Thursday, January 30, 2014

[BDSec sees stealth bull market, GoM treasury auctions falling short, Avar appeals Tokyo, and Happy Tsagaan Sar!]

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Thursday, January 30, 2014

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Headlines in Italic are ones modified by Cover Mongolia from original


Cover Mongolia

Happy Tsagaan Sar and Best Wishes for the Year of the Wooden Horse

Here's something for you to read over the holidays.

Friday, January 31 is the Lunar New Year's Day holiday. See you back on Monday.

Happy Buuzing and Boozing Folks,



Overseas Market

Exploration Update: Ovoot Tungsten Project - Mongolia

January 30, Eumeralla Resources Limited (ASX:EUM) --

Key points:

·         Interpretation of the dipole-dipole induced polarization (IP) geophysical survey and rock chip sampling.

·         New gold target identified in the northern part of the licence.

·         Several other promising chargeability anomalies indicated.

·         Ongoing exploration to focus on additional rock chip and soil sampling in areas of interest including previous mine site


The company's Ovoot exploration licence covers an area of 12,657 hectares and encompasses the historical Chuluun Khoroot tungsten mine which was active during the period 1945-1955. In September 2013, the Mineral Resource Authority granted an extension of the licence for an additional three years until 26 September 2016.

The company's initial focus has been to evaluate the tungsten potential of the licence, although other commodities may be targeted in the future. During 2013, the company mapped the licence area, and collected and analysed 311 rock chip samples. The surface mapping and sampling results outlined 9 promising targets, including various combinations of Au, Cu, Pb, Zn, Mo and W, that prompted the company to commission a dipole-dipole IP survey to further evaluate the subsurface geology of the targets.

Link to release


Origo Partners PLC: Change of Adviser 

January 30 -- Origo Partners PLC ("Origo" or the "Company," LON:OPP) announces that Smith & Williamson Corporate Finance Limited has been appointed to act as the Company's nominated adviser with immediate effect.  

Investec Bank Plc will also now become the sole broker to Origo.

Link to release

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Local Market

MSE News for January 29: Top 20 +3%, Turnover 9.2 Million

Ulaanbaatar, January 29 (MONTSAME) At the Stock Exchange trades held Wednesday, a total of 1,995 shares of 13 JSCs were traded costing MNT nine million 228 thousand and 692.00.

"Tavantolgoi" /552 units/, "Material impex"  /333 units/, "State Department Store"  /200 units/, "Hai Bi Oil" /198 units/ and "Baganuur" /186 units/ were the most actively traded in terms of trading volume, in terms of trading value--"Material impex"  (MNT four million 307 thousand and 500), "Tavantolgoi" (MNT two million 925 thousand and 510), "Baganuur" (MNT 779 thousand and 914), "APU" (MNT 293 thousand and 985) and "Mongolian telecommunication" (MNT 281 thousand and 774).

The total market capitalization was set at MNT one trillion 627 billion 529 million 251 thousand and 812. The Index of Top-20 JSCs was 16,038.18, increasing by MNT 466.53 or 3.00% against the previous day.

Link to article


MSE News for January 30: Top 20 -0.16%, Turnover 123.3 Million

Ulaanbaatar, January 30 /MONTSAME/ At the Stock Exchange trades held Thursday, a total of 155 thousand and 446 shares of 21 JSCs were traded costing MNT 123 million 278 thousand and 825.00.

"Darkhan guril tejeel" /145 thousand and 831 units/, "APU"  /4,042 units/, "Sharyn gol"  /1,101 units/, "Hai Bi Oil" /1,050 units/ and "Moninjbar" /650 units/ were the most actively traded in terms of trading volume, in terms of trading value--"Darkhan guril tejeel"  (MNT 87 million 498 thousand and 600), "APU" (MNT 16 million 422 thousand and 313), "Sharyn gol" (MNT eight million 607 thousand and 400), "Talkh chikher" (MNT two million 879 thousand and 500) and "Tavantolgoi" (MNT two million 713 thousand and 600).

