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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Close: Mongolia Related ASX Listed Companies, May 24, 2011 | ||||
Code | Last | $ +/- | Bid | Offer |
0.048 | -0.001 | 0.047 | 0.048 | |
1.465 | -0.025 | 1.465 | 1.475 | |
0.300 | 0.000 | 0.285 | 0.295 | |
0.680 | -0.015 | 0.670 | 0.680 | |
0.013 | 0.000 | 0.013 | 0.014 | |
0.005 | -0.001 | 0.005 | 0.006 | |
0.050 | -0.003 | 0.050 | 0.052 | |
0.180 | 0.000 | 0.165 | 0.180 | |
1.180 | -0.050 | 1.170 | 1.180 | |
0.265 | +0.015 | 0.255 | 0.265 | |
0.500 | 0.000 | 0.450 | 0.500 | |
0.440 | -0.015 | 0.440 | 0.445 | |
23.580 | -0.180 | 23.550 | 23.760 | |
79.010 | +0.020 | 79.000 | 79.030 | |
43.240 | -0.050 | 43.240 | 43.350 | |
Source: asx.com.au
C @ Limited kicks off exploration on coal licences in Mongolia
May 24 (Proactive Investors) Perth-based C @ Limited (ASX:CEO) has commenced an interesting exploration program on the Mongolian coal licenses it currently has under an option agreement, and has mobilised a rig to commence drilling in South Gobi province.
The option agreement, announced 20 April 2011, has a 10 week due diligence period which commenced on 6 May 2011.
The company said it has made significant progress on its due diligence, which has been extended to include the exploration program.
The exploration program will gain a greater level of understanding of the licenses prospectivity, along with validating due diligence material provided by the licence holder.
C @ Limited and its local partner Trinity Mongolia Pty Ltd have reviewed the data room information on the eight licenses since signing the agreement providing confidence to move ahead on exploration.
The mining authority and local government applications for the exploration work have been approved.
The exploration program will include up to 5,900 metres of diamond core drilling and up to 1,200 metres of trenching on both the South Gobi and Ovorhangay province licences. A reputable drilling contractor has been appointed.
The company will undertake geophysical logging on all drill holes and coal sampling from the exploration program will be transported to the SGS laboratory in Ulaanbaatar for quality testing.
C @ Limited expects the drilling program to be complete within five weeks with an additional two weeks for completion of any remaining coal samples for quality testing.
Due diligence work also includes a legal review of the licenses which is expected to be complete shortly.
On April 20 C @ Limited shares spiked 60% after entering into the option to acquire the eight prospective coal licenses in Mongolia.
The company also entered into an agreement with PT Ethica Trada Cermelang (Ethica) on April 28 to secure in-country representation in Indonesia to acquire and develop high quality coal assets.
C @ Limited is currently engaged in supplying wholesale optical frames and lenses to opticians. During 2010 it announced that it would search for opportunities in the coal resources sector.
C @ Limited last traded at $0.051 per share.
Investment Industry Regulatory Organization of Canada - Trade Resumption - Garrison International Ltd. - GAU
May 24, 2011 (Canada NewsWire Group) -- VANCOUVER, May 24, 2011 /CNW/ - Trading resumes in:
Issuer Name: Garrison International Ltd.
TSX-V Ticker Symbol: GAU
Resumption Time: 9:30 am EST
Mongolia Growth Group Ltd. Announces Private Placement Offering
Calgary, Alberta CANADA, May 24, 2011 /FSC/ - Mongolia Growth Group Ltd. (YAK - CNSX),("MGG" or "the Company") is pleased to announce a non-brokered "commercially reasonable efforts" private placement offering ("Offering") of units ("Units") to raise gross proceeds of up to CDN$ 20 million with a CDN$ 15 million overallotment for aggregate proceeds of up to CDN$ 35 million. Each Unit will be priced at CDN$ 4.00 and consist of one common share ("Common Share") of the Company and one-half of one Common Share purchase warrant ("Warrant"), where each whole Warrant is exercisable at CDN$ 5.25 to purchase one Common Share for a term of 24 months from the closing date. In the event that the Common Shares trade at a volume weighted average price of CDN$ 7.00 for a period of at least ten (10) consecutive trading days following the closing of the Offering, the Company may within five (5) days after such an event, provide notice to the Warrant holders of early expiry and thereafter, the Warrants will expire on the date which is thirty (30) days after the date of the notice to the Warrant holders.
