Tuesday, October 5, 2010

[cpsnewswire] [CPS NewsWire, Tuesday, October 5, 2010]

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 or +976-99996779.

Link to MMC website

Mongolian Mining raises $650 mln in HK IPO –sources (Update 1)

* Mongolian Mining prices HK IPO at HK$7.02 each-sources
* Company valued at 12.6 times estimated 2011 earnings (Adds details and background)
HONG KONG, Oct 5 (Reuters) - Mongolian Mining Corp, Mongolia's largest privately-held domestic producer and exporter of coking coal, raised $650 million by pricing its Hong Kong initial public offering at the middle of an indicative range, sources familiar with the deal said.
Mongolian Mining , whose Ukhaa Ukudag (UHG) mine is roughly 245 km from Mongolia's border with China, sold 719 million shares at HK$7.02 each, the middle of the range of HK$6.48 to HK$7.56 each, two sources said.
The sources were directly involved with the deal but not authorised to speak publicly on the matter.
Hong Kong's Hang Seng Index .HSI has gained 11 percent in the third quarter, with more than 20 companies tapping the market to raise funds in these two months, including American International Assurance's (AIA) $15 billion Hong Kong IPO.
At the offering price range, Mongolian Mining is valued at 12.6 times forecast 2011 earnings estimated by bookrunners.
By comparison, Hidili Industry (1393.HK) trades at 12.4 times forecast 2011 earnings, while Fushan International Energy Group (0639.HK) trades at 14.4 times, according to Thomson Reuters data.
Citigroup (C.N) and JP Morgan (JPM.N) are joint global co-ordinators and joint bookrunners for the IPO. Both banks declined to comment to Reuters on the pricing.
Mongolian Mining generated orders for more than 10 times the shares initially on offer to Hong Kong retail investors, one of the sources said, adding that Henderson Land (0012.HK) Chairman Lee Shau-kee and GIC also invested to the stock.
Mongolian Mining, partly owned by Mongolia's largest private conglomerate MCS Holding and Kerry Group, started mining at UHG deposit in April 2009.
The company produced 1.8 million tonnes of coking coal by the end of 2009 and plans to produce about 3.8 million tonnes of coking coal in 2010 and increase its coal production to about 14.7 million tonnes for 2013.
Mongolia Mining has engaged Sedgman to build a coal handling and washing plant in order to recover the margins linked with coal washing, currently being conducted by third parties.
Mongolian Mining's trading debut is set for Oct. 13, under the symbol "975" 0975.HK. (US$1=HK$7.76) 

Related articles:
Mongolian Mining Prices Hong Kong IPO At HK$7.02 A Share; Middle Of Range – Source
HONG KONG -(Dow Jones)- Mongolian Mining Corp., a coking-coal producer formerly known as Energy Resources (Mogi: not formely known but formed in the Cayman Islands as the parent company of Energy Resources LLC, the locally incorporated owner of UHG Mine), has raised about US$650 million from its Hong Kong initial public offering after pricing its shares at HK$7.02 each, in the middle of a revised price range, a person familiar with the deal said Tuesday.
SouthGobi Energy Resources Ltd., the largest coal producer in Mongolia in terms of export sales, raised $436.3 million from its Hong Kong IPO, but its headquarters are in Canada.

Mongolian Mining Said to Raise $651 Million in IPO 
Oct. 5 (Bloomberg) -- Mongolian Mining Corp., the country’s biggest closely held coking coal producer, raised HK$5.05 billion ($651 million) in a Hong Kong initial public offering, according to a person with knowledge of the matter.
IPO Proceeds
Of the IPO proceeds, about 50 percent will be used to improve transport links and infrastructure, while 40 percent will go toward acquisitions, the prospectus said.

