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DP officially pulls out of coalition government
January 12 (news.mn) The DP has officially pulled out of its governing coalition with the MPP. The decision was made at the 35th meeting of the DP’s National Consultative Committee (NCC) on Wednesday.
The meeting was sometimes contentious, with some party members criticizing DP Chairman N.Altankhuyag for announcing the withdrawal last week, before the party could discuss the matter collectively. Altankhuyag’s resignation was not discussed at the meeting, nor was revising the party’s administrative structure.
N.Altankhuyag stated his rationale for pulling the party out of the coalition government. Some members, including Road, Transportation and Urban Development Minister Kh.Battulga and MP D.Gankhuyag, criticized the way voting at the meeting was conducted.
Eventually members approved a protocol to pull out of the coalition and support N.Altankhuyag.
The six DP ministers and seven deputy ministers in the coalition government reported on their work and answered questions from delegates. The meeting was closed by quoting the words of the eighth Bogd Jabzundamba.
Related: Mongolian Democratic Party decides to quit ruling coalition government – Xinhua, January 11
Cabinet Accepts D. Sugar’s Resignation
January 12 (Mogi) Cabinet Meeting on Wednesday, January 11, accepted D. Sugar’s resignation as Chairman of the State Property Committee.
Link to Cabinet press release (in Mongolian)
Silk Road Management Launches Silk Road Australia Index
ULAANBAATAR, January 11 -- Silk Road Management is pleased to announce that it launched Silk Road Australia Index (SILKAU), a debut benchmark that includes largest Mongolia and Central Asia-focused companies with listing on the Australian Stock Exchange (ASX). The index currently covers 10 companies with the total market capitalization of US$1.2 billion (December 31, 2011) and is set with initial value of 1000 as of January 1, 2012.
Alisher Ali, Managing Partner, Silk Road Management stated, "We believe that the Silk Road Australia index with albeit modest US$1.2 billion market capitalization is expected to expand significantly in coming years on the back of upcoming IPOs of Mongolia focused resource companies on the ASX and accelerated acquisitions in the mining sector in Mongolia by existing ASX-listed companies". Similarly, the Silk Road Hong Kong Index more than tripled to US$12 billion in market capitalization at end-2010 from US$3.4 billion at the beginning of the same year due to three IPOs of Mongolian resources companies on the Hong Kong Stock Exchange - Mongolian Mining Corp., SouthGobi Energy and Winsway Coking Coal Holdings.
The Silk Road Australia Index, the Australian dollar and market capitalization - based gauge, tracks the share price performance of the Australian-listed companies with assets and operations in Mongolia and other resource-rich frontier Silk Road countries. Such resource companies are increasingly considering the Australian bourse as an attractive market to raise capital due to the resilience of the Australian equities market despite continued global volatility. "We anticipate that Australian institutional and retail investors will seek exposure to new resource markets in the Silk Road region after witnessing massive success of the mining sector in Australia", said Alisher Ali.
Cougar: ASIA BUSINESS PROGRESS REPORT
January 12 -- Cougar Energy Limited (ASX:CXY) provides the following progress report on the development of its Underground Coal Gasification (UCG) business in Asia.
As previously announced, Cougar Energy has implemented a UCG business development strategy in Asia focussed on the coal rich regions of the People’s Republic of China, Mongolia and Indonesia.
Over the past two months, the Company has been working with its local staff and partners in each country to identify projects suitable for commercial UCG development and liaise with Government officials to consider what, if any, specific approvals are required for the technology to be developed. At the same time, the Company is finalising a new corporate structure within which Asian projects will be developed.
…
Mongolia
Cougar Energy, through its Mongolian subsidiary company and local partner, continues discussions with the Mongolian Government and its agencies on the development of local coal resources under UCG projects for power and other product end uses. A draft agreement between the parties has been prepared and is currently being reviewed prior to finalisation.
