Mongolia- Economic Fundamentals

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Mongolian Securities Clearing House and
Central Depository Co., Ltd
www.schcd.mn
mendjargal_at_schcd.mn
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Mongolia
Highlights Total area 1,566,500
sq.km Population 2.7 million Capital city
Ulaanbaatar Governance parliamentary
republic Monetary unit tugrug (11420T) GDP
US 2,100 per capital Economy market economy,
centered on mining and agriculture Climate four
seasoned Sunshine 200 days Temperature -31C
50C (in Jan. in Gobi)
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Economy grew in 2008

• GDP Growth at constant price
• (in thousand US Dollars )
• Source National Office of Statistics

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What is the impact of the financial crisis on
Mongolia?

• The Current Economic Situation
• State budget deficit
• In June 2009, the Bank of Mongolia (BoM) reduced
  its policy rate to 11.5 .
• Banks froze its lending.
• Exchange rate, tugrug has fallen against US
  Dollar..
• High inflation in Jan 2009 (fuel and food price
  led to record high inflation- 33.7)

• Impact through
• Drop in copper price
• Possible delays in the development of mining
  operation because of tightened international
  financial condition
• Limited private sector exposure to foreign
  financial resources
• Shortage on foreign currency (US Dollar)

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Mining contribution is substantial
in Mongolias export revenue
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Global price of Mongolias main exports have
fallen back to the 2004 levels
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Way to Development

• The 1997 Law opened - foreign direct investment
  (FDI) in mineral and petroleum exploration.
• The exploration has resulted in the discovery of
  world class mineral projects.  
• Proven and probable reserves of Oyu Tolgoi - 930
  million tonnes. Containing
• grade percent of copper
  - 0.50
• gold - 0.36g/t
  recoverable copper - 8.9 billion pounds
• gold - 7.6 million
  ounces

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Securities market in Mongolia

• 1991 Establishment of Mongolian Stock Exchange
  by the decision of Government.
• A voucher worth of 10,000 tugrugs was given to
  every citizen for exchange of shares of newly
  privatized state owned enterprises.
• 1995 Establishment of secondary market and 29
  broker firms were privatized.
• Securities depository and settlement operation
  was a part of the MSE until 2003.

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Securities market in Mongolia
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Market Participants

• Mongolian Stock Exchange - fully state
• owned joint stock company
• Securities Clearing House and Central
• Depository state owned LLC
• Total of 376 issuing companies.
• since 2000, delisted - 81 companies
• newly added - 48 companies
• Securities companies - 44
• Broker, dealers - 30
• Underwriters 14
• with foreign investment - 12
• Investors 441,124
• Individuals - 440,420 foreign 576
• Entities - 704 foreign - 63

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100 state owned Securities Clearing House
and Central Depository Co., Ltd

• Features of MSCHCD
• In 2003, MSCHCD was established
• 100 dematerialized securities
• Trade for trade settlement system
• Main operation of MSCHCD
• Securities safe-keeping
• Registration of stocks and bonds
• Book-entry transfer of securities and cash
• Securities settlement and payment according to
  MSE trade execution and non-exchange transaction

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Income and Expense Transaction

• 4.7 bln shares with market capitalization of
  320.1 mln USD are safe kept at the Central
  Depository by June 2009.
• By the end of 2008, volume of bond was 900,000
  shares, since then this number hasnt been
  changed.

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Trade information

• Government bond was released in 2007, for
  financing the contraction of public housing. It
  influenced in the increase of income
  transaction.

• In 2007, the fund income transaction reached
  173.2 million USD, but in 2008, the value of
  income transaction reduced to 74.6 million USD.

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Action taken by the House

• Computer linkage with securities companies
• To reduce manual work and cost
• To reduce operational risks
• Media release
• To improve knowledge on securities market among
  public
• To provide fair and fast information
• Organizing seminars
• Organize trainings among interested parties
• Provide latest updates promptly and safely

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THANK YOU FOR YOUR ATTENTION
Presentation by Mendjargal Orosoo
Researcher, Settlement and Risk Management
Department MSCHCD Co., Ltd Contact
address Sukhbaatar Square 2
Ulaanbaatar, Mongolia Phone 976
50887052 Facsimile 976-70114424 Website
www.schcd.mn E-mail mendjargal_at_schcd.mn
info_at_schcd.mn