.
Deputy Minister for Minerals Resources Abdul Razak Noormahomed says two companies will start operations in the second half of 2011, with an additional six mines to begin production over the next three to six years.
He was speaking at the Coaltrans conference in Mozambique's capital, Maputo, hosting hundreds of mining and industry executives from companies including POSCO Australia, Anglo American and Rio Tinto Energy.
Projects are focused on the northwestern province of Tete, where Brazilian giant Vale expects to spend $1.7 billion to develop its Moatize coalmine, slated to start operations from July next year. Australian-listed Riversdale is expecting to have finished construction on the first stage of its Benga coalmine joint venture with India's Tata Steel next year.
Both companies are advancing plans for further expansion in the region, while Ncondezi is developing coal exploration licences in the area. Nippon Steel, Jindal, CAMEC (ENRC) and ETAStar all hold land.
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Mallyon talks down the threat posed to Mozambique's position by Mongolia, which is also emerging as a supplier to nearby China.
"We looked at Mongolia this year -- we conducted our own review of half a dozen projects," Mallyon says from the side of the conference in Maputo.
"We certainly see it as an exciting place. What we don't see is hard coking coal . . . We also think it's not an impact on the seaborne coking coal trade for quite some time."
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Gold bull or bubble: Part 2
September 30 (Financial Post op-ed) The discovery of massive more amounts of gold at Oyu Tolgoi in Mongolia by Ivanhoe Mines would have dampened gold prices in the past. Instead of concern about excessive supply, Ivanhoe shares shot up 6%.
The gold bull market — or bubble — is the biggest news these days and my theory is that its ascent is because it has become an asset class for the confused.
But here’s another factoid affecting prices: A year ago, the Chinese ban on owning gold was lifted and recent reports are that the number of modest “gold accumulation” accounts offered by its largest bank, ICBC, have grown from zero to three million. Then there’s the noise surrounding the US mid-terms which are scaring consumers.
This week a recent report, titled “Attention Deficit Disorder” by gold analyst John Ing of Maison Placements Canada, lays the blame squarely on the shoulders of the ADD-afflicted Obama regime south of the border. To wit, the unnecessary printing of dollars by the “serial bailout artist” Obama is propelling gold prices upward as is the Fed by printing the stuff to buy its own treasury debt.
“The [US] economy is not even suffering from a shortage of liquidity, but a shortage of confidence. Part of the reason is that the looming red ink and liquidity is unlike anything seen in US peacetime history. Banks today have plenty of reserves, but they are hoarding rather than lending. US corporations have repaired their balance sheets but are sitting with trillions of cash. Consumers are paying down their debts and savings are increasing. And nobody wants to borrow or use money despite zero interest rates,” he writes.
But he raises another spectre which is worrisome if it comes about: The price of food.
“Commodities are a leading indicator of inflation. We believe that much of the excess global liquidity flowed into oil last year and then currency markets early this year and now agricultural,” he wrote. “Today, cattle futures have soared to their highest levels in nearly two years. Cocoa prices have soared, with hedge funds becoming big buyers. Coffee and sugar prices spiked to fresh highs. Global meat prices have hit a 20 year high. Unlike financial markets which are closely regulated, the commodity markets are mostly unregulated, affected more by liquidity. It is our view that inflation has worked itself into the commodity markets raising the price of food which will reduce spending power and savings. Inflation is a dynamic animal, and this time bomb is ready to explode. Gold will be a good thing to have.”
Don Coxe, a Chicago money manager, agrees that investors should be “overweight commodity stocks” within their equity portfolios and commodity portfolios should be mostly gold and, secondarily, agriculture.
Barrick Gold Corporation’s CEO Aaron Regent raises the possibility of continuing price hikes due to “peak gold,” or looming scarcity, Mongolia aside.
One thing is certain, however, and that’s the fact that what goes up will come down.
Misc
Hamden governance wows Mongolian lawmakers (video)
September 29 (New Haven Register) HAMDEN — Town officials Tuesday wowed a group of legislators from Mongolia on the importance of citizen participation and transparency in government.
From a meeting with Mayor Scott D. Jackson on the importance of prioritizing the needs of residents and letting them know they’ve been heard, to the procedures used to assess property and levy and collect taxes, the group from Mongolia was impressed with the visit to Hamden Government Center.
So says Oyungerel Tsedevdamba, who is interpreter for a group of council representatives from Khan Uul, a district in the Mongolian capital city of Ulan Bator.
“The whole transparency of the process of registering, assessing and taxing properties, they are impressed about that. It’s a completely new thing,” Tsedevdamba said at the end of the Mongolians’ first tour of Hamden Government Center.
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In Mongolia, all taxes are collected by the central government. The district council representatives, who are members of the Democratic party, are interested in starting a system whereby real estate taxes are collected locally so revenue can support local projects.
“We are a very young democracy. Cities collect personal income and business income taxes, but real estate taxes are not collected by the local government, or anybody. No one knows who owns what building. This is why we are so excited,” Tsedevdamba said.
The local legislators want to influence others in government so there can be local independence and the right to collect real estate taxes, she said.
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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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