Mongolbank Governor meets World Bank Country Director www.montsame.mn

Ulaanbaatar/MONTSAME/ On August 7, Governor of the Bank of Mongolia N.Bayartsaikhan met representatives headed by Mr. Bert Hofman, World Bank's Country Director for China, Mongolia and Korea in the East Asia and Pacific Region, based in Beijing.

MBD (B2B) Business offers # 17 www.mongolianbusinessdatabase.com

www.mongolianbusinessdatabase.com is the number 1 ranking B2B portal site on Google's "Mongolia business or/and Business Mongolia" search according to the business visitors access from appx 90 countries as of today (Google analytics report).

Cooperation in steel production discussed with Sinosteel Corporation www.montsame.mn

Ulaanbaatar /MONTSAME/ The representatives of Sinosteel Corporation, one of the world’s major steel producers, visited the Erdenes Mongol LLC and got acquainted with its operations.

Mongolia’s immigration officials visit South Korea www.akipress.com

Delegates led by D. Murun, Chairman of Mongolia Immigration Agency, paid an official visit to Seoul, the Republic of Korea from July 29 to August 1 at the invitation of Korea Immigration Service of the Ministry of Justice, Montsame reports.
Alongside seeing activities of Korea Immigration Service, the delegates held several official meetings and exchanged views on multilateral issues, including expansion of further cooperation and improvement of travel conditions of people.

BoM Vice President meets authorities of Mongolian Gold Producers' Association www.montsame.mn

Ulaanbaatar /MONTSAME/ Vice President of the Bank of Mongolia (BoM) B.Lkhagvasuren held meeting with representatives of the Mongolian Gold Producers' Association (MGPA) within the framework of the ‘National Gold to the Fund of Treasures’ campaign.

Nearly 30,000 people opened brokerage accounts since beginning of 2018 www.gogo.mn

In the first seven months of 2018, roughly 30,000 individuals and entities opened brokerage accounts. The Mongolian Central Securities Depository reported that domestic citizens account for 99.7 percent of the new brokerage account holders, while foreign citizens make up 0.21 percent of the total share. The number of newly-opened brokerage accounts quadrupled compared to the same period in 2017.

Taiwan's export to Mongolia increases two times www.montsame.mn

Ulaanbaatar /MONTSAME/ As of the first five months of 2018, Taiwan exported goods worth USD 4.9 million to Mongolia. Thus, the country’s export volume raised by USD 3.8 million or 2.25 times compared to total export of 2017, reports the Taipei Trade and Economic Representative Office in Ulaanbaatar.

Mongolia launches campaign to disinfect livestock www.xinhuanet.com

ULAN BATOR, Aug. 6 (Xinhua) -- Mongolia has launched a campaign to disinfect all livestock to prevent animal diseases, Minister of Food, Agriculture and Light Industry Batjargal Batzorig said Monday.

Alibaba merging China food delivery units to counter Tencent-backed Meituan - sources www.reuters.com

HONG KONG (Reuters) - Alibaba Group (BABA.N) plans to merge its food delivery units and raise funds for the combined business, intensifying a battle with Tencent-backed Meituan Dianping for dominance of China’s booming on-demand services market, four people told Reuters.

The Alibaba units to be merged include food delivery platform Ele.me and food and lifestyle services firm Koubei, the people said. Alibaba is looking to raise between $3 billion and $5 billion for the combined entity, said one of the sources. The entity could be valued at up to $25 billion, said another.

A Hong Kong-based Alibaba task force is working on the merger and fundraising for the combined entity, according to two of the people.

Alibaba’s units and Meituan, backed by social media and gaming giant Tencent Holdings (0700.HK), are fighting for supremacy in China’s buoyant online-to-offline (O2O) market where apps link smartphone users with bricks-and-mortar businesses to provide local food delivery and other offerings.

“Alibaba and Meituan are the two main companies that can offer comprehensive O2O services,” said Mo Jia, a Shanghai-based research analyst with technology consultancy Canalys. “Alibaba’s three units are complementary to each other and it has strategic logic to merge them into one platform to compete with Meituan.”

One of the people said the fundraising was expected to launch later this year. The person said the new unit would also include Alibaba’s Hema Fresh, a chain of cashless supermarkets offering fresh produce and food delivery.

Alibaba, which also handles media queries for Koubei and Hema, declined to comment. A spokesman for Ele.me denied the merger and fundraising plan. All the people declined to be named as the information is confidential.