The total market capitalization was set at MNT one trillion 623 billion 963 million 751 thousand and 640. The Index of Top-20 JSCs was 16,011.96, decreasing by MNT 26.22 or 0.16% against the previous day.

Link to article



January 29 (MSE) According to FRC Resolution No.546 of December 18, 2013, Decree No. 58 and 59.1 of MSE 'Listing Rules', and MSE Chief Executive Officer's Decree No.23 of January 24, 2014, 'Khorol-Erdene' JSC's total of 86,850 shares were delisted from the MSE securities list. 

Link to release


BDSec: Lackluster 2013 for MSE Top 20 Masks Stealth Bull Market in High Quality Stocks

January 29, 2014 (BDSec) --

In April 2013, we made the case to MSE investors that they should take advantage of the uncertainty surrounding Oyu Tolgoi, (which persists to this day) and buy high quality Mongolian stocks. As we looked at the strong financial performance of many local companies and their dirt cheap valuations, we decided to apply a proprietary quantitative methodology to identify the highest quality names.

We ran 3 different screens that focused on separate investing disciplines: Growth, Value and a combined Proprietary approach. We then ranked each name based on how they scored on key metrics, which then produced a numeric value which acted as a scorecard.

Sentiment at the time we published "A Quantitative Look at Mongolian Equities" was at rock bottom and there was considerable skepticism that a quantitative approach could work in picking local stocks and even more pessimism that it was the right time to start buying. With 2013 in the books, we felt it was time to see how our approach stacked up versus the MSE Top 20 and the results were quite favorable. One caveat we should mention is there are several stocks, particularly on our value list, which haven't traded since we published our original note. In the interest of accuracy, we removed these names from our calculations for the performance of our three screens. The numbers and multiples below are from our original report and based on 2012 financial results, we will do a full revision in April when all MSE listed companies have reported their financials for 2013. From April 8, 2013 our Growth, Value and Proprietary screens produced un-annualized returns of +38.5%, +40.7% & +35.8%, respectively, with several individual stocks up over 100%. The MSE over the same period was +1% and for FY 2013 -8%.

The following are the original screens, where we included individual and overall investment returns for our Growth Value and Proprietary lists.

Link to full report

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BoM MNT Rates: January 30 Close





































January MNT Chart:

Link to rates


Mogi: 20 billion announced but only 13.5 billion bids received


January 29 (Bank of Mongolia) Regular auction for 52 weeks maturity Government Treasury bill was announced at face value of 20.0 billion MNT and each unit was worth 1 million MNT. Face value of 11.5 billion /out of 13.5 billion bid/ Government Treasury bill was sold to the banks at discounted price and with weighted average yield of 10.80%.

Link to release


Mogi: bids coming in way below announced amount


January 29 (Bank of Mongolia) Auction for 3 years maturity Government Bond was announced at face value of 30 billion MNT and each unit was worth 1 million MNT. Face value of 7.5 billion /out of 9.5 billion bid/ Government Treasury bill was sold to the banks at premium price and with weighted average yield of 11.08%.

Link to release


BoM issues 295 billion 1-week bills, total outstanding up 1.8% to 1.02 trillion

January 29 (Bank of Mongolia) BoM issues 1 week bills worth MNT 295 billion at a weighted interest rate of 10.5 percent per annum /For previous auctions click here/

Link to release


BoM FX auction: Accepts all bids, sells USD3 million at 1,721.85, CNY8 million at 283.5, accepts all USD13 million USD swap bids

January 30 (Bank of Mongolia) On the Foreign Exchange Auction held on January 30th, 2014 the BOM has received from local commercial banks bid offer of USD and CNY. The BOM has accepted all offers by selling 3 million USD as closing rate of MNT 1721.85 and 8 million CNY as closing rate of MNT 283.50.

On January 30th, 2014, The BOM has received USD Swap agreement offer of 13.0 million USD from local commercial banks and accepted the offer.