The Company has also received data from several current coal lease owners in Mongolia who have expressed interest in associating with the Company in a commercial UCG development. Technical data relevant to these coal leases is being reviewed as to their suitability for application of the UCG process.
…
Nova Resources: Change of Adviser, Board Appointments
January 11, Nova Resources Limited (NOVA:LN) --
Change of Adviser
The Board of Nova (NOVA.L), the AIM-quoted investing company, is pleased to announce that it has appointed Daniel Stewart & Company Plc as the Company's Nominated Adviser and Broker with immediate effect.
Board Appointments
Pursuant to notifications made on 4 and 5 January 2012, the Company is delighted to announce the appointment of Mr Charles Alexander Green as a Non Executive Director and Chairman of the Company replacing Mr Chan Fook Meng in the latter role.
In addition, the Company announces the appointment of Mr Nazim Khan as a Non Executive Director of the Company. Both appointments are effective immediately.
Charles (aged 58) has significant experience in corporate transactions and was responsible for the stock market flotation of Sheffield United Football Club in 1997. He has held a number of directorial positions including Chief Executive Officer of Source BioScience Plc.
Charles held the position of Business Development Director at Texas Gardner Group Plc ("Texas") which was floated on the Official List in November 1995 where he orchestrated the purchase by Texas of a controlling stake in the holding company. He is currently on the board of Formation Group Plc.
Nazim (aged 48), a solicitor, was called to the Bar in 1990 and subsequently to the Singapore Bar in 1992. He has worked as a commercial attorney for several law firms in Singapore before moving into corporate finance, restructuring and mergers and acquisitions.
Nazim has also been active in energy and resource based work in emerging markets. He is currently on the board of Tricor Plc.
Commenting on the changes, Mr Chan Fook Meng, Chief Executive Officer said:
"The Board is delighted to welcome both Charles and Nazim to the Company. They have both excelled in their areas of expertise and their extensive working knowledge bolsters the strength of the Board. The combined experience of the new team of Directors will be key assets of the Company's next stage of expansion and we look forward to the support they will bring."
Save as set out below there are no further details in relation to the above appointments, which require disclosure under paragraph (g) of Schedule Two to the AIM Rules:
Centerra Gold 2011 Fourth Quarter and Year-End Results Conference Call and Webcast
TORONTO, ONTARIO--(Marketwire - Jan. 11, 2012) - Centerra Gold Inc. (TSX:CG) will host a conference call and webcast of its 2011 fourth quarter and 2011 year-end financial and operating results at 10:30AM Eastern Time on Friday, February 24, 2012. The results are scheduled to be released after the market closes on Thursday, February 23, 2012.
· North American participants should dial the toll-free number (800) 895-5087.
· International participants may access the call at +1 (212) 231-2903.
· The conference call is being webcast by Thomson Reuters and can be accessed at Centerra Gold's website at www.centerragold.com.
An audio recording of the call will be available approximately two hours after the call via telephone until midnight Eastern Time on Friday March 2, 2012. The recording can be accessed by calling (416) 626-4100 or (800) 558-5253 and using the passcode 21574348. In addition the webcast will be archived on Centerra Gold's website www.centerragold.com.
IE closed -4.31%, IVAN closed -3.51%
Ivanhoe Energy's interest in China's Zitong Block to be sold to Royal Dutch Shell subsidiary for cash proceeds of up to US$160 million
Transaction will enable Ivanhoe Energy to finance and advance its core heavy oil business
CALGARY, Jan. 11, 2012 /PRNewswire/ - Ivanhoe Energy Inc. (TSX: IE; NASDAQ: IVAN) announced today that its wholly owned subsidiary, Sunwing Zitong Energy (SZE), has signed a binding Memorandum of Understanding to sell 100% of its participating interest in the Production Sharing Contract for the Zitong block in China's Sichuan Basin to Shell China Exploration and Production Company Limited, a subsidiary of Royal Dutch Shell. The transaction is subject to government approvals and other prescribed conditions.