Harris Kupperman, Chairman and CEO of The Company has indicated his intention to subscribe for CDN$ 500,000 or 125,000 Units. A member of the board has also indicated his intention to subscribe for a similar number of Units in the Offering, which will be set-out in a material change report filed on SEDAR once known.
A director and an officer of The Company will acquire Shares under the private placement. Any such participation would be considered to be a "related party transaction" as defined under Multilateral Instrument 61-101 ("MI 61-101"). The transaction will be exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 as neither the fair market value of any shares issued to nor the consideration paid by such persons will exceed 25% of the Company's market capitalization.
The Company intends to use the proceeds to purchase leasable real estate, take advantage of investment opportunities and general corporate purposes.
The Offering is scheduled to close on or about June 10, 2011 (the "Closing Date"), and is subject to certain conditions, including but not limited to, receipt of all necessary approvals including the approval of the CNSX Exchange and the securities regulatory authorities.
The Common Shares and the Warrants issued in connection with this Offering will be subject to a four-month hold period from the Closing Date, as prescribed by the CNSX exchange and applicable securities laws.
Another ETF First: A Mongolia-Specific Fund
May 24 (International Business Times) With ETF issuers rushing to meet surging investor demand for emerging and frontier markets ETFs over the past few years, it could be argued that issuers are running out of countries to create new funds for.
Van Eck, parent company of Market Vectors and the sixth-largest U.S. ETF issuer, apparently thinks otherwise and has filed plans to introduce to the Market Vectors Mongolia ETF. If the fund comes to market, it would be the first ETF devoted exclusively to the resource-rich country that shares borders with China and Russia.
Currently, no ETFs offer exposure to Mongolia. Van Eck's filing did not mention a ticker or expense ratio for the new fund, but, not surprisingly, the filing did say the ETF will be heavy on energy, industrials and materials names.
The new ETF will hold at least 80% of its assets in Mongolia-based firms or companies based outside the Asian country that get at least half their revenue from Mongolia.
Mongolia is home to vast coal, copper, nickel, tin and zinc deposits and also possesses some oil, gold and silver reserves. Oddly enough, Mongolia does not appear on the FTSE or MSCI Barra lists of countries with the frontier markets designation.
Van Eck, which issues 34 ETFs under the Market Vectors label, had $23 billion in ETF assets under management at the end of April. The firm has been first to market with ETFs tracking emerging and frontier markets such as Egypt, Indonesia, Poland, Russia and Vietnam. Market Vectors was also the first ETF issuer to offer small-cap exposure to Brazil and Russia.
The firm also features ETFs that offer exposure to Africa, China, Latin America and the Middle East along with the Market Vectors Colombia ETF (NYSE: COLX) and the Market Vectors India Small-Cap Index ETF (NYSE: SCIF).
Related: Van Eck Plans Mongolia ETF – ETFdb, May 24
Guildford: Appointment of Non-Executive Chairman
May 24 --
The Board of Guildford Coal Limited (ASX:GUF) is pleased to announce the appointment of Mr Craig Ransley to the position of Non-Executive Chairman.
Mr Ransley previously held the position of Non-Executive Deputy Chairman and his change of role reflects recent rapid progress in advancing the Company’s strategy of fast tracking potential project developments from its expansive coal portfolio.
Guildford is currently conducting coal mineral resource drill-outs on the Hughenden Project in Queensland and the South Gobi Project in Mongolia.
Mr Ransley was the founder of the Company and instrumental in its subsequent ASX Listing.
The current Non-Executive Chairman, Mr Tony Bellas will assume the Non-Executive Deputy Chairman role.
…
OSCE-Mongolia Conference co-operation with Asian Partners
The FINANCIAL -- ULAANBAATAR, 23 May 2011 – Strengthening synergies between the 56 participating States of the OSCE and its Asian Partners for Co-operation in addressing transnational threats, such as illicit drug trafficking. Advancing international economic co-operation, in particular on transport and energy security; as well as promoting human rights and fundamental freedoms in the whole OSCE area, are key topics of the OSCE-Mongolia Conference that started in Ulaanbaatar today.
The two-day meeting organized jointly by the OSCE and the Mongolian Ministry of Foreign Affairs and Trade, looks at how six Asian Partners for Co-operation – Afghanistan, Australia, Japan, Mongolia, Republic of Korea, and Thailand – can further benefit from the engagement with the OSCE.
Addressing the Conference participants, Mongolian Minister of Foreign Affairs and Trade Gombojav Zandanshatar said: “The OSCE security activities across all three dimensions – the politico-military, the economic and environmental and the human – could serve as examples for security co-operation in Northeast Asia. OSCE’s unique features, including its co-operative and comprehensive approach to security, conflict prevention instruments, well-established confidence and security-building measures, large operational network of field missions, are valuable assets to be drawn on in terms of practical application in Northeast Asia”.