See also:

FX Auction Statistics

Link to release


8% Mortgage Program Update: ₮482.5 Billion Refinanced, ₮827.2 Billion Newly Issued, Total 1.31 Trillion

January 29 (Cover Mongolia) As of January 29, 482.5 billion (₮482.4 billion as of January 27) existing mortgages of 17,086 citizens (17,057 as of January 27) were refinanced at 8% out of 844.1 billion (844.1 billion as of January 27) worth requests.

Also, 827.2 billion (₮821.8 billion as of January 27) new mortgages of 14,451 citizens (14,346 citizens as of January 27) were issued at new rates out of 901.4 billion (₮897.1 billion as of January 27) worth requests.

Link to release (in Mongolian)

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Petroleum Law Revision Approved for Final Discussion

January 29 (Open Parliament)

Link to parliament press release


Standing Committee Discusses Redraft of Petroleum Law

Ulaanbaatar, January 29 (MONTSAME) The Standing Committee on Economics continued a first discussion of a new wording of the petroleum law and accompanying it documents on Wednesday morning. 

Considering that there are two articles similar in their content, the Committee agreed to remove an article stating that a contractor shall be in charge of costs related to goods transportation and shall include those costs in their action plans for mineral deposit activities.

The Committee agreed to discuss again the draft after a parliamentary session on Wednesday.

Link to article


Prominent Mongolian Environmentalist Given 21-Year Jail Sentence for 'Terrorism'

January 29 (Bloomberg Businessweek) Tsetsegee Munkhbayar grew up raising yaks on the banks of the Onggi River, once one of Mongolia's largest sources of freshwater. Rapid growth in unregulated hydraulic mining gradually sucked many tributaries of the river dry; by 2001 all that remained were dry stream beds. Other Mongolian rivers also became badly polluted, as mining operations with minimal oversight dumped sludge and waste fluids into the parched country's precious water sources.

In the early 2000s, the herder-turned-activist co-founded the Onggi River Movement to lobby for and help enforce new environmental regulations designed to protect the landscape and nomadic herders' traditional way of life. In 2007, he was honored with the Goldman Environmental Prize, arguably the most prestigious international green award. He was also named a National Geographic Emerging Explorer, telling the magazine that his activism was motivated by two simple but inescapable questions: "If we desert our land, who will be accountable for its fate? Who will be left to stop the disastrous outcomes of irresponsible governmental policy?"

His international honors won Munkhbayar no plaudits from his own government, which is now struggling to find a balance between opening up the steppes to lucrative mining deals and protecting the local environment. By some estimates, Mongolia is expected to experience the world's fastest gross domestic product growth in 2014—a red-hot 15.3 percent.

Last week, Mongolian courts sentenced Munkhbayar and four other environmental activists to startling 21-and-a-half-year jail terms for "acts of terrorism." They had brought firearms to a protest last September against pending legislation that would have undone an existing ban on mineral exploration near river heads. One round of shots was fired, whether accidentally or intentionally; no one was injured.

Human rights groups consider the sentence unusually harsh. Enkhbat Toochog, of the Southern Mongolian Human Rights Information Center, told Asian Correspondent magazine: "Munkhbayar's actions highlighted the desperation of helpless Mongolian pastoralists who had no choice but to resort to an unconventional approach to defend their land, rights and way of life after exhausting all other means."

Link to article

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Mongolia to build heavy industrial park

ULAN BATOR, Jan. 29 (Xinhua) -- The Mongolian government said Wednesday the research phase of Sainshand heavy industrial park would be completed by June, and development contracts would be signed this year.

Ganbold Dogsom, head of the heavy industrial policy department under the Ministry of Industry and Agriculture, said the development of the park would begin next year and would be completed by early 2018.

Discovery of a large underground water deposit near Sainshand solved a water supply issue, the biggest challenge to the project, the official said.

Development of the industrial park project will require investment of about 5.5 billion U.S. dollars, according to a preliminary estimation.

It is estimated about 5 million tons of steel will be produced annually and about 10,000 new jobs created under the project.

