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Friday, October 21, 2011

[CPSI NewsWire: Mongolia Climbs 3 Spots to #86 in World Bank's Doing Business 2012 Report]

CPSI NewsWire brings you market updates on Mongolia, compiled by CPS International, a Mongolian marketing arm of CPS Securities, a Perth, WA based stockbroking and corporate advisory firm, specialising in capital raising for mining and junior stocks.

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See Mongolia related quotes at bottom of newsletter

 

Banpu stake in Hunnu now at 47.98% shares, 100% options

October 20, Hunnu Coal Limited (ASX:HUN) --

Link to release

Related: Credit Suisse holding in HUN rises to 6.53% from 5.1% - October 21

 

Mongolia Climbs 3 Spots to #86 in World Bank's "Doing Business 2012" Report

October 20 (World Bank) --

Overview

Doing Business 2012: Doing Business in a More Transparent World assesses regulations affecting domestic firms in 183 economies and ranks the economies in 10 areas of business regulation, such as starting a business, resolving insolvency and trading across borders. This year's report data cover regulations measured from June 2010 through May 2011. The report rankings on ease of doing business have expanded to include indicators on getting electricity. The report finds that getting an electrical connection is most efficient in Iceland; Germany; Taiwan, China; Hong Kong SAR, China; and Singapore. 

Key findings:

·         Morocco improved its business regulation the most compared to other global economies, climbing 21 places to 94, by simplifying the construction permitting process, easing the administrative burden of tax compliance, and providing greater protections to minority shareholders. Since 2005, Morocco has implemented 15 business regulatory reforms.

·         Besides Morocco, 11 other economies are recognized as having the most improved ease of doing business across several areas of regulation as measured by the report: the former Yugoslav Republic of MacedoniaSão Tomé and PríncipeLatviaCape VerdeSierra LeoneBurundi, the Solomon Islands, the Republic of Korea, Armenia, and Colombia.

·         The Republic of Korea was a new entrant to the top 10. 

·         Governments in 125 economies out of 183 measured implemented a total of 245 business regulatory reforms—13 percent more reforms than in the previous year. In Sub-Saharan Africa, a record 36 out of 46 economies improved business regulations this year. Over the past six years, 163 economies have made their regulatory environment more business-friendly. China, India, and the Russian Federation are among the 30 economies that improved the most over time. Read about reforms.

·         Singapore led on the overall ease of doing business, followed by Hong Kong SAR, China; New Zealand; the United States; and Denmark. View the rankings.

Link to Report page

Link to Full Report

Link to Mongolia profile page

 

BCM: OPEN LETTER TO MEMBERS OF THE MONGOLIAN PARLIAMENT AND THE GOVERNMENT

October 20 (Business Council of Mongolia) Since the signing of the landmark Oyu Tolgoi investment agreement with the Government of Mongolia, domestic and foreign partners have rallied to develop Mongolia's vast mineral resources.

On the basis of contracts that were negotiated in "good-faith," significant capital is being raised in global capital markets that will propel jobs and prosperity for all Mongolians.

This growth in addition to promising dramatic expansion of infrastructure, health, education and other services will provide job opportunities for generations of Mongolians.

We welcome the government's clear statement of support for the stability of the multi-billion dollar Oyu Tolgoi investment agreement.

Capital abhors insecurity and unpredictability, and the recent initiatives to renegotiate contracts and amend current law fails to recognize the damage that will be done to the reputation of Mongolia as an emerging market where a relatively progressive development and growth agenda have attracted wide-spread interest and investment.

When the OT agreement was signed in 2010, it was hailed by the investment community, both domestic and foreign, for the powerful signal that it communicated.

It affirmed the Government's "open for business" policy and it demonstrated Government and Parliament's willingness to amend laws ensure the commercial viability of mining projects.

Efforts to renegotiate Oyu Tolgoi, or any other project would undermine the country's efforts to build a reputation as a legitimate partner to business, both domestic and foreign.

Mongolia has begun cultivating a reputation as a sound and predictable place to do business, where risks and rewards are fairly allocated.

It is in the interests of the Mongolian people to carefully protect our reputation for trustworthiness.

The Business Council of Mongolia, on behalf of its 200 members employing tens of thousands of Mongolians, applauds the Government for reaffirming the stability of agreements into which it enters.

The BCM will mobilize all resources at its disposal to support the government to strengthen the rule of law and contribute to Mongolia's growing prosperity.

The Business Council of Mongolia

BCM Board of Directors:

Boroo Gold
Breakthrough PR
Erdene Resources Development
Just Group
Khan Bank
Leighton Asia
Lynch & Mahoney
Mandal General Insurance
MCS Group
MICC
Mongolian Star Melchers
Mongolyn Alt Corporation
Monnis International
Newcom Group
Oyu Tolgoi
Peabody Energy
Petro Matad
Pricewaterhouse Coopers
QGX Mongol
Rio Tinto
Sant Maral Foundation
South Gobi Resource
Tavan Bogd
Trade Trade & Development Bank

Link to letter

 

Cabinet to take measures against NEA deputy & MonAtom executive

October 21 (summarized from cabinet press release by Mogi) Cabinet regular meeting on Wednesday decided to take measures against Ts. Damdinsuren, the deputy head of Mongolia's Nuclear Energy Agency and R. Badamdamdin, the chief executive of "MonAtom" state owned company. Cabinet is not satisfied with the implementation and development of the sector since state policy on nuclear energy was established in 2006.