Voyager Resources Hits Historical High
October 5 (Mogi) Voyager Resources (ASX:HUN) hit an intraday high of 4.3c or 43.3% higher than previous close, a historical high since backdoor listing last year, prompting a “Please Expain” from ASX. Voyager’s responded by saying they were not aware of information that could’ve caused this. This is the 2nd time in 2 weeks Voyager was asked to explain prices hikes.
The following entry was posted on CPS NewsWire’s September 28 issue related to this:
Voyager Resources Share And Volume Spike Prompts ASX Please Explain
September 28 (Proactive Investors Australia) Voyager Resources (ASX: VOR) shares hit an intra-day high today of $0.023, up from $0.018 yesterday prompting an ASX 'please explain' if any material information has not been released to the market.
Voyager said it is not aware of any information to increase investor interest in the stock.
Of interest though, the company does mention a positive media report in The Australian newspaper of company's exploring in Mongolia, of which Voyager is one.
Voyager was the third most actively traded stock on the ASX today, with 82 million shares trading hands.
(CPS Securities was Lead Manager and Underwriter in Voyager’s past fundraisings. VOR shares closed 0.3c higher or 16.67% today at A$0.021c. VOR actually went on to hit an intra-day high of 2.4c today. VOR up 50% from last week. Link to VOR share chart)
VOR closed the day at 3.6c. 92.7 million shares traded hands worth A$3.56 million.

China, Mongolia Plan to Jointly Build New Highway for Coal Transportation
October 5 (Xinhua) A new highway linking China and Mongolia is expected to be jointly built by the two countries with a total investment of 2.51 billion yuan (around 375 million U.S. dollars), local authorities said Tuesday.
The new highway is planned to be 245 kilometers in length and will run from Mongolia's southwest Omnogovi Aymag Province to Ganqimaodu, a border town in China's Inner Mongolia Autonomous Region, said a regional government official. 
Two firms from China and Mongolia plan to set up a joint venture, which will be the main builder of the highway. The Mongolia firm will own 51 percent of the joint venture while the China firm the remaining 49 percent. 
Construction of the highway is scheduled to be completed in two years
The project plan had been submitted to the authorities of the two countries respectively, the official said. 
The new highway was expected to improve coal transportation between the two countries, as well as promote economic development in China and Mongolia, the official said.
Trade between China's Inner Mongolia Autonomous Region and Mongolia reached 5.33 billion U.S. dollars and jumped 33.5 percent year on year over the first eight months of this year. As of Sept. 22, around 5.24 million tonnes of coal had been transported to China via Ganqimaodu.

Chief of the State Property Committee on his way out?
October 5 ( There are strong rumors the present head of the State Property Management and Privatization Board in the State Property Committee (SPC), Kh. Kherlen, would soon replace D. Sugar as SPC chief. A decision will be taken only after the Prime Minister returns from his foreign visit, but the talk is that Sugar has realized his days are numbered and is trying to prepare the ground for T. Ganbold, once the Chief of the Black Metal Factory in Darkhan, to succeed him. However, the appointment is always political and the Secretary-General of the MPRP, U. Khurelsukh, strongly favors Kherlen.
No formal charges have been laid out against Sugar who has said, “Nobody can dismiss me.” He is an experienced state official and lawyer, a former MP and also worked as State Secretary of the Ministry of Justice. But not all his actions as Chief of the SPC were taken to be above board. These include the way the SPC under him decided to sell to the Burkheest Khairkhan company the 131-km railway that transported uranium from Dornod Mardai to Russia, and the way he allowed O. Erdene, Director of Mongolrostsevetmet, to give the  Asgat silver mine, worth USD8 billion, to Polimetall of Russia. The Asgat contract was canceled by M. Enkhbold who was Prime Minister then. Sugar has always maintained that he had nothing to do with the agreement. Sugar also once declared his annual income to the Anti- Corruption Authority (ACA) as MNT6 million. The media disputed this but Sugar did not accept the charge.
The recent issue of selection of an organization for restructuring the MSE cannot be very important as it is believed that despite their differences, the Prime Minister and Sugar share an agreeable relationship. (Mogi: Actually, Sugar recently gave an interview saying MSE tender was cancelled, right after the PM was quoted as saying that London Stock Exchange was frontrunner for the management bid)
The main reason why Sugar has fallen out of favor may be his way of working and his perceived inability to adapt himself to the changing times. Maybe the MPRP wants its own man in the job when important appointments are to be made soon, like that of the executive management team for the Development Bank, which will arrange for disbursement of over MNT100 billion.