According to a report, Sainshand will be managed by Fluor, a global engineering construction company based in the United States.

Link to article


Customs Tax Annulled for Jet Fuel Import through Zamyn-Uud Port

January 29 (InfoMongolia) The regular Cabinet meeting of the Government was pre-arranged on January 28th due to upcoming Tsagaan Sar Holiday, and one of the issues resolved was measures to take on price stabilization for imported aviation fuel.

Mongolia imports aviation fuel from the Russian Federation and 100% dependent to date, in the meantime the border price has been fluctuating frequently tends to grow, hence in order to stabilize the price, the Government has resolved to take the following measure.

The customs tax for aviation fuel to import through Zamyn-Uud border port that purposed for civil aviation was annulled. To date, the fuel was not transported via Zamyn-Uud port and authorities deem it would not affect negatively to the state budget income, besides such decision would open opportunity to supply aviation fuel from other sources to keep domestic air service price tariff. 

Link to article


MNCCI Congratulates 2014 Silk Road Award Winners

January 29 (MNCCI) In recognition of the various efforts made by foreign citizens and organizations towards Mongolia's development, the Mongolian National Chamber of Commerce and Industry would like to congratulate the winners of the 2014 Silk Road Awards.


Best Foreign Investor Contributing to the State Budget

Erdenet Mining Corporation

Leighton LLC

Best Foreign Investor –Introducers of Advanced Technology

Chemus Co. Ltd

Mobicom Corporation

Best Green Investor

Clean Energy Co. Ltd

Best Socially Responsible Investors

Green City Co. Ltd

Akvatron-Ach Co. Ltd

Turkish Airlines

Best Investor with Good Corporate Governance

Wagner Asia Equipment LLC

Best Investor on Employment Creation

Oyu Tolgoi LLC



Most Valued contributor in sustainable and inclusive economic growth

Efficiency of grid-based energy supply schemes, GIZ

SME development project, EBRD

Most Valued contributor in social development

Global Foundation

Most Valued contributor in developing green economy, green business and sustainable environment practices

KOICA for the Building energy efficiency project Mon/09/301

Most Valued contributor in poverty reduction, sustainable livelihood development

ADRA Mongolia for the Index based livestock insurance project

Most valued contributor in implementing Public Private Dialogue Partnership

Business plus initiative project, USAID

Best contributor in development of bilateral cooperation

H.E. Takenori Shimizu The Ambassador, Extraordinary and Plenipotentiary Japan

H.E. Wang Xiao Long The Ambassador, Extraordinary and Plenipotentiary Peoples Republic of China

H.E.Gregory Goldhawk The Ambassador, Extraordinary and Plenipotentiary Canada

Mr.Nishigawa Takeshige MNCCI Japan office, Board member Head of Japan Mongolian Association Airag for economic & cultural cooperation

Mr. G.E.Bocharov Erdenet mining corporation

Link to release

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Capital City to Implement Smart Government Initiative

Ulaanbaatar, January 29 (MONTSAME) Ulaanbaatar city Mayor E.Bat-Uul Wednesday issued an ordinance to form a working group responsible for a program development for the Smart Government initiative.

Following the ordinance, the same day, a working group in charge of developing a program and action plans, regulating implementation activities for the President's initiative of "From Big government to Smart government", was formed.

The group is led by Yo.Erdenechuluun, the General Manager of Ulaanbaatar city, and includes the city administrative officials, districts governors and representatives of non-governmental organizations.

The Mayor assigned the newly-formed group to introduce their "Smart Government-2014" program and plans to the City Council by February 15. 

Link to article

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Mongolian firm appeals against court decision to deny acquisition of Chongryon's HQ

January 30 (Kyodo via A Mongolian company that won last October's auction for the Tokyo headquarters of a pro-North Korean association appealed Wednesday against the Tokyo District Court's recent decision to make the auction result invalid.

The district court rejected the bid offer by Avar Limited Liability Co., citing that some of the documents submitted by the firm were copies rather than originals. The Tokyo High Court will judge whether to approve the firm's acquisition of the estate of the General Association of Korean Residents in Japan, known as Chongryon.