He stressed the importance of enhancing transit co-operation – one of the topics on the Conference’s agenda, and called on OSCE participating States and Partners to increase financial and technical assistance to landlocked developing countries to “help them overcome the impediments of geography by improving their transit transport systems”.
…
Mogi: “Trump Tower Ulan Bator”. 4.1
Rents, Home Sales Rebounding in Mongolia
The world’s newest housing price index is trending up in 2011 thanks to rising foreign demand and increased rental returns. Home buying costs and the development of vast mining interests in Mongolia are spurring growth despite high rental and capital gains taxes for non-residents and a countrywide imbalance of wealth. Mining in Mongolia has generated substantial economic expansion in the democratic nation and is responsible for 60% of total foreign direct investment. For more on this continue reading the following article from Global Property Guide.
Ulan Bator’s housing index is up! The world’s newest house price index rose 4.46% y-o-y to Q1 2011, though when adjusted for inflation house prices were 3.36% down y-o-y. But in the first quarter of 2011 the index rose by 1.6%, the third quarterly rise since late 2008, when house prices began to fall due to the commodity crisis.
The index, which covers six districts of Ulan Bator, the capital, was first published in the fourth quarter of 2008 by the National Statistics Office of Mongolia.
In the first quarter of 2011 the “average band” of Ulan Bator house prices ranged from MNT850,000 (US$702) per square meter (sq. m.), to MNT1.48 million (US$1,223) per sq. m..
However, luxury apartment prices range from MNT2 million (US$1,653) per sq. m. to MNT10 million (US$8,264) per sq. m.
As the economy returns to double-digit growth, the property market is expected to continue recovering in 2011 and 2012.
Local house price variations
In the prestigious 105m Blue Sky Tower, currently the tallest building in Mongolia, located in the pulsating heart of Ulan Bator, apartments are offered at over MNT9.7 million (US$8,016) per square metre. These are some of the most expensive apartments in the country.
More typical is the Temple View Residence, developed by Mongolian Properties, condominium units are priced at about MNT2.9 million (US$2,400) per sq.m. Prices range from MNT227.48 million (US$188,000) for two-bedroom units, to MNT313.78 million (US$259,322) for three-bedroom units. The building is in the heart of the city, near the Choijin Lama Temple.
At the Royal Green Villa, in Ulan Bator’s posh Zaisan neighborhood, premium apartments sell for not more than MNT484 million (US$400,000).
Prices of luxury apartments at the Olympic Residence, an 18-storey mixed-use development , start at MNT2.78 million (US$2,300) per sq. m.. That is around MNT242 million (US$200,000) per apartment.
Ulan Bator’s most desirable residential buildings/compounds include The Brauhaus, the Temple Residence, The Jiguur Grand Office Building, The Star Apartments, The Royal County , The Sarnaikh Building, Lux House, The Erel Building, The Russian Embassy Building, Regency Residence, and the Blue Sky Tower.
The “Embassy District” and the area around the State Department Store, also known as the 7 Courtyards, are two of the most popular residential areas for foreign homebuyers and tenants, as well as wealthy Mongolians.
Economic growth and the property market
Residential property prices soared in Mongolia over the last decade, boosted by strong economic growth, high copper prices, and large increases in gold production. There was an influx of mining organizations, and surging international trade with countries such as China. Expatriates, foreign diplomats, and executives moved into the city en masse. Ulan Bator became a boom town, four wheel drives proliferated, money was thrown about, and a great time was had. Louis Vuitton, Emporio Armani , Burberry and Hugo Boss are now established in Ulan Bator.
However, Mongolia’s heavy reliance on commodity prices as a catalyst for economic growth meant that the global crisis hit hard. The price of copper, the country’s single largest export, plunged by almost 65% from July 2008 to February 2009. In 2009 the economy contracted by 1.6%, after experiencing an average annual GDP growth rate of 8.8% from 2003 to 2008.
The Mongolian Tugrik (MNT) became unstable. Foreign investment dried up. Banks stopped lending. Construction projects screeched to a halt. Housing demand, especially from foreign expatriates, vanished, causing the residential property market to stagnate from H2 2008 to H1 2010.
In late-2009, the economy started to recover. Strong demand from China combined with an upswing in world copper prices contributed to a rapid reversal of fortunes. In 2010, the economy returned to growth, with a real GDP growth rate of 6.1%.