The head of the agency S. Enkhbat is in South Korea for medical treatment and cabinet members are not satisfied with how Damdinsuren is deputizing him.

Cabinet also blamed the slow development in the sector on lack of coordination between the regulator and company, and the leaderships' different stances on issues.

Link to press release (Mongolian)

 

Ukraine to learn possibility of joint coal production with Russia in Mongolia

October 19 (Kyiv Post) Kyiv, Moscow and Ulan Bator are to consider the prospects for joint coal production on the territory of Mongolia.

An instruction of Ukraine's Energy and Coal Ministry on the creation of a respective expert group dated October 12, 2011 has been posted on the ministry's Web site.

According to the document, the expert group will examine the possibilities for coal extraction in Mongolia and draft a proposition on Ukraine's participation in the trilateral project.

First Deputy Energy and Coal Minister Ihor Popovych will head the expert group, which will consist of representatives from departments of the Energy and Coal Ministry, the Ecology and Natural Resource Ministry, the Economic Development and Trade Ministry, the Foreign Ministry, and experts from organizations specialized in mine construction.

The expert group was formed by order of Ukrainian President Viktor Yanukovych for the implementation of agreements achieved during a state visit to Ukraine by President of Mongolia Tsakhiagiin Elbegdorj in June 2011.

Link to article

 

Mongolian, Japanese delegations discuss cooperation

October 20 (news.mn) Mongolian and Japanese delegations attending an international conference in Switzerland have meet to discuss future cooperation between the two countries.

Speaker D.Demberel, MPs B.Batbayar and S.Oyun, and Secretary General of Parliament's Office Ts.Sharavdorj are taking part in the 125th assembly of the Inter-Parliamentary Union (IPU), which is being held in Bern from October 16 to 19.

The Mongolians met with a Japanese delegation headed by the Speaker of Japanese House of Representatives, Takahiro Yokomichi. 

Takahiro Yokomichi thanked the Mongolian people for their assistance during this year's earthquake and tsunami disasters. He also noted the good development of both nations' parliaments, and underlined the complete partnership of the two countries.

Demberel thanked the Japanese people for their assistance during Mongolia's transition to democracy and a market economy. He noted Mongolia's active mining sector and urged Japanese investment in Mongolia, especially in the energy, infrastructure, and mining sectors. 

Takahiro Yokomichi said Japan is exploring the feasibility of investing in the Tavantolgoi mine, as well as other avenues of mutually beneficial economic cooperation.

Demberel said the Tavantolgoi and Oyutolgoi mines need investment for infrastructure and emphasized the two governments' cooperation and partnership. 

Link to article

 

Germany Looks to Mongolia to Secure Energy Future

October 20 (Coal Investing News) Last Thursday, German Chancellor Angela Merkel signed a resource trade agreement with her Mongolian counterpart in the Mongolian capital of Ulaanbaatar. Surrounded by a contingent of German industry leaders, the German delegates were eager to secure access to Mongolia's burgeoning mining economy, specifically its coal, rare earth elements and other commodities, in exchange for German technology and skills to support local mineral processing operations.

The talks were highlighted by a US $500 million 5 year coking coal mining contract establishing a joint venture between German BBM Operta Group  and Australian Macmahon Holdings (ASX:MAH) formalizing the deal made in late August of this year. The project is expected to begin operations at the Eastern Tsankhi area of the Tavan Tolgoi coal mine region next year, with 3 million tons (MT) per year of production expected in 2012 from the large-scale open cut pit. Production is projected to increase to 6 MT per year by 2013 and top out at 15 MT per year with further capital investments directed at developing mine and transport infrastructure.

With recent concerns over the risks involved in Mongolia's mining sector, a German government official told reporters in Berlin that Germany hoped a deal signed at the government levels would help individual companies enter contracts that would ensure access to materials.

Following the recent acrimony arising from some political posturing on the part of the Mongolian government, a number of analysts had raised red flags on mining investment in Mongolia. Despite this, Mongolia is fast becoming the next big mining jurisdiction, home to, among other things, the world's largest untapped coal deposit at Tavan Tolgoi.

In the fall out of domestic perceptions of exploitation by international mining companies, Merkel was explicit in her government's belief that the trade agreement would foment a "durable and equitable long-term relationship" between Germany and Mongolia. In particular, Macmahon CEO Nick Bowen said the coking coal contract was an "enormous opportunity in a market with great potential" in which Macmahon "expects will be the start of a long and rewarding presence in Mongolia."

Germany's energy future

Earlier this year, Germany took a bold step when it announced it would phase out nuclear power production in the country by 2022. Reacting to citizens' fears of a Fukushima-type event occurring within their borders, the country has since pushed toward meeting its growing energy demand from reliable and carbon-reduced options. Finding cheap ways to make this transition will be imperative as recent estimates have pegged the cost of decommissioning Germany's nuclear plants at close to US $24.5 billion (€18 billion), not including the cost of storing nuclear waste which could lift the cost close to US $43.5 billion (€32 billion).

In the short term, the transition appears likely to include some ramping up of coal-fired electricity production, though smaller than initial projections. With approximately 22 percent of its energy coming from bituminous coal and lignite and home Europe's largest electricity market, Germany is also the world's fourth largest consumer of coal.