If approved, the deadline will be set for paying the bid price of 5.01 billion yen. If disapproved, a third round of bidding will be held.

Chongryon acts as North Korea's de facto embassy in Japan in the absence of diplomatic ties between the two nations.

In 2012, the district court decided to auction Chongryon's headquarters as demanded by the Japanese government-backed Resolution and Collection Corp., which is owed about 62.7 billion yen by Chongryon following the collapse of financial institutions in Japan for pro-North Korean residents.

In the first round held last March, the Saifuku Buddhist temple in Japan's southwestern prefecture of Kagoshima won the bidding to acquire Chongryon's 10-story head office with two basement floors and its 2,387-square-meter tract of land in central Tokyo's Chiyoda Ward.

But the temple, whose chief priest Ekan Ikeguchi is known to have close ties with senior North Korean government officials and Chongryon, failed to pay the bid price by the deadline and was eliminated in the second round of auction.

Avar Limited Liability was one of the two bidders who filed their bids in the second round in October.

Link to article


Mogi: mmm, should we demand an apology?

Hayes: 'Some people think the European Parliament is some kind of Outer Mongolia'

Ireland junior finance minister Brian Hayes has not ruled out a return to domestic politics as he announced his intention to run for the European Parliament this morning.

January 29 ( --

Link to article


Mongolian and Lithuanian MFAs discussed economic relations

January 29 (The Baltic Course) On 28 January in Vilnius, the Minister of Foreign Affairs of Lithuania Linas Linkevicius met with the Mongolian Foreign Minister Luvsanvandan Bold to discuss political cooperation, the development of economic relations, transport links between the two countries and opportunities for Mongolian students to study in Lithuania, informs BC Lithuanian MFA.

Currently, Mongolia's Foreign Minister is paying an official visit to Lithuania. The purpose of the visit is to strengthen bilateral political and economic relations, and to discuss cooperation between Lithuania and Mongolia at the multilateral level. 

L.Linkevicius thanked his Mongolian counterpart for organizing a business seminar during the visit. The seminar provided an excellent opportunity for representatives of the two countries to discuss specific areas of cooperation. 

The meeting focused on cooperation within international organizations, including the United Nations, the Organization for Security and Co-operation in Europe and the Community of Democracies. L.Linkevicius thanked Mongolia for its support to Lithuania's bid for a non-permanent seat on the UN Security Council and presented priorities for Lithuania's membership for 2014-2015. 

The Foreign Ministers also discussed the enhancement of the dialogue between the European Union and Mongolia. According to L.Linkevicius, the EU-Mongolia Partnership and Cooperation Agreement, signed in April 2013, is an important step in expanding the political and economic cooperation between the member states of the European Union and Mongolia. 

Lithuania exports pharmaceutical products, petroleum products, and office machinery to Mongolia. 

Diplomatic relations between Lithuania and Mongolia were established on 11 December 1991.

Link to article

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Social, Environmental and Other

Asia Foundation: First Meeting of the Advisory Committee of the "Engaging Stakeholders for Environmental Conservation – Phase II" Project Held in Ulaanbaatar

Ulaanbaatar, Mongolia, January 27, 2014 (The Asia Foundation) — The initial meeting of the Advisory Committee of the "Engaging Stakeholders in Environmental Conservation – II" Project, implemented by The Asia Foundation with support from the Swiss Agency for Development and Cooperation (SDC), was held today at Sky Plaza center. During the meeting, ESEC II project's work plan was discussed and committee members gave comments and feedback.

The main objective of the Project Advisory Committee is to provide strategic guidance, high-level advocacy and support for ESEC II implementation and provide support for potential linkages and synergies with other national programs to increase national ownership, project impact and sustainable outcomes.