In the second half of 2010, the property market started to regain its momentum. Confidence from real estate developers and homebuyers is now slowly returning to the market, though real estate prices are still below pre-crisis levels.
With the passing of the long-awaited Oyu Tolgoi Investment Agreement to develop the Oyu Tolgoi mine, considered one of the world’s largest untapped copper deposits, the economy is expected to grow by 10.3% in 2011 and by 7.6% in 2012, according to the IMF .
Large-scale residential developments
Recently announced high-profile residential projects include:
· The launch of the Trump Tower Ulan Bator, in partnership with local partner Green Land Development, was announced in April 2011. This super luxury 120-storey building will be the country’s most expensive residential building, with apartment prices ranging from MNT4.8 billion (US$4,000,000), to MNT10.9 billion (US$9,000,000).
· The Edelweiss Residence, to be developed by Chuang’s Consortium International, will be a 2-tower luxury residential building planned near the city centre in the “embassy district”.
· Another Chuang’s Consortium International project is the Chinggis Avenue Tower, a mixed use building in the central business district on Chinggis Avenue, opposite the Monnis Tower and next to the Drama Theatre.
· In addition, the Mongolian government has allocated about MNT20 billion (US$17 million) to housing about 40,000 to 50,000 residents in a 10,000 apartment project in the 7th Khoroolol, Ulan Bator. The average apartment price is expected to be around MNT1.1 million (US$909) per sq. m.
Mortgage market and interest rates
Mongolia’s mortgage market is still underdeveloped and very small. Housing finance was introduced only in early-2000s.
Yet the pace is astonishing. In 2010, the size of the mortgage market was about 4% of GDP, up from just 1% of GDP in 2005. Outstanding mortgage loans rose in 2010 no less than 47.7% from the previous year to MNT333.8 billion (US$275.87 million), according to the National Statistics Office of Mongolia.
In May 2011, The Mongol Bank, the country’s central bank, decided to raise the policy rate by 50 basis points to 11.5%.
Mortgage interest rates are very high, at 15% to 20% per year. The loan-to-value (LTV) ratio is 70% of the appraised value of the property. The term period is usually over 20 years.
However, for local housing projects the government is proposing a mortgage interest rate of 6%, and to increase the LTV ratio to 90% of the property value (e.g. the Housing for 100,000 Households project).
Mongolia’s banking sector is highly concentrated, with four banks (XacBank, Khan Bank, Golomt Bank, and Trade and Development Bank) dominating the market.
High rental yields
Net rental yields are high in Ulan Bator, at around 9% to 18%, according to local real estate experts.
“Mongolia is a good investment, with rental yields of up to 18%,” says Jess Lampe of Olympic Residence. “The reason for the high returns is a basic supply and demand imbalance. Mongolia is on the verge of unprecedented growth, with the IMF predicting double-digit growth.”
In the first quarter of 2011, three-bedroom apartments at the Royal Green Villa rented for MNT4.2 million (US$3,471) per month. At the Temple View Residence, apartment rents start at MNT2.5 million (US$2,066) per month.
Fiscal policy fuels inflationary pressures
Overheating is a growing concern in Mongolia, due to the highly expansionary budget of 2011, which increased government’s spending by about 7% of GDP.
Mongol Bank’s claim that first quarter inflation was below 10%, made in a report of April 20, is raised eyebrows in Ulan Bator’s financial community. The IMF has warned that inflation is in fact increasing, and may reach 25% by end-2011.
Transition from communism
Mongolia’s transition to modernity began in 1989, with the withdrawal of Soviet troops, and glasnost in the Soviet Union. As in many East-European countries, protests led to the fall of the Communist government and the adoption of a democratic political system .
The first multi-party elections were held in 1990. During the early 1990s, the ex-Communist Mongolian People´s Revolutionary Party (MPRP) gradually yielded its monopoly on power to the Democratic Union Coalition (DUC), which defeated the MPRP in a national election in 1996.
Parliamentary elections returned the MPRP overwhelmingly to power in 2000 and produced a coalition government in 2004. The MPRP again won the last round of parliamentary elections, held in June 2008.
In January 1992, the Mongolian legislature adopted a new democratic Constitution, which came into force on 12 February 1992. The legislature arm of the Mongolian State is the State Great Hural or Parliament, a single chamber consisting of 76 members. It sets the dates for the election of the President and Parliament, confirms the President in office, removes the President from office and appoints, replaces or removes the Prime Minister. The parliament also has authority over ‘strategic minerals’ including oil, gas and uranium.