"Our strategy is very straight forward," said Robert Friedland, an Ivanhoe Energy Executive Co-Chairman. "Ivanhoe Energy, through Sunwing, has been active in China for more than 10 years. We have made an important discovery of natural gas and we have an understanding of the potential of the block. However, this opportunity arose at an appropriate decision point and we have opted to focus our energy and resources on the commercialization of our Heavy-to-Light (HTL) heavy oil upgrading process and the development of our attractive oil projects. This means we will sell our Zitong asset to a company that has the financial and technical resources to fully develop the potential of the block for the benefit of the people of China."
Mongolia’s First Municipal Bond: Sukhbaatar Bond
January 12 (Mogi) BDSec JSC (BDS:MO) is underwriting Sukhbaatar Aimag’s bond, Mongolia’s first municipal on the Mongolian Stock Exchange (MSE) to raise MNT 2 billion with 12%-12.5% yields at 1-1.5 year maturity
ResCap: Equity Note – Suu JSC
January 9 (ResCap) --
Suu JSC (SUU:MO) is one of the largest and most respected companies in Mongolia with over 50 years of history as a true market leader in its field. Suu is the biggest domestic producer and distributor of various dairy products including milk, yogurt and ice cream in Mongolia. By providing over 60% of the total domestic diary production, Suu has a superior network of herders and dairy farmers for raw milk supply which all other competitors are constrained by.
In 2010, Suu’s revenue reached to MNT 20.4 billion, up 84% from its 2009 figure. With US$ 4 million financing secured from IFC, France’s Proparco and Belgium’s BIO in 2011, Suu is well positioned to increase production capacity and extend its network of raw milk herder-suppliers to 4,000 from the current 2,500 herders.
We think that Suu is well positioned in the highly potential local diary production market and with its current management, the Company should be well on the way to become a clear national leader.
Kh.Battulga says N.Altankhuyag is playing politics
January 11 (news.mn) Road, Transportation and Urban Development Minister Kh.Battulga spoke at a meeting of the DP’s National Consultative Committee on Wednesday.
Kh.Battulga noted that the coalition government has reported that 82 percent of its programs and projects have been implemented, so there is still work to do. He also criticized DP Chairman N.Altankhuyag for saying the party will pull out of the coalition government, calling the statement nothing but politics.
Kh.Battulga said that N.Altankhuyag has not discussed the matter with DP ministers and has not fully explained his reasoning to the public. Kh.Battulga emphasized that N.Altankhuyag has not united DP ministers and that the DP should explain its reasons for pulling out to the people, because the party cannot leave the coalition without an explanation.
He also noted that the resignation of the chairman and the date of the party’s assembly will not be discussed at the meeting.
Some gasoline prices reduced by MNT 50 per liter
January 12 (news.mn) Some petroleum importers have reduced the price of a liter of gasoline by MNT 50. Officials of the companies gave no reason for the price reduction.
Some people believe the companies are reacting to the Government’s promise to hold them accountable if they raised prices without good cause.
Petrovis sells a liter of AI-80 for MNT 1,500; AI-92 for MNT 1,800; diesel for MNT 1,950; and AI-95 for MNT 1,950.
Sod Mongol LLC sells a liter of AI-80 for MNT 1,515; AI-92 for MNT 1,820; diesel for MNT 1,885; and AI-95 for MNT 2,000.
MT Oil LLC sells a liter of AI-80 for MNT 1,500; AI-92 for MNT 1,800; diesel for MNT 1,850; and AI-95 for MNT 1,950.
Shunkhlai LLC sells a liter of AI-80 for MNT 1,500; AI-92 for MNT 1,800; and diesel for MNT 1,850. It does not sell AI-95.
Government establishes price-control council
January 12 (news.mn) At Wednesday’s meeting of the Government, Chief of Cabinet Secretariat Ch.Khurelbaatar submitted a proposal to stabilize the prices of gasoline, some foods, and public transit fares.