Germany's coal importers group, VDKI, is currently projecting a 2 to 3 million ton increase of hard coal imports in 2011 despite a 9 percent decline in demand in the first quarter of the year on warmer winter weather.

In the longer run, finding ways to fill this nuclear gap with reliable and renewable energy sources was also one of the objectives for the trade agreement between Germany and Mongolia. Having secure and reliable access to rare earth elements—of which China produces more than 90 percent of rare earths—is critical for building turbines essential for wind power which is set to grow substantially as a source of electricity.

Currently, renewable energy provides 20 percent of German electricity, with aims of achieving 35 percent from renewable energy by 2020.

Coal has been on a downward trajectory as part of Germany's energy basket since the late 1980s (save a holding pattern during the first few years of the new century). As of recently, much of the continued political support for the coal industry rests upon clean coal technology. Without having an effective way to minimize carbon emissions from coal production, coal is likely to play an increasingly smaller role in German electricity production by the end of this decade should political aspirations come to roost.

Securities Disclosure: I, James Wellstead, hold no direct investment interest in any company mentioned in this article.

Link to article

 

Petroleum shortages reported in Gobi-Altai aimag

October 21 (news.mn) Darvi, Khukhmorit, and Bayan-Uul soums of Gobi-Altai aimag have been experiencing fuel shortages since October 10. There are reports of price gouging, as some residents buy large quantities of fuel from neighboring soums to sell at inflated prices in the affected areas.

Some residents of Khukhmorit soum are also complaining that a petroleum station there has hoarded its fuel supply to sell at inflated prices. 

The shortage is due in part to the State Specialized Inspecting Agency's closure of some petroleum stations in the area for selling poor quality fuel.

Link to article

 

Proposal would partially privative state-owned utilities

October 21 (news.mn) On Thursday, Parliament discussed an amendment to the energy law passed in 2001. Members approved further discussion. If passed, the amendment would allow private investment in the energy sector. 

Currently the state spends about MNT 15 billion annually to subsidize the energy sector. The amendment would convert the sector into a market-based system and end the state subsidies altogether from 2014. 

MPs approved expanding the number of members of the Energy Committee to Energy Council from three to five. Three members will be appointed by the Government and two will come from representatives of producers and consumers.

MPs asked about construction of power plants in Oyutolgoi and Tavantolgoi. According to information from Mineral Resources and Energy Minister D.Zorigt, Mongolian specialists are preparing the technical and economic aspects of the Oyutolgoi plant with assistance from the German firm Siemens, and electricity transmission lines to Umnugobi aimag are half finished. 

G.Bayarsaikhan reminded MPs that some khoroos of the Chingeltei district of Ulaanbaatar still do not have electricity and said electric rates should not be dependent on politics. He opposed the amendment. 

Link to article

 

Government meeting discusses draft law on press freedom

October 20 (news.mn) At the Government meeting on Wednesday, members discussed a draft law on press freedom that was submitted by President Ts.Elbegdorj, and they approved further discussion of the draft law in Parliament. 

The President's Advisor, Ch.Sosormaa, told our correspondent that the draft would be revised by a working group, particularly those provisions dealing with arrest and punishment in cases of libel, dishonor, and defamation. Instead of imprisonment, some members preferred fines or community service. On the other hand, members also said journalists should work ethically and understand their obligations. 

Link to article

 

Mongolian PM pledges to speed up efforts in achieving MDGs

ULAN BATOR, Oct.18 (Xinhua) -- Mongolian Prime Minister Sukhbaatar Batbold pledged Tuesday that his country will speed up efforts to achieve the Millennium Development Goals (MDGs).

Batbold made the pledge while meeting Helen Clark, visiting director general of United Nations Development Program (UNDP). He said the Mongolian government is committed to developing economy, raising the country's per capita gross domestic product (GDP), increasing jobs and constantly improving the living standards of the Mongolian people.

He reassured that every Mongolian is benefiting from the country's booming mining sector through human development fund set up by the government.

Clark, the UN official, said Mongolia could use its rich natural resources as a tool to further promote manufacturing and export, and improve social benefits. She also proposed that the Mongolian government could jointly establish working group with the UNDP Mongolia office to carry out the Millennium Development Goals.

During her visit, Clark also met MPs of Mongolian parliament as well as representatives of some NGOs on poverty elimination and progress made in achieving MDGs.

Link to article

 

UN Official Urges Resource-rich Nations To Wisely Manage Revenues

ULAN BATOR, Oct 20 (Bernama) -- United Nations Development Programme chief Helen Clark on Thursday urged resource-rich countries to wisely manage their revenues from the natural treasures to avoid the resource curse, Xinhua news agency reported.

While exports of fuels and minerals are very significant for some developed countries, the vast majority of natural resource exporters are in the developing world, she told an international conference here.

These countries should manage their revenues from resources in a transparent, inclusive and sustainable way, she said.

While the extraction of mineral resources can bring about great benefits, it also has been a curse for a number of resource-rich countries where the exploitation of natural resources has often been associated with economic mismanagement, growing inequality, corruption, political instability and conflict, warned Clark, who is also UN under secretary-general.

Mongolia is still in the early stage of extractive industry development, which allows time for Mongolia to design policies to avoid the resource curse, she said.

Mongolian Prime Minister Sukhbaatar Batbold told the same conference that his country has achieved all-round development by wisely using its mineral revenues.