Inequality, poverty
Despite the explosion of riches at the upper levels of society, wealth is very unevenly distributed in Mongolia. The growth rate of 7.25% per capita over the past 5 years (IMF figures) has not been enough to cause a substantial ‘trickle down’.
A large proportion of the population lives in poverty, and extreme social inequality is generating tension. Recently, climate change has caused droughts and unusually cold and snowy winters, decimating livestock, destroying the livelihoods of hundreds of thousands of families.
Many former herders have moved to Ulan Bator, where they live in squalid conditions. There is a severe shortage of housing. More than 60% of Mongolia’s total population resides in “ger dwellings” (called yurt by many foreigners).
It is against this background that the new rich are showing off their wealth.
“This is a very similar phenomenon to what happened in Moscow in the late 1990´s,” says Baron Christopher de Gruben of MAD Corporate Services. “There’s a wealthy class of newly rich "entrepreneurs" with a need to display their new found wealth in as an ostentatious manner as possible.”
DHL Launches First Door-to-Door Service Linking Ulaanbaatar to Tianjin
Genghis Khan Connection offers thrice-weekly rail services along one of world’s most challenging trade routes
SINGAPORE, May 24, 2011 /PRNewswire-Asia/ – DHL, the world’s leading logistics company, celebrates five years of operations in fast-growing Mongolia with the launch of a new rail service — the Genghis Khan Connection, a scheduled tri-weekly cross border rail solution available during the high season from April to October linking Ulaanbaatar, Mongolia by rail to Tianjin, China and out to the rest of the world. DHL Global Forwarding is the only global logistics provider in Mongolia to offer scheduled services and reliable solutions to congested routes and complex customs processes.
The 30-day Genghis Khan Connection leverages Mongolia’s improving infrastructure to help customers avoid peak season congestion at regional border towns, seaports and airports which can sometimes substantially delay shipments. The service dovetails DHL Global Forwarding’s existing global network of connections to provide a new viable transport option for businesses particularly in consumer goods, fashion and accessories and equipment, machines and spare parts. Rail being a greener alternative to air and road options, the Genghis Khan Connection also helps reduce customers’ CO2 footprint.
Kelvin Leung, CEO, North Asia Pacific, DHL Global Forwarding, said: “Despite having vast economic potential, Mongolia has hitherto suffered from limited routing options that include Russia and China for cargo from Europe, America and Asia. This has led to unreliable delivery, seasonal congestion that can delay shipments by up to 21 days as well as result in higher costs.”
Mongolia enjoyed a GDP growth of close to 10% in 2010 (1) fuelled by the opening of new mining areas and its growth is expected to surge to as high as 23 percent in 2013 (2). The country is a fast-growing, raw materials provider with extensive natural resources including oil, coal, copper, gold, silver, iron and phosphate. Fastest-growing industries include mining (coal, copper, molybdenum, fluorspar, and gold), oil, construction materials, food and beverages and the processing of animal products into products like cashmere and woolen textiles. From China, Mongolia is also importing vast amounts of rare earth, a major component in automobile manufacturing and a key resource to the numerous high-tech companies setting up their manufacturing bases in Mongolia.
Ambrose Linn, Head of Road Freight & Multimodal, North Asia Pacific, DHL Global Forwarding, said: “Mongolia has untapped economic potential but realizing this potential requires integration with regional and global economies through international logistics networks as well as new transportation solutions. DHL Global Forwarding will continue to enhance connections between Mongolia and China, Japan and Korea to offer our customers first-mover advantage in this fast-developing country.”
<Mogi & Friends Fund A/C>
Mogi & Friends Fund is a tiny fund of A$23K I created in late September with a few friends to put my own (and a few friends’) money where my mouth (just mine) is.
Mogi
---
"Mogi" Munkhdul Badral
Executive Director
CPS International LLC
Telephone/Fax: +976-11-321326
Mobile: +976-99996779
Email: mogi@cpsinternational.mn
P Please consider the environment before printing a copy of this email.
Central Tower · 12th Floor · Left Wing · 2 Sukhbaatar Square
Sukhbaatar District 8 · Ulaanbaatar 14200 · Mongolia
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.
Disclosure/Disclaimer
CPS Securities, its directors and employees advise that they may hold securities, may have an interest in and/or earn brokerage and other benefits or advantages, either directly or indirectly from client transactions mentioned in correspondence from CPS International.
CPS International advise this email contains general information only and does not include advice. In preparing this communication, CPS International did not take into account the investment objectives, financial situation and particular needs of any person. As with any speculative mining company there are significant risks.
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