Under the proposal, the prices of gas, consumer goods, some foods and services, and the tugrik’s rate against the U.S. dollar would be regulated, because, according to Ch.Khurelbaatar, some businesses that dominate the domestic market are illegally increasing prices for no good reason.
Government members approved the proposal and established a council headed by Finance Minister S.Bayartsogt. The council will oversee implementation of a price-control program to stabilize prices, monitor the program, and report on it to the Government monthly.
All government agencies, aimag governors, and Ulaanbaatar districts have been asked to improve the supply of consumer goods, monitor prices, spend budget capital with care, and economize expenditures. Members decided to regulate the sale of foreign currency to keep the tugrik from falling further.
The Finance Ministry has been asked to spend budget capital with care, increase investment to benefit households, generate more jobs, and reduce unemployment.
Government discusses measures to curb inflation
January 12 (news.mn) At the Government meeting on Wednesday, members discussed measures to fight inflation, especially rising gasoline prices.
Government members asked Mongol Bank President L.Purevdorj to sell U.S. dollars at Mongol Bank’s official rate to petroleum importers for buying oil. Also, the finance and mineral resources and energy ministers were asked to establish fuel reserve tanks in Ulaanbaatar, Darkhan, and Choir. Mineral Resources and Energy Minister D.Zorigt has been asked to hold talks with foreign companies to increase gasoline import sources.
At the end of the meeting, Prime Minister S.Batbold ordered measures be taken to hold accountable Deputy Mineral Resources and Energy Minister B.Ariunsan and Mineral Resources and Petroleum Authority Chief D.Amarsaikhan for allowing gasoline prices to be increased last weekend without first discussing the matter with the relevant state agencies.
S.Batbold also called for the Fair Competition and Consumer Protection Office and the Consumers Rights Protection Association to be held accountable for their poor work.
Members also ordered the Fair Competition and Consumer Protection Office to hold petroleum importers accountable for increasing gasoline prices, which have caused a rise in consumer goods prices.
Mongolia asks China for fuel, energy
January 12 (news.mn) Foreign Affairs and Trade Minister G.Zandanshatar is on an official visit to China at the invitation of Chinese Trade Minister Yang Jiechi. The visit began on Wednesday and ends on January 15.
G.Zandanshatar and Chen Deming met on Wednesday and exchanged opinions on trade and economic cooperation. The ministers noted relations between the two nations, their strategic partnership, and cooperation are all at high levels.
Trade and economic cooperation are the main reasons for good relations. Trade between the two countries amounted to USD 6.3 billion in 2011, a two-fold increase over 2010.
The officials mentioned the decisions reached at an intergovernmental meeting of Mongolian and Chinese officials last June, and said they would organize working groups to implement those decisions.
G.Zandanshatar asked for China’s help with Mongolia’s fuel shortages, and proposed widening relations in the energy and oil sectors. He also asked for China’s support in the construction of an oil refinery, and inquired about importing energy for the Oyutolgoi mining project from Inner Mongolia, revising the coal export tax from Mongolia to Inner Mongolia, and building a pipeline between Russia and China through Mongolia.
Chen Deming promised to decide the issues with “feasible positive effects.”
G.Zandanshatar invited Chen Deming to visit Mongolia. Then he met with Mongolian students at the Mongolian Embassy in Beijing.
Report: Mongolia will export 30 million tons of coal this year
January 12 (news.mn) Frontier Securities has released its preliminary report on Mongolia’s economy for 2012. The report says Mongolia will export 30 million tons of coal in 2012, with coal export revenue reaching USD 2.75 billion.
Mongolian specialists have predicted coal exports will be 24 million tons. According to the National Statistics Office, coal accounts for 45 percent of all exports and earns about USD 2 billion annually.
Frontier Securities also estimated Mongolia’s copper export revenue at USD 1 billion, and iron ore at eight million tons and USD 500 million. In those numbers hold up, copper exports will be the same as in 2011, while iron ore will increase by ten percent.
According to the World Bank and International Monetary Fund, economic growth in Mongolia will be 15.1 percent and inflation will reach 17 percent.