Lots of funds were used in agriculture in the past three years to boost grain output, he said, adding that Mongolia is expected to be able to meet all its domestic staple food demand by the end of 2011.

A human development fund set up by the Mongolian government has also received revenues and royalties from the mining industry to support education and other social services.

The conference entitled "Avoiding the Resource Curse: Managing Extractive Industries for Human Development" focused on the phenomenon that certain underdeveloped countries rich in natural resources have failed to grow more rapidly than those without substantial resources.

It attracted representatives from some 17 countries.

Link to article

 

MONGOLIAN EMBASSY OPENS IN ITALY

Ulaanbaatar, Mongolia, October 19 /MONTSAME/ In Italy, the Embassy of Mongolia has opened in Rome. The ceremony took place on Tuesday being attended by the President of Mongolia Ts.Elbegdorj.

There was a growing need for Mongolia to have its Embassy in Italy because the ties and collaboration in agriculture, sciences, education, culture and arts have been developing rapidly along with an increase in a number of Mongolian students and residing there Mongolians.

As expected, the Mongolia-Italy relationship and cooperation will now strengthen, besides, Mongolia will take full advantage of the opportunity to widen ties with Rome-based Food and agriculture organization of UN, World food programme, International fund for agricultural development and other international organizations.

The Foreign affairs Minister of Italy Franco Frattini told his Mongolian counterpart G.Zandanshatar that he will in all possible ways support activities of Mongolia's Embassy. 

Link to article

 

Mongolian, Italian officials sign agreements

October 19 (news.mn) As part of his official visit to Italy, President Ts.Elbegdorj took part in signing ceremonies in Rome on Tuesday.

Mongolian Minister for Food, Agriculture and Light Industry T.Badamjunai and Italian Minister for Economic Development P.Romani signed a memorandum of cooperation in agriculture. 

SME Development Foundation Director M.Bayarmagnai and Massimo D' Aiuto, CEO of the Italian foreign investment organization SIMEST, signed a memorandum of cooperation in investment.

Mongolian Meat Production Union President L.Ganpurev and E.M.Arozio, president of Assefoodtech Ltd. of Italy, signed a memorandum of cooperation on the sale and purchase of equipment for food production.

Managing officials of the Mongolian University of Technology and representatives of the University of Turin signed a memorandum of cooperation. 

During the signing ceremony, Italian Minister for Economic Development P.Romani said that Italy and Mongolia have the possibility to cooperate in the mining, infrastructure, and agriculture sectors. He noted that Italy has exceptional technology and Mongolia has exceptional raw materials. 

Link to article

 

President proposes establishing fish farms in Mongolia

October 19 (news.mn) President Ts.Elbegdorj called on the head of the Food and Agriculture Organization (FAO) of the United Nations, Jacques Diouf, at FAO headquarters in Rome on Tuesday.

Diouf congratulated Elbegdorj on his successful visit to Italy and recalled his own visit to Mongolia.

Elbegdorj thanked Diouf for receiving him and noted the results of cooperative efforts between Mongolia and the FAO. The FAO has implemented projects and programs worth some USD 9 million in Mongolia since 1974.

Elbegdorj told Diouf that Mongolia would like to export wheat and animal products to Asia and the Pacific region, and he asked for the FAO's assistance in that regard. Elbegdorj also said Mongolia would like to host the next meeting of the FAO's Asia and Pacific branch, so the country can demonstrate its agricultural export possibilities.

Elbegdorj also suggested establishing fish farms in Mongolia, because the country has many clear rivers and lakes.

Diouf supported the president's suggestion and said he would take time to study all the issues raised in the meeting. He added that the FAO is preparing its plan for the next four years, and that the president's requests and suggestions would be taken into consideration.

Link to article

 

Mongolia, DPRK seek education cooperation

ULAN BATOR, Oct. 19 (Xinhua) -- Mongolia and the Democratic People's Republic of Korea (DPRK) had agreed to pursue cooperation in education, Mongolian official press said Wednesday.

An agreement was signed by the Mongolian National University and Kim Il Sung University on student exchanges and cooperation in education.

The agreement came during a visit by Kim Il Sung University President Song Ja Rip, who is also minister of higher education and chairman of the DPRK-Mongolia Friendship group in the DPRK People's Assembly.

Song met Damdin Tsogtbaatar, state secretary of the Mongolian Ministry of Foreign Affairs and Trade, to discuss cooperation in the education sector.

Mongolia forged diplomatic relations with the DPRK in 1948. Hundreds of DPRK citizens currently work in Mongolia's construction, garment industries and agricultural sectors.

Link to article

 

GLOBAL CRISIS 2011/12 - THE POTENTIAL IMPACT ON THE MONGOLIAN PROPERTY SECTOR

WILL WE SEE A REPEAT OF THE 2009/10 CRISIS OR IS MONGOLIA NOW IN A BETTER POSITION TO WEATHER THE INTERNATIONAL STORM?