Prophecy Appoints Derek Liu as Chief Financial Officer
VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 4, 2010) - Prophecy Resource Corp. ("Prophecy" or the "Company") (TSX VENTURE:PCY)(OTCQX:PRPCF)(FRANKFURT:1P2) is pleased to appoint Mr. Derek Liu to the position of Chief Financial Officer (CFO) to Prophecy Resource Corp. Mr. Liu is an accountant professional with over 15 years of diverse international experiences in financial reporting, auditing, and accounting.
Most recently, he was the controller of Silvercorp Metals Inc., a position he held since 2006.
Mr. Liu will be replacing Mr. Mark Lotz who will be leaving Prophecy to pursue other opportunities. Mr. Lotz will remain during the transition process. Prophecy's Board of Directors wishes to thank Mr. Lotz for his service to the Company.
Mr. Liu will be granted 250,000 options at 54 cents with a 2 year vesting.

Russia’s Renova buys out Berkley’s, Buzuk’s stakes in joint projs, has uranium stakes in Mongolia
MOSCOW, Oct 5 (PRIME-TASS) -- Russian multi industry holding Renova Group has bought stakes in mining and metallurgy companies that were controlled by Renova jointly with Berkley Investment Ltd Partnership and companies affiliated with Mark Buzuk, head of Swiss company Investment Partner AG, Renova said in a statement Tuesday.
In particular, Renova acquired stakes in Russian gold producer Zoloto Kamchatki; Kyrgyzstan’s Karabaltinsky Mining and Processing Plant; South Africa’s manganese miner United Manganese of Kalahari; ferroalloys plant Transalloys in South Africa, and in companies operating uranium assets in Namibia and Mongolia.
No other information was provided.
Renova Group has interests in the oil, metals, chemicals, mining, machine building, electric power, construction, public utilities, telecommunications, and finance sectors.

Exchange Rates
Mongol Bank FX Site

Close: Mongolia Related ASX Listed Companies, October 5, 2010
 0.855  Down
VOR  *
 0.036  Up
 0.210  Down
 0.160  No change
 0.165  Down
LEI  * *
 34.240  Up
 77.000  Down
 39.500  Down
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.
Shares cut losses on rates reprieve
October 5 (AAP) Close, Australian stocks recovered from early lows to close 0.4 per cent lower as the RBA’s unexpected decision to hold official rates steady lifted shares out of their hole.
The benchmark S&P/ASX200 index fell 18.4 points, or 0.4 per cent, to 4606.9, while the broader All Ordinaries index lost 17.8 points, or 0.4 per cent, to 4660.6.
Among the sectors, materials and energy were down 0.9 per cent, while financials were trading fell 0.4 per cent.
- The dollar slides below 96 US cents
- The Nikkei climbs 1.5% after surprise rates cut
- Gold extends losses to $US1314
- Oil slips towards $US81
- Dow futures are 10 points up at 10,717
The dollar slipped more than half a US cent, bonds firmed up and equities recovered.
A surprise move by the Bank of Japan to revert to a zero interest rate buoyed the Tokyo stockmarket, with the Nikkei jumping 1.5 per cent.
Cameron Securities client adviser Adrian Leppinus said the interest-rate sensitive sectors of the economy welcomed some interest rate relief.
‘‘The economy can be sort of split in two at the moment - you’ve got the strong resources sector which is really helping the Australian economy, but on the other side of things interest rates are starting to bite,’’ Mr Leppinus said. ‘‘You are seeing with the latest data that the housing price growth that we saw in the first half of this year has slowed and it is starting to have an effect.’’
BHP Billiton finished down 50 cents, or 1.3 per cent, at $39.50, while rival Rio Tinto ended off $1.08, or 1.4 per cent, at $77.00.
The most traded stock by volume was Alcyone Resources, with 197 million securities changing hands for $10.17 million. Alcyone finished up four-tenths of a cent, or 9.52 per cent, at 4.6 cents, after the company reported drilling results from its Mt Gunyan silver deposit.
Preliminary market turnover was 2.52 billion securities worth $4.46 billion, with 442 stocks up, 655 down and 325 unchanged.