Mongol Bank holds foreign currency auction
January 11 (news.mn) On January 10, Mongol Bank held a foreign currency auction, selling USD 5.5 million at a rate of MNT 1,410 to one U.S. dollar.
Banks tendered to sell USD 2.5 million and to buy USD 5.5 million. The amount sold was 100 percent of the tendered amount.
Mongol Bank holds foreign currency auctions on Tuesdays and Thursdays, with banks licensed in Mongolia eligible to participate. It held its previous foreign currency auction on January 5.
Golomt Bank: Tugrog Exchange Rate Will Stabilize
January 11 (news.mn) The MNT and USD exchange rate has reached 1400 recently. We had an interview on this topic of currency exchange rate movement and its projected trend with Golomt Bank’s Vice President Mr. Gankhuyag.
What is the reason for MNT vs. USD rate rising above 1400?
Currency exchange rate is directly influenced by supply and demand of foreign trade, foreign direct investment whose payments are settled in foreign currency. Mongolia’s macro economy, foreign trade, finance, foreign exchange market is not too complex to understand and analyze. If we look at statistics, as of the first 11 months of 2011, export was USD 4.3 bil, import was USD6 bil with trade deficit of USD1.7 bil. As Mongolia is heavily influenced by foreign trade, any changes occurring in the economy has an immediate effect on the trade balance. For example, the state funded projects such as increasing number of mortgage and housing, road construction and infrastructure building and Oyu Tolgoi and Tavan Tolgoi’s developments followed by the mining sector’s considerable growth are predisposing factors for purchase of construction materials, road and construction equipments, heavy duty automobiles which account for approximately 60 per cent of total imports. If this is excluded, we can see that Mongolia will have trade surplus. It is important to note that in the long term, imports of such goods are effective investment because these will factor into the increase in mining and extraction industry’s production growth.
On the other hand, trade deficit was mainly financed by foreign direct investment and as local banks strengthened overall lending has increased.
Tsagaan Sar is approaching which means USD and CNY demand will increase, will the exchange rate rise again?
It must be noted that current Mongolian economy and its trade cycle has changed dramatically since the 90s. Food, clothing, textile constitute only 4 per cent of total import and export income from animal/agricultural products such as wool and cashmere account for less than 4 per cent of total trade income. Therefore, an implication of rise in exchange rate during Tsagaan Sar resulting from wool and cashmere has become irrelevant.
Can the Bank of Mongolia’s USD reserves act to stabilize the exchange rate?
Compared to 2008 and 2009 there has been favorable environment for the macro economy such as the budget surplus of 2011, stronger financial capacity and the overall banking system health, improvement on credit ratings by foreign rating agencies, and less dependence on copper for foreign trade. There should be no complication for the Bank of Mongolia to implement its currency policy as its foreign currency reserves has increased five times compared to its reserve of USD 500 mil at the beginning of 2009. However, an implementation of more flexible policy by the Bank of Mongolia in accordance with the current macroeconomic trend is suitable.
What is your view in regards of the upcoming dollar rate trend?
I have to say that each individual and organizations have their own perception in this regard. In my opinion, it is necessary to monitor the foreign trade balance on monthly basis. Also due to the strict monetary policy by the Central Bank in order to prevent from the inflation causing the demand restriction of the goods and services, it is viewed that previously mentioned import consumption has been decreased. Therefore trade balance could be positive for the beginning quarters of next year.
The main point is that it is comprehended Mongolian currency /MNT/ shall maintain its value for longer period when our exporting goods cover the recurrent export expenses.
However, the rate movement due to the temporary balance variations of the currency in and out flows cause uneasy situations to the trade sectors because of their comparatively low profit margin.
Therefore, it is necessary to implement swap and forward market realistically which control the short and medium term currency demand in cooperation with the Central Bank, the Government, Mining and Banking sectors.
Individuals and entities shall be reminded of the risk factor when it comes to attempting for profit gain or entering into unnecessary arrangement during the short and medium term exchange rate movement.
