Legal dispute over EMC ownership comes to an end www.zgm.mn

(MCC) won over the Government of Mongolia at the Supreme Court for the second time yesterday. Thus, the property dispute over Erdenet Mining Corporation (EMC) between MCC and the Government that dragged on for two years finally came to an end. Earlier this year, the Cabinet decided to forcefully nationalize the 49 percent stake of EMC owned by MCC with its 7th resolution, which was followed by massive public backlash because the Supreme Court ruled against the Government on December 7, 2017. Therefore, the Government’s act has been confirmed unacceptable by several courts and the EMC board, which is fully formed by Cabinet members, was suspended. During the yesterday’s ruling, the Supreme Court revoked the Government’s 7th resolution on nationalizing EMC, resinstating the 49 percent stake of MCC. “With the Supreme Court's second ruling, the EMC will now be able to operate normally. We will now demand the Government to fulfill the court's decision and immediately hold the board meeting to address the facing issue as EMC is currently suspended by the international arbitration over a case involving the Government's share of 51 percent stake,” remarked Purevtuvshin Tsooj, CEO of MCC.

Erdenes Tavan Tolgoi revenue surges due to higher coal prices www.news.mn

Mongolia’s coal sector will see robust production growth over the coming years said Fitch Solution. The growth will be driven by rising prices, a solid project pipeline and competitive operating costs. They forecasted Mongolia’s production to increase to 107 million tonnes by 2027 from a mere 30 million tonnes in 2018. Growth in Mongolia’s coal sector will be largely driven by coking coal projects as the country boasts high quality reserves of the steel-making ingredient. As an example, in H118, revenues of the state-owned Erdenes Tavan Tolgoi (ETT) surged due to higher coal prices and a big jump in coal exports, raising prospects for a planned initial public offering (IPO). The project exported 6.9 million tonnes of coal in H118, up 28% compared to H117, while net profits increased 31% y-o-y to reach USD152 million. The government plans to list 30% of ETT through a combined domestic and overseas offering, the proposal of which is now under debate in parliament. If the Parliament approves the bill by the end of September 2018, the preparatory works of the IPO are set to be completed within 180 days.

Russia and Mongolian Border Crossing No. 487 www.news.mn

There are currently 10 operational border crossings between Mongolia and Russia: five open only to Mongol and Russian nationals, three open to all, one open to freight, and one to passenger trains.

World Economics reports that Mongolia’s employment rate hits a five-year high www.gogo.mn

World Economics reported that the sales managers’ index for Mongolia stood at 58.3 points in September, as it was in August.

USD hits record high in Mongolia due to higher imports www.china.org.cn

ULAN BATOR, Sept. 19 (Xinhua) -- The exchange rate of the U.S. dollar against Mongolia's national currency the Tugrik hit a new record high on Wednesday mainly because of higher imports.

Readout of Vice President Mike Pence’s Meeting with Prime Minister Ukhnaa Khurelsukh of Mongolia www.whitehouse.gov

Vice President Mike Pence met today with Prime Minister Ukhnaa Khurelsukh of Mongolia to reiterate the strong bilateral relationship between Mongolia and the United States. The two leaders discussed their newly expanded comprehensive partnership and the U.S. Millennium Challenge Corporation’s $350 million compact with Mongolia. The Vice President recognized the strong support that Mongolia has pledged to continue to provide to NATO’s Resolute Support Mission in Afghanistan and Mongolia’s continued enforcement of UN sanctions on North Korea. The two leaders also discussed other issues of interest, including opportunities for greater bilateral trade and investment. The Vice President thanked the Prime Minister on behalf of President Trump and the American people for Mongolia’s gift of $100,000 in camel hair blankets to those affected by Hurricane Florence.

Mongolia launches EU-funded projects to promote green development, environmental protection www.xinhuanet.com

ULAN BATOR, Sept.19 (Xinhua) -- Mongolia on Wednesday launched three projects funded by the European Union (EU) to promote green development and environmental protection in the landlocked East Asian country.

Coal exports from top shipper hobbled with miners facing constraints www.mining.com

(Bloomberg) — Coal exports from Indonesia will be restrained this year, which could frustrate a plan by the government to ease a burgeoning trade deficit while keeping prices elevated, according to an industry group.

Frontier's "Invest Mongolia Tokyo 2018" www.mongolianbusinessdatabase.com

Mongolian Business Database as the official supporting organization of Frontier Securities "Invest Mongolia Tokyo 2018" is pleased to invite you to this forum which will be held on November 19th 2018 in Tokyo and Invest Mongolia Ulaanbaatar will be in the first half of 2019 in Ulaanbaatar. Invest Mongolia is one the of the largest events on Mongolia, which serves as a platform of bringing in people from the Government, key industries' players, financial institutions, global investors and media houses attracting more than 1000 delegates where they get a chance to talk about several socio-political and economic development throughout the year. Please click the below links to know more details of the events.

U.S.-China Trade Tussle Is Creating Winners in Southeast Asia www.bloomberg.com

“No one wins from a trade war,” is a standard refrain among economists. Southeast Asian businesses are trying to prove that maxim wrong.

The region is capitalizing on a rush of new orders and production moves as firms reconsider their business in the U.S. and China amid a deepening trade war. About one-third of more than 430 American companies in China have or are considering moving production sites abroad amid the tensions, according to survey results released Sept. 13 by AmCham China and AmCham Shanghai. Southeast Asia was their top destination.