The Committee is chaired by the B. Batkhuu, Director of Policy Implementation and Coordination Department of the Ministry of Mining, and is composed of 12 members, representing line ministries and other relevant government institutions as well as the ASM Federation. The ASM Federation, established in May 2013, comprises over 30 ASM NGOs (over 7,000 artisanal miners) and works to protect the rights of artisanal miners and to promote environmentally and socially responsible artisanal mining.

ESEC II project, aims to ensure that Mongolia's artisanal mining sector contributes to sustainable local development, including the realization of the right to a healthy environment and the right to decent work. The project complements SDC's Sustainable Artisanal Mining project by introducing responsible and sustainable environmental rehabilitation approaches for abandoned artisanal and small scale (ASM) mining sites using a multi-stakeholder approach pioneered by the Foundation since 2006.

In December 2013, the Project held its Inception workshop to introduce the project to different partners and stakeholders in order to enhance cooperation. Since the start the Project has conducted number of capacity building trainings for ASM NGO members on multi-stakeholders' engagement, use of mercury in artisanal mining and community-based conflict mediation.

Read more about The Asia Foundation and its work in Mongolia.

Link to release


Stanford Pan-Asian Music Festival: Mongolian singers, California orchestra, Verdi's Requiem

January 28 (San Jose Mercury News) Rock 'n' rollers from China and Iran. Classical composers from Cambodia and India. Drummers from Myanmar and Uzbekistan. Like a cultural ringmaster, Jindong Cai scouts Asia for talents known and unknown, traditional and new, and brings them to the Stanford Pan-Asian Music Festival, an event that's as unpredictable as it is unique on the nation's concert map.

"You go out into the world, you discover, you open your eyes -- and wow!" said Cai, a conductor and Stanford music professor who founded the Pan-Asian festival in 2005. "The world is so colorful. You never close your eyes. I try to instill this feeling in my students."

At this year's festival -- the 10th annual, beginning Feb. 1 with a Chinese New Year's concert -- Cai will pair opera soloists from Mongolia with the Stanford Symphony Orchestra and Symphonic Chorus for a performance of Giuseppe Verdi's "Requiem" at Bing Concert Hall. The director of Stanford's orchestral studies program, Cai, 56, will conduct the Feb. 28 and March 2 performances. It's almost certainly a first: Opera singers from Mongolia singing the Latin text to Italian Verdi's "Requiem" with an American orchestra on a bucolic California campus.

An additional "Mongolian Gala" concert on March 1 includes 30 Mongolian performers -- not only opera singers, but ballet dancers and master throat singers who create sounds that "can shock you," Cai said with a grin. Before that, on Feb. 22, two concerts will feature the Tibetan Opera, Dance and Music Troupe of Qinghai, a 30-member ensemble that has never before visited the United States.

They also went on to co-author a book, "Rhapsody in Red," about the 400-year history of Western classical music in China. With their children, Sebastian and Cecilia, they have traveled throughout Asia, discovering music. In 2010, they found themselves in Ulan Bator, Mongolia's capital, visiting the Mongolian State Academic Theater of Opera and Ballet, which had been founded by the Soviets.

"It's very intimate," Melvin said. "It's like a family. It has 500 seats, and you go into the back and you smell borscht -- borscht and coffee. And they build their own sets, and there are little girls running around, little ballerinas. It's lovely, a wonderful place. And it's bitter cold outside, and the radiator is kind of burbling with the heat, and 250 people work there, absolutely devoted to the opera, putting on 28 productions a year, operas and ballets. They're amazing."

In 2012, Cai conducted "Carmen" there on a Saturday, "Swan Lake" on a Sunday. Taken with the place, he "volunteered for Mongolia from his heart," said Oyungerel Tsedevdamba, Mongolia's minister of culture, sports and tourism. Now, Cai is the theater's principal guest conductor -- he travels there between academic quarters -- and many of the artists coming to Stanford's festival are from the theater.

"The more you touch these different cultures," he said, "the more you feel rewarded by them and the more you want to know. During these past 10 years, through this festival, I have definitely learned a lot. It has been my own education."

Link to article

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Munkhdul Badral Bontoi

Founder & CEO


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