AS THE WORLD SEEMS TO, YET AGAIN, SLIP INTO A GLOBAL RECESSION, WE LOOK AT THE POTENTIAL IMPACT THIS COULD HAVE ON THE MONGOLIAN PROPERTY MARKET AND ITS SUBSEQUENT ATTRACTIVENESS TO FOREIGN INVESTORS

October 20 (M.A.D. News) The Mongolian Property Sector is currently under threat from two separate fronts, the first is increasingly similar to the 2009/2010 commodity crisis which impacted the Mongolian real estate market rather considerably. Not only did foreign investors reduce or completely halt their investments into Mongolia (on which the Mongolian economy was entirely reliant) but as the western world descended into recession, it reduced exports from China which in turn drove down China's need for basic mineral commodities from Mongolia but also globally reduced commodity prices due to a sudden lack of demand, therefore drying up new mining investments. A serious financial crisis in China, which could lead to a weakening of its real estate market would create a pan-regional domino effect which would, in turn, severely impact Mongolia.

As if the concerns of an impending global recession were not enough to worry potential investors, the current levels of political bickering and nationalistic sentiments amongst the Mongolian population are setting a dreadful precedent (or maybe a reminder) of the constant underlying threat of political instability. As we approach the parliamentary elections (June 2012), it is likely that we will see an increasing number of anti-foreign public initiatives from parliament members desperately seeking marginal votes in a bid to clinch to power and the lucrative opportunities this presents. A clear and recent example of such a position was the sudden, and very public, declaration that the Mongolian state wished to renegotiate the OT agreement. While this was swiftly reversed, it has resulted in a serious blow to the international reputation of Mongolia.

Mongolia's insistence to develop its railway infrastructure towards politically relevant Russia and its sea ports rather than business oriented China thus making Mongolian commodity export considerably less profitable, has been a disappointment to foreign mining investments. The Khan Resources uranium license case, the rejection of the Tavan Tolgoi bidders (previously publicly announced by the government as a done deal) in addition to the current nationalistic positions towards OT and foreign investments can only send negative signals to those investors who are becoming increasingly risk-averse and frustrated of Mongolian politics.

During the previous crisis, the property sector was impacted in various degrees. Practically all construction projects in the city halted and while prices only dropped by an average of 20% across the city, liquidity dropped dramatically with very few transactions taking place. This only changed after Oyu Tolgoi started significantly investing in Mongolia, thus signalling to the foreign investment community that Mongolia was once again a desirable global investment location.

Mongolia's overall economic position today is only slightly improved from where it was in 2009. The country has had the chance to grow its economy over the last year (14% YoY GDP Growth), it has secured and started the Oyu Tolgoi development, improved fiscal policies as well as foreign reserves and has managed to marginally diversify its economy but the country has, on the other hand, become more reliant on foreign debt, increased its trade deficit and is burdened with high inflation as well as high (unofficial) unemployment rates.

Over the course of 2011, the Mongolian Property market not only recovered remarkably well but increased levels of foreign investments kept pushing up capital growth and rental prices as Mongolia became the media darling of the world; an attractive story in an otherwise gloomy world.

The current growth in the UB property market is very much linked to the burgeoning emerging middle class purchasing property on the back of the rapidly increasing wage levels across the capital. Should the global crisis take a considerable turn for the worst, foreign investment will most certainly slow down over the coming 8 months of winter, wage levels may thus drop as fewer companies hire aggressively and may in turn lead to a drop of consumer confidence in property. This is in contrast to the recent announcement from the Mongolian Government of a 53% rise in public servant wages and pensions, if this is followed through, it is inevitable that inflation will rise further and we may well start witnessing the onset stages of the infamous "Dutch Disease".

However, the fundamentals of the real estate market are still extremely solid, the country is guaranteed a relatively safe future double digit GDP growth based on the existing levels of foreign investment through the commitments that mines such as OT have already made, therefore feeding the construction and mining supply chains.

The current levels of FDI enjoyed by the Mongolian government are not solely reliant on the exports of minerals but rather on the long-term development of those mega-mines that take generally a few years to bring to production and require enormous up-front capital and human investments. This thus means that even if there are no significant new numbers of expats relocating to Mongolia, the current residents are here to stay and will keep renting apartments.

Ulaanbaatar itself keeps witnessing considerable levels of urbanisation as nomads leave the countryside to seek their fortunes (or more often – survival) in the capital, adding to the already considerable demand pool for low-to-mid end residential properties in the city. Lets not forget that over half of the city inhabitants still reside in the traditional nomadic tents known as gers.

This demand, in addition to the increasing number of high-net-worth Mongolians investing in the property sector regardless of global economics, as well as those private investors that strongly believe in the future potential returns of Mongolia over those of more established western economies is most likely to keep fuelling demand across the city centre. In addition to which there is a very real "shadow FDI", essentially private and very discreet foreign investment, mostly from China, that invests across the board in all types of assets regardless of economic logic.

It is also highly likely that large foreign institutional investors realise the opportunities afforded in a market with strong fundamentals and invest heavily in existing built properties to make the most of the situation without carrying construction risks, thus, while new developments may slow down, the prices of existing properties may keep rising.

In addition to growing demand, supply of new properties in the city keeps dwindling as scarce land becomes increasingly expensive and both skilled labour and construction materials are constantly diverted towards the Eldorado of the south Gobi and its enormous mining projects.

As mortgages in Mongolia are still too expensive to be attractive to a vast majority of the population (less than 10% of Real Estate purchases in Mongolia are mortgaged), there is little risk of a true collapse in the industry as widespread foreclosures are impossible in a cash driven market.