The value of O2O transactions in China jumped 72 percent last year to $146 billion, according to Chinese research firm Analysys.

According to a June report by Chinese research firm iiMedia Research, Ele.me and Baidu Waimai, which Ele.me acquired a year ago, held a combined 55 percent of China’s food delivery market in the first quarter compared with Meituan’s 41 percent.

China’s biggest ride-hailing firm Didi Chuxing also entered the fray in April launching its own food delivery service.

Meituan Dianping is expected to raise more than $4 billion when it floats in Hong Kong in the coming months. Last year the company was valued at $30 billion in a fundraising round.

In April, Alibaba bought the shares it did not already own in Ele.me in an all-cash deal that valued the startup at $9.5 billion. The e-commerce giant and its financial affiliate Ant Financial Services Group previously owned a 43 stake in the business, whose name roughly translates to “Hungry?”.

Koubei, founded in 2015 as a 50-50 joint venture of Alibaba and Ant Financial, had a valuation of $8 billion at the end of 2017, according to a list of unicorns published by a unit under China’s Ministry of Science & Technology in March. Silver Lake, CDH Investments, Yunfeng Capital and Primavera Capital joined as investors in a January 2017 funding round.

Ant Financial declined to comment.

There are no publicly available numbers for Hema, which was founded two years ago as part of Alibaba’s retail push and now operates more than 60 supermarkets in 13 cities in China, according to its website.

Coal miners to see improved finances: BMI www.mining.com

A new report by BMI Research states that despite coal being an increasingly targeted commodity on environmental protection grounds, the demand remains strong due to the economic aspect of the fossil fuel and therefore producers will see improving financials over the coming years.

According to BMI, major coal miners have already displayed positive financial performance in FY2017 and H118, aided by the significant rally in coal prices and better management strategies. In the researcher’s view, this trend is likely to go on.

“For instance, the world’s largest coal miner China Shenhua Energy's net debt to EBITDA decreased from 1.0x in FY2015 to 0.2x in FY2017. US coal miner Peabody Energy Corp’s net debt to EBITDA also decreased substantially from 40.7x in FY2016 to 0.1x in FY2017 after the company filed for chapter 11 bankruptcy in 2016 and streamlined its operations. While not a dedicated coal miner, diversified miner Glencore with significant exposure to coal and a reputation of prioritising coal at a time when others are exiting the industry continues to lower its debt load. The company's net debt reduced to $10.7 billion in FY2017 compared to $15.5 billion in FY2016. The company's debt to EBITDA ratio is at a multi-year low of 2.7x,” the report reads.

BMI suggests that Asian producers will continue to outperform in terms of financial gains due to proximity to demand markets and availability of deposits, while producers in western countries including the United States and Europe will face increasing costs and greater environmental scrutiny.

In its outlook, BMI considers that although times are tempting for miners to resume aggressive acquisitions amid better performance and a pickup in coal prices, it is not expected that they will increase capital expenditures significantly. “This is because as a group, coal miners are still low on free cash flow although firms including China Shenhua, Coal India and Adaro Energy that have substantially better balance sheets distort the total. Compared to a total of $11.8 billion spent on capex in FY2016 by the top 33 coal mining companies on Bloomberg's top coal mining competitive peers Index, spending got reduced to $9.6 billion in FY2017,” the firm’s document states.

In this context, it is expected that capex for most coal miners will mostly be spent on sustaining existing operations, innovation to improve operational efficiency, and expanding growth assets as minimal investment in greenfield projects will continue.

This is particularly the case for US miners, who will see cost inflation become a larger challenge because it will eat into margins. In Q118, the three largest US coal miners, including Cloud Peak Energy and Arch Coal, reported higher y-o-y costs per tonne, citing higher fuel costs, repairs, and lower volumes sold.

According to BMI, Chinese miners will also be at a disadvantage despite the weakening Chinese yuan that will work to offset some losses. “For instance, production costs, including transportation, depreciation and tax, jumped 11% on average to about CNY272/tonne of coal mined in FY2017 at China Shenhua Energy, China Coal and Yanzhou Coal. Costs at midsize Chinese mines rocketed by 17% to about CNY328/tonne of coal mined in FY2017 according to Bloomberg. Additionally, increasing mine-safety and emissions standards as per the country's strict adherence to environmental targets and substantial compensation payments to displaced workers of mine closures will continue to plague the sector,” the forecast concludes.