Mongolian Tugrog investment return is high and as our economy grows rapidly it creates long term confidence in the strength of our currency.
Ulaanbaatar to cooperate with Chinese railway
January 12 (news.mn) Ulaanbaatar Mayor G.Munkhbayar received representatives of the China Railway International Economic Corporation on Wednesday.
Lu Bo of the corporation said it was interested in working with the city to improve roads and buildings. He also sad the corporation was interested in investing in Mongolia’s construction sector.
Lu Bo noted that Ulaanbaatar and Beijing are sister cities, and that cooperation between the cities will expand in relation to the Beijing mayor’s planned visit to Ulaanbaatar in 2013. Lu Bo underlined that the corporation’s cooperation with Ulaanbaatar construction companies will achieve technological progress.
Ulaanbaatar and Beijing representatives will meet in Ulaanbaatar on January 13 and delegates will exchange information on construction and engineering.
Mongolia to mark 90th anniversary of mining sector
January 12 (news.mn) Mongolia’s Ministry of Mineral Resources and Energy is making plans to commemorate this year’s 90th anniversary of the establishment of the country’s mining sector.
Deputy Mineral Resources and Energy Minister B.Ariunsan will lead a commission overseeing commemorative events, which will commence in March. The ministry plans to organize conferences, forums, exhibits, and meetings with the cooperation of other ministries and NGOs.
The ministry is planning to hold conferences on the following themes: “Mongolia and Spar,” “Facing Problems of Infrastructure Development in the Mining Sector,” “Coal Export: Market, Price, Quality, and Transportation,” and “Metal Processing and its Positive Effects.” The ministry will also launch a website to promote the mining sector, and organize a forum under the president’s sponsorship at the end of the year.
The deputy chief of the ministry’s Mining and Heavy Industry Policy Office, Ch.Tsogtbaatar, stated that the Nalaikh mining project opened in 1922 and the mining sector has developed intensively in recent years. But he said there are still problems with production and the manufacture of value-added products.
Japan, Mongolia sign memo to boost defense cooperation
ULAN BATOR, January 11 (Kyodo) -- Japanese Defense Minister Yasuo Ichikawa and his Mongolian counterpart Luvsanvandan Bold signed a memorandum Wednesday to boost defense cooperation between their nations via subcabinet-level dialogue and other exchanges.
The memorandum, signed after the two defense ministers held talks in Ulan Bator, touched on exchanges between Japan's Self-Defense Forces and Mongolia's military as well as reciprocal visits by the Ground Self-Defense Force chief of staff and Mongolia's armed forces chief.
The memo says promoting ties between the countries' defense authorities will contribute to peace and stability in the Asia-Pacific and the world, and also agreed to boost the exchange of views over security concerns and cooperation in U.N. peacekeeping operations.
Japan and Mongolia also agreed to actively take part in joint drills that their countries are hosting or supporting.
Japan aims to keep China, a growing military power, in check by deepening its ties with Mongolia, which is located between China and Russia, political observers said.
Tokyo is also pinning its hope on the exchange of information with Mongolia, which maintains friendly ties with North Korea, that can help resolve the issue of Pyongyang's past abductions of Japanese citizens, they said.
The last time Japan's defense minister visited Mongolia was in April 2006, when then Defense Agency Director General Fukushiro Nukaga, a Cabinet member, visited.
The latest talks between the Japanese and Mongolian defense ministers took place in the year both countries are commemorating the 40th anniversary of diplomatic ties.
Related: Mongolia, Japan to cooperate in defense – Xinhua, January 11
Background Note: Mongolia
January 6 (State Department) --
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"Mogi" Munkhdul Badral
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CPS International LLC
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CPS International is a marketing arm of CPS Securities in Mongolia. CPS Securities is a Perth, Western Australia based AFSLicense Holder. To trade ASX and international stocks, feel free to contact me at mogi@cpsinternational.mn or +976-99996779.
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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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