With the typical seasonal drop in demand over the winter months combined with the increasing uncertainty over politics and the state of the global economy, it is possible that general property prices may stagnate over the winter months with a potential small dip within some sectors of the capital but a price drop would only be short lived as the summer of 2012 will no-doubt bring renewed investment to the country's mining sector (probably post-election) supported by, it is hoped, a more stable global economy. We furthermore expect to see a number of dedicated property funds launching their operations by mid-2012 who are, in turn, likely to single-handedly raise prices across the board.

Suburban areas such as Zaisan and the stadium areas are most likely to see a noticeable drop in prices while the Star Apartments area, the CBD and the State Department Store / Ulaanbaatar Department Store areas are most likely to see continued growth.

It is essentially clear to those on the ground, that, despite repeated setbacks, Mongolia has firmly set itself on a path towards extraordinary growth and, pending a catastrophe, shows no signs of slowing down in the near future.

Link to article

 

Move One Relocates HQ In Mongolia

October 19 (LogisticsWeek, source: Move One) Move One is pleased to announce the relocation of our Mongolia HQ to a new address, a larger more prestigious address that meets the requirements of an expanding workforce and allows for further augmentation and increases the capacity and range of services already available to international clients in the area.

Located in the Sukhbaatar district of downtown Ulan Baatar, overlooking the business heart of the city, the facility continues to allow for unparalleled levels of coordination, tracking, and customer service throughout the region. The office will continue to coordinate operations in Move One's secure warehouse to the West of the capital. The combination of direct, on-site management and extensive logistics facilities has positioned Move One as a key player in Mongolia's industrial development. In addition to becoming the frontrunner in regional  freight-forwarding and logistics services, Move One has also become instrumental in developing  international trade and political relations between the US and Mongolia.

Mongolia has some of the world's biggest untapped reserves of gold, coal and uranium, including the Oyu Tolgoi project, a mineral deposit so large that it is could produce a third of the worlds copper. This and other mega-scale projects  in Mongolia has attracted foreign investors to the regions rugged and often remote locations, who have since come to rely on Move One's local expertise. Speaking about the new offices and expanded regional capabilities, Move One's Country Manager Noah Glasco said that "…It will allow us to concentrate our administrative, tracking and sales activities at a core location, closer to our client base in order to maximize customer service. Combined with the capabilities of our newly opened warehouse we are now in an even stronger position to provide our comprehensive range of services to an ever expanding customer base."

Link to release

 

China rare earths giant halts output as prices fall

SHANGHAI, October 19 (AFP) — China state-linked Baotou, the world's largest rare earth producer, said it has halted output for a month from Wednesday as the country seeks to boost prices of the sought-after commodities.

China produces more than 95 percent of the world's rare earths -- 17 elements critical to manufacturing everything from iPods to low-emission cars -- and its moves to dictate production and exports have caused an outcry from major trading partners.

An official at Inner Mongolia Baotou Steel Rare-Earth (Group) Hi-tech Co. Ltd (Baotou) called the production stoppage temporary. Baotou operates the world's largest production base for rare earths, according to its website.

"Production should resume in a month as it is just a provisional measure," the official, who declined to be named, told AFP. He added the company called a similar month-long halt in May 2008.

In a statement earlier this week, the Shanghai-listed company said it would halt supplies of raw materials to its processing units for a month to "stabilise the market and balance supply and demand".

The move marks the second time in as many months that Baotou has sought to boost rare earth prices.

Last month, it bought praseodymium-neodymium oxide -- one of its own rare earths products -- from other companies at above market prices to "protect resources and maintain market stability", the company said.

Average prices for rare earth oxides have fallen more than 20 percent in the past three months, the China Daily newspaper said Wednesday.

Speculation sent prices soaring in the first half of the year but the market has since retreated, with analysts blaming excess inventory caused by slowing demand amid the global economic turmoil.

Beijing has angered trade partners by restricting overseas shipments of rare earths, in a bid to burnish its green credentials and tighten its grip over the metals.

In May, the State Council, or cabinet, said it would prohibit any increase in production capacity for existing projects to separate rare earths from crude ores and stop review of applications to explore for new mines.

It also urged large state firms to accelerate industry consolidation and severely punish unapproved exports of rare earths.

Investors reacted negatively to the latest news on Wednesday, sending Baotou's stock price down 3.98 percent to 45.61 yuan ($7.2) in morning trade, even as the overall market rose.

Link to article

 

Table: Mongolia Related Stocks (Source: Bloomberg)

 

Name

Symbol

$

Price

Change

+-%

Open

High

Low

Volume

Time

% YTD

% 12 m

Indices

ASX 200

AS51:IND

4,144.90

-68.8003

-1.63%

4,203.20

4,203.20

4,135.40

-

20-Oct

 

 

Nikkei 225

NKY:IND

8,682.15

-90.3896

-1.03%

8,733.60

8,733.60

8,672.21

-

20-Oct

 

 

Hang Seng

HSI:IND

17,983.10

-326.121

-1.78%

18,198.12

18,198.12

17,782.00

-

20-Oct

 

 

FTSE 100

UKX:IND

5,384.68

-65.8101

-1.21%

5,450.49

5,450.49

5,363.16

-

20-Oct

 

 

TSX Composite

SPTSX:IND

11,830.33

-19.1699

-0.16%

11,794.34

11,898.44

11,697.53

-

20-Oct

 

 

S&P 500

SPX:IND

1,215.39

5.51001

0.46%

1,209.92

1,219.53

1,197.34

-

20-Oct

 

 