Vietnamese furniture producer Phu Tai Corp. is among those looking to cash in. The maker of home furnishings for Wal-Mart Stores Inc. outlets in the U.S. is planning for a 30 percent increase in its exports this year and in 2019, according to Deputy General Director Nguyen Sy Hoe. It’ll invest about $10 million to expand two factories at its base in Binh Dinh province and to upgrade production lines in two other factories in Dong Nai further south.

“We see this as a great chance to boost our exports to the U.S. as we’re getting more orders from that market,” Hoe said by phone Sept. 4. “Given the escalating trade war between China and the U.S., many American importers are switching to buy from Vietnam.”

The 10-economy bloc of the Association of Southeast Asian Nations, or Asean, is a natural magnet for new factories thanks to low production costs and well-trodden manufacturing plants, solid growth with the five biggest economies expanding at about 5.3 percent on average, and improving ease-of-doing-business rankings -- not to mention geographical proximity to China.

Hong Kong’s Trade Development Council recognizes Southeast Asia’s clout. Nicholas Kwan, research director of the territory’s statutory body that supports local firms, called Southeast Asia “an economic powerhouse” and pointed Hong Kong businesses to the bursting region as a safe haven amid trade-war tensions in a press conference Tuesday.

Nations like Cambodia and Vietnam are looking more attractive than ever for consumer-goods makers such as Steven Madden Ltd. and Tapestry Inc.’s Coach
Manufacturing powerhouses behind much of the world’s electronics are preparing to move chunks of production away from China and toward such locales as Eastern Europe, Mexico and Southeast Asia
Producer sentiment indicators around the world have shown negative impact from the tariffs on $50 billion in goods the U.S. and China have imposed on each other since July.

With another $200 billion in Chinese imports targeted and China announcing retaliatory tariffs against $60 billion of U.S. goods, trade-reliant Southeast Asia will also be exposed to that overall drag. But unlike many developed economies, the alternative production bases also stand to gain as companies shift orders to them to avoid levies.

Nguyen Thanh Phuong, chief executive officer of Kangaroo Group, a Vietnamese producer of home appliances, forecast a 10 percent increase in sales to the U.S. in the second half of 2018. His company has received orders from American clients who used to buy from Chinese makers, Phuong said in a Tuesday interview in Hanoi.

“The new U.S tariff is helping our products become more competitive against Chinese ones,” he said.

Koratak Weeradaecha, finance director for Star Microelectronics Thailand, also has noticed fluctuations in orders that correlate with the trade tensions -- first, a delay as some adjusted to new tariffs, he said in an Aug. 24 interview. Orders have now increased by at least 15 percent from 2017 and “we expect the trend to be more apparent later this year.”

“Orders came from companies that moved their production lines here, which helped boost the supply chain in Thailand,” said Koratak. “And we think there should be more as many companies should think about relocating their plants to neighboring countries, as staying in China may be too risky.”

Electronics manufacturers aren’t the only ones in Thailand bound for a boost. Malayan Banking Bhd. cites automobiles, seafood, rubber, and tourism all as markets that stand to benefit as Chinese goods become less attractive.

The Thai government agrees that the seafood sector will win amid the U.S.-China disputes, with those goods being targeted on both American and Chinese tariff lists, said Pimchanok Vonkorpon, director general for the commerce ministry’s trade policy and strategy office.

“Canned tuna should be a prime beneficiary sector,” she said.

Thailand makes up about 21 percent of China’s fruit imports, so that market stands to gain against U.S. competitors that hold an almost 8 percent share. Judging by the ability to offer substitute goods, Thailand is among the best-placed in the world to find opportunity amid the chaos, according to a July report from Krungsri Securities.

While companies have been reluctant to act prematurely on production shifts, there have been some scouting areas in Thailand as potential factory sites, Nattapol Rangsitpol, director-general of the Ministry of Industry’s Office of Industrial Economics, told reporters Aug. 28.

It’s a similar story in Malaysia. “We’ve got so many inquiries that our greatest problem is how to ramp up capacity,” including in electronics, steel production and automation from both China and the U.S., Malaysian Finance Minister Lim Guan Eng told reporters Sept. 13 in Hong Kong. “Once they come in it is very hard to pull out.”

Malaysia could see the benefits both as a trans-shipment point and because it’s a neutral country in which Chinese and American companies both would have an interest in investing.

Malaysian billionaire Robert Kuok’s Kerry Logistics Network Ltd. is seeing “numbers are looking up a bit more” as companies divert distribution centers from mainland China and into places like Hong Kong and Taiwan, and parts of Southeast Asia, according to the company’s chairman, George Yeo.

“They’re thinking of the next factory, and they’re less likely to put it in China,” Yeo, a former trade and foreign minister in Singapore, told Bloomberg Television Sept. 14. He acknowledged that some firms already were planning to move business to lower-cost manufacturing sites outside of China.

The complication of calculating aggregate benefits for some economies is evident in Malaysia, which could score wins in some areas while also taking a hit to its parts-makers that sell heavily to China. For now though, Southeast Asia is shaping up as the one region which may notch some gains as the U.S. and China exchange trade blows.

Vietnam has “more opportunities than challenges” from the U.S.-China trade tensions, Prime Minister Nguyen Xuan Phuc told Bloomberg Television in a Sept. 10 interview. The premier views the dramas as helping push Vietnam toward enhancing other trade relationships and embarking on domestic reforms to keep its development apace amid turbulent times.

— With assistance by Mai Ngoc Chau, Yudith Ho, Natnicha Chuwiruch, Enda Curran, Jeff Black, and Karl Lester M Yap