Strong exports deliver 'healthy' trade surplus
October 5 (AAP) Strong coal and iron ore exports contributed to a ‘‘healthy’’ $2.3 billion trade surplus in August despite falls in overall exports and imports, economists say.
They believe the export outlook remains strong even though commodity prices are beginning to plateau.
International trade data released today shows exports were down 2.0 per cent in August in adjusted terms, compared with the previous month, while imports fell 5.0 per cent.
Australia had a $2.3 billion trade surplus in the month, matching economists’ expectations, the data released by the Australian Bureau of Statistics showed.
The economists said the trade data was unlikely to have swayed the RBA’s decision to leave the cash rate unchanged at its October board meeting today.
The majority of economists and analysts had expected the central bank to lift the cash rate to 4.75 per cent from its current 4.5 per cent.


Asian Stocks Rise, Reversing Drop After Bank of Japan Cuts Rate

Oct. 5 (Bloomberg) -- Asian stocks rose, reversing declines in the MSCI Asia Pacific Index after Japan cut its benchmark interest rate and Australia unexpectedly kept its key rate unchanged for the fifth straight month.
Mitsubishi UFJ Financial Group Inc., Japan’s largest publicly traded bank, climbed 2.4 percent in Tokyo, overturning a 1.1 percent drop after the Bank of Japan pledged to keep rates at “virtually zero” and to expand bond purchases. Commonwealth Bank of Australia and other lenders pared losses in Sydney, while BHP Billiton Ltd., the world’s biggest mining company, lost 1.3 percent as oil and metal prices slid.
The MSCI Asia Pacific Index rose 0.2 percent to 127.48 as of 8:15 p.m. in Tokyo, with more than five stocks advancing for every four that declined. The gauge dropped 0.9 percent before the rate decisions. The index has climbed 17 percent from its low this year on May 25 amid signs a U.S. economic recovery is stabilizing and will support global growth.
Japan’s Nikkei 225 Stock Average jumped 1.5 percent, reversing a slump of 0.5 percent for the biggest move among equity benchmarks in the Asia-Pacific region. Australia’s S&P/ASX 200 Index retreated 0.4 percent, paring a drop of 1.4 percent after the Reserve Bank of Australia announcement.
Hong Kong, U.S.
Hong Kong’s Hang Seng Index gained 0.1 percent as a 6.9 percent climb by China Life Insurance Co. countered declines by property developers. Taiwan’s Taiex index dropped 0.6 percent. Mainland China’s markets were closed for a holiday.
Futures on the Standard & Poor’s 500 Index increased 0.3 percent. The index lost 0.8 percent in New York yesterday after Goldman Sachs Group Inc. cut its ratings on Microsoft Corp., J.C. Penney Co. and Macy’s Inc. Deutsche Bank AG put Alcoa Inc. on its short-term “sell” list before the largest U.S. aluminum company starts the third-quarter earnings season on Oct. 7.

European Stocks Advance; Greek Banks, TUI Travel Shares Climb

Oct. 5 (Bloomberg) -- European stocks rose, snapping six days of losses for the Stoxx Europe 600 Index, as Moody’s Investor Service said it’s impressed with Greece’s efforts to reform its finances. U.S. futures and Asian shares gained.
EFG Eurobank Ergasias SA, Greece’ second-largest lender, surged 3.6 percent to the highest level in more than two weeks. TUI Travel Plc jumped 5.1 percent after saying results will reach its yearly forecasts. E.ON AG dropped 2.3 percent as HSBC Holdings Plc and Banco Santander SA cut their recommendations on Germany’s largest utility.
The Stoxx Europe 600 Index rose 0.4 percent to 258.66 at 1:14 p.m. in London, ending the longest stretch of declines since January 2009, as more than two shares rose for every one that fell. The gauge has rallied 11 percent since its low this year in May as investors speculated that the global economy will avoid another recession. Still, concern that peripheral euro- area countries will struggle to repay their debt has left the gauge 5.1 percent below its April high for 2010.
Overall the environment isn’t too bad for risky assets,” said Markus Steinbeis, head of equity portfolio management at the Unterfoehring, Germany-based unit of Pioneer Investments KGmbH, which oversees about $221 billion globally. “We can expect another good earnings quarter with no major disappointments. It’s not surprising to see some consolidation but the market will rise after a short period of weakness.”
U.S., Asian Shares
Futures on the Standard & Poor’s 500 Index expiring in December rose 0.5 percent today. The MSCI Asia Pacific Index gained 0.2 percent as Japan cut its benchmark interest rate and Australia unexpectedly kept rates unchanged for a fifth month. Japan’s central bank also said it will create a 5 trillion yen ($60 billion) fund to buy government bonds and other assets to support the economy.