ASX

Aspire Mining

AKM:AU

A$

0.385

-0.025

-6.10%

0.41

0.41

0.385

1,230,176

20-Oct

-19.79%

133.33%

Blina Minerals

BDI:AU

A$

0.014

-0.001

-6.67%

0.014

0.015

0.014

677,000

20-Oct

-6.67%

0.00%

C@

CEO:AU

A$

0.071

0.003

4.41%

0.068

0.074

0.063

2,326,026

20-Oct

153.57%

373.33%

General Mining

GMM:AU

A$

0.135

-0.02

-12.90%

0.135

0.135

0.135

15,000

20-Oct

12.50%

-12.90%

Guildford Coal

GUF:AU

A$

1

-0.04

-3.85%

1.015

1.055

0.99

446,794

20-Oct

36.99%

78.57%

Haranga Resources

HAR:AU

A$

0.2

-0.005

-2.44%

0.2

0.205

0.195

164,500

20-Oct

-68.75%

 

Hunnu Coal

HUN:AU

A$

1.78

0.005

0.28%

1.77

1.78

1.77

1,105,039

20-Oct

33.33%

100.00%

Mongolian Res Corp

MUB:AU

A$

0.26

0

0.00%

0.25

0.26

0.25

0

30-Sep

 

Robe Australia

ROB:AU

A$

0.014

-0.001

-6.67%

0.014

0.014

0.014

422,653

20-Oct

49.73%

TVN Corp.

TVN:AU

A$

0.051

0.001

2.00%

0.05

0.051

0.05

3,202,007

20-Oct

410.00%

628.57%

Voyager Resources

VOR:AU

A$

0.098

-0.007

-6.67%

0.099

0.105

0.097

14,366,014

20-Oct

82.75%

174.13%

Xanadu Mines

XAM:AU

A$

0.4

-0.04

-9.09%

0.43

0.43

0.38

254,366

20-Oct

-29.20%

0.00%

HKEx

Solartech Int'l

1166:HK

HKD

0.227

-0.019

-7.72%

0.255

0.265

0.217

38,578,500

20-Oct

-76.35%

-81.39%

Winsway

1733:HK

HKD

2.16

-0.04

-1.82%

2.2

2.2

2.13

5,523,000

20-Oct

-51.94%

-38.67%

SouthGobi Resources

1878:HK

HKD

55.5

-2.3

-3.98%

56.1

60.5

55.05

28,800

20-Oct

-44.22%

-41.88%

China Gold

2099:HK

HKD

22.5

-1.15

-4.86%

23

23

22.35

24,800

20-Oct

-46.43%

CNNC Int'l

2302:HK

HKD

1.85

0

0.00%

1.81

1.85

1.77

1,002,000

20-Oct

-78.74%

-73.03%

Real Gold Mining

246:HK

HKD

8.86

0

0.00%

8.86

8.86

8.86

0

20-Oct

-34.28%

-35.33%

Mongolia Energy

276:HK

HKD

0.58

-0.03

-4.92%

0.6

0.6

0.57

7,710,000

20-Oct

-75.00%

-81.41%

Zijin Mining

2899:HK

HKD

2.85

-0.2

-6.56%

2.99

2.99

2.76

39,206,544

20-Oct

-39.58%

-41.53%

Mongolia Inv Group

402:HK

HKD

0.048

-0.002

-4.00%

0.049

0.049

0.047

6,962,000

20-Oct

-67.57%

-71.26%

North Asia Resources

61:HK

HKD

0.46

-0.02

-4.17%

0.48

0.49

0.46

407,600

20-Oct

-49.45%

-69.93%

China Daye Non-Fer.

661:HK

HKD

0.425

0.025

6.25%

0.4

0.425

0.4

2,838,000

20-Oct

-24.11%

-12.37%

Bestway Int'l

718:HK

HKD

0.044

0.001

2.33%

0.041

0.044

0.041

80,000

20-Oct

-68.79%

-70.86%

Asia Coal

835:HK

HKD

0.112

0

0.00%

0.112

0.112

0.112

90,000

20-Oct

-55.20%

-55.02%

Mongolian Mining

975:HK

HKD

6.7

-0.32

-4.56%

6.87

7.02

6.69

1,447,475

20-Oct

-26.13%

-27.09%

SGX

LionGold

LIGO:SP

SGD

0.86

0

0.00%

0.865

0.865

0.855

9,905,000

20-Oct

17.81%

104.76%

LSE

Central Asia Metals

CAML:LN

GBp

67.5

-0.5

-0.74%

67.5

67.5

67.5

0

20-Oct

-25.21%

-26.8293

Petro Matad

MATD:LN

GBp

28

-0.25

-0.88%

28.25

28.25

28

127,500

20-Oct

-77.05%

-80

Metal-Tech

MTT:LN

GBp

5.5

0

0.00%

5.5

5.5

5.5

10,546

20-Oct

-64.52%

-63.3333

Origo Partners

OPP:LN

GBp

30.25

0

0.00%

30.25

30.25

30.25

660

20-Oct

-26.22%

-12.3188

North

America

Aberdeen Int'l

AAB:CN

CAD

0.62

-0.03

-4.62%

0.63

0.64

0.6

140,983

20-Oct

-23.33%

15.71%

Blue Zen Mem. Parks

BZM:CN

CAD

0.16

0

0.00%

0.16

0.16

0.16

0

18-Oct

Centerra Gold

CG:CN

CAD

20.44

0.02

0.10%

20.05

20.71

20.03

592,954

20-Oct

5.23%

16.37%

China Gold

CGG:CN

CAD

3.01

-0.1

-3.22%

3.14

3.17

3

167,613

20-Oct

-44.57%

-39.92%

Denison Mines

DML:CN

CAD

1.34

0.09

7.20%

1.25

1.35

1.23

2,079,375

20-Oct

-60.70%

-40.18%

Denison Mines

DNN:US

USD

1.32

0.12

10.00%

1.2

1.33

1.19

2,388,416

20-Oct

-61.40%

-40.27%

East Asia Minerals

EAS:CN

CAD

0.56

-0.1

-15.15%

0.66

0.66

0.56

539,600

20-Oct

-93.03%

-91.66%

Entree Gold

EGI:US

USD

1.53

-0.03

-1.92%

1.56

1.6

1.52

27,526

20-Oct

-55.78%

-44.16%

Erdene Resource

ERD:CN

CAD

0.42

-0.06

-12.50%

0.48

0.48

0.41

234,500

20-Oct

-66.13%

-6.67%

Entree Gold

ETG:CN

CAD

1.57

-0.03

-1.88%

1.6

1.6

1.56

23,639

20-Oct

-54.76%

-44.33%

Fortress Minerals

FST:CN

CAD

4.4

0

0.00%

4.4

4.4

4.4

0

19-Oct

1.15%

12.82%

Garrison Int'l

GAU:CN

CAD

0.03

0

0.00%

0.03

0.03

0.03

0

17-Oct

-66.67%

-45.45%

Gulfside Minerals

GMG:CN

CAD

0.09

0

0.00%

0.09

0.09

0.09

0

18-Oct

-5.26%

-30.77%

Green Tech Solutions

GTSO:US

USD

0.129

0.011

9.32%

0.118

0.13

0.111

177,522

20-Oct

-96.78%

Ivanhoe Energy

IE:CN

CAD

1.32

0.01

0.76%

1.31

1.34

1.28

143,060

20-Oct

-51.47%

-40.81%

Ivanhoe Energy

IVAN:US

USD

1.31

0.01

0.77%

1.3

1.31

1.26

324,372

20-Oct

-51.84%

-40.45%

Ivanhoe Mines

IVN:CN

CAD

16.66

-0.15

-0.89%

16.3

17.29

16.3

1,297,657

20-Oct

-27.57%

-26.49%

Ivanhoe Mines

IVN:US

USD

16.45

-0.04

-0.24%

16.16

17.01

16.05

1,976,269

20-Oct

-28.23%

-25.59%

Kincora Copper

KCC:CN

CAD

0.32

-0.025

-7.25%

0.32

0.32

0.32

6,323

20-Oct

18.52%

113.33%

Khan Resources

KRI:CN

CAD

0.26

0

0.00%

0.26

0.265

0.26

0

19-Oct

-45.83%

-30.67%

Long Harbour

LHC:CN

CAD

0.12

0

0.00%

0.125

0.125

0.12

0

19-Oct

 

14.29%

Lucky Strike

LKY:CN

CAD

0.7

0

0.00%

0.7

0.7

0.69

6,000

20-Oct

-51.72%

366.67%

Lucky Strike

LKYSF:US

USD

0.6845

0

0.00%

0.6845

0.6845

0.6845

0

11-Oct

-51.76%

Meritus Minerals

MER:CN

CAD

0.04

0.005

14.29%

0.04

0.04

0.04

55,000

20-Oct

-80.00%

-89.47%

Manas Petroleum

MNAP:US

USD

0.19

0

0.00%

0.18

0.19

0.18

16,833

20-Oct

-68.33%

-59.57%

Mongolia Growth Group

MNGGF:US

USD

4.413

-0.0045

-0.10%

4.413

4.413

4.413

1,000

20-Oct

Blue Wolf Mongolia

MNGL:US

USD

9.58

0

0.00%

9.59

9.61

9.58

0

14-Oct

Blue Wolf Mongolia

MNGLU:US

USD

10.2

0

0.00%

10.2

10.2

10.2

0

19-Oct

Manas Petroleum

MNP:CN

CAD

0.18

0

0.00%

0.18

0.18

0.18

0

11-Oct

Prophecy Coal

PCY:CN

CAD

0.51

0

0.00%

0.53

0.53

0.49

228,514

20-Oct

-41.02%

-23.40%

Prophecy Coal

PRPCF:US

USD

0.541

0

0.00%

0.526

0.541

0.48

14,100

20-Oct

-38.66%

-17.51%

Puget Ventures

PVS:CN

CAD

0.49

0

0.00%

0

17-Sep

SouthGobi Resources

SGQ:CN

CAD

7.3

-0.09

-1.22%

7.5

7.5

7.26

28,824

20-Oct

-40.07%

-40.75%

Solomon Resources

SRB:CN

CAD

0.075

-0.005

-6.25%

0.075

0.075

0.075

7,500

20-Oct

-65.12%

-77.27%

Wedge Energy

WEG:CN

CAD

0.015

0

0.00%

0

3-Aug

 

 

Mongolia Growth Group

YAK:CN

CAD

4.5

0

0.00%

4.5

4.5

4.5

1,080

20-Oct

 

 

 

---

"Mogi" Munkhdul Badral

Senior Client Manager / 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.

 

Get well soon, Mel!

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