Mongolia GDP Per Cap Set to Rise Faster than China’s
Oct. 5 (– With a huge upsurge in M&A deals and investments in Mongolia’s resource rich mining sector, Mongolians are about to get a lot more money filtering down into their pockets.
In a country the size of the entire land mass of Western Europe, but with a population of just 3 million, Mongolians are set for a bonanza as money pours into the country. Over just the past 12 months, Mongolia has become an attractive investment destination for companies listed on the Hong Kong Stock Exchange. Several such companies have acquired resource assets in Mongolia worth US$966 million in M&A deals. All recent Mongolia M&A deals in which Hong Kong companies were involved were completed through injection of resource assets into the existing publicly listed companies in Ulaanbaatar. Per capita income for Mongolians is expected to rise to US$5,000 within the next two years and to a staggering US$12,000 by 2015. To put that into perspective, that’s about what the average Shanghainese earns now.
South Gobi, a major mining business with significant Mongolian assets, has already been listed in Canada and attracted a further US$300 million in its recent IPO. As investors clamber all over themselves to get into the Mongolian market, consumer patterns are already changing. Louis Vuitton, Chanel, Salvatore Ferragamo and Cartier have already opened stores in the flagship Central Tower on Sukhbataar Square (Mogi: Actually, of these 4 brands, Louis Vuitton is the 1 only with a shop in Central Tower. The big brands that are here are, besides LV, Emporio Armani, Ermenegildo Zegna, Burberry, Boss, Mont Blanc and others like Shiseido, L’Occitane, Swarovski, Esprit), Mongolia’s equivalent of Moscow’s Red Square or Beijing’s Tiananmen Square. With China already the world’s largest consumer of coal, Mongolia’s massive reserves are finding a ready market. On top of that, Mongolia has significant deposits of gold, copper, molybdenum, tungsten, nickel, zinc, wolfram, fluorspar, tin, silver, various minerals and rare earths. In what is rapidly becoming a darling amongst the Asian Tigers of Opportunity, Mongolia may well be worth considering if businesses are involved in the mining sector or wish to sell consumables to its newly wealthy.
Another industry where Mongolia is starting to develop is solar energy. The sunniest country in the world, it is not uncommon for modern nomads to power their gers with solar panels on the roof and thus enjoy evening TV, video and free energy satellite communications. Ulaanbaatar is a one and a half hour flight directly north from Beijing, making it closer to China’s capital than Shanghai. While China slows, Mongolian GDP and domestic consumption is about to skyrocket, and although a relatively small market, foreign investors capable of dealing with emerging plays would do well to investigate.
Dezan Shira & Associates are able to provide introductions and informational advice about the Mongolian market. The firm’s principal, Chris Devonshire-Ellis, sits on the Business Advisory Council for the regional United Nations Development Program. Please e-mail for assistance.

4 gains, 1 drop
Mogi & Friends Fund is a tiny fund of $6,000 I created with a few friends to put my own (and few friends’) money where my mouth (just mine) is.
Mogi: Well, it can’t look good on paper everyday right? More so for small cap, highly speculative stocks. These things tend to go crazy on just one good release and this is when you take your profit. But when all is quiet, a few thousand bucks can hurt your portfolio, or even just a few bucks. But you have to remember, you only lose money IF you sell it at a lower price. If you still keep faith and hold on to it, chances are still there you might get rewarded for your patience, veeeeery handsomely.
My stock went down a few cents today, but still higher than what I bought, so don’t call me loser just yet. I intend to get well paid for my patience.
If you look at a historical chart of any index, you’ll see exactly this, goes up 10, goes down 5, goes up 10, goes down 5. Well, you can’t compare a drop in my stock to a global recession, but you get my point.

"Mogi" Munkhdul Badral
Executive Director
CPS International

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 or +976-99996779.

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