Mongolian Foreign Affairs Minister D.Tsogtbaatar met with the Acting CEO of the Millennium Challenge Corporation (MCC) Jonathan Nash and other officials to finalize the Second Compact Agreement.

The MMC funding will be spent on a project to increase the Ulaanbaatar water supply and the parties are ensuring preparation to establish the agreement during a bilateral high-level meeting.

The first MCC compact was a five-year USD284.9 million agreement and six projects were implemented in 2008-2013, designed to increase economic growth and reduce poverty by investing in property rights, health, vocational education, energy and environment and transportation.

Although the active public participating in the stock market trade is favorable, their short-term investment strategy leads to price volatility, said analysts. Several companies are expected to issue an IPO this year. The analysts predict that the limited purchasing power of the public could slow IPOs in the primary and secondary market. The analysts said that foreign and domestic investors and social foundations should involve in the stock market.

At the conclusion of the visit, Mr. Gottlieb remarked “Macro-economic performance under the program remains positive, with all quantitative targets met. Fiscal results in the first quarter of 2018 have been much better than expected with a 21-percent improvement in revenues. Net international reserves improved by USD 200 million over the same period.

On fiscal policy, Mr. Gottlieb highlighted that the authorities’ program for 2018 envisages continued budgetary restraint and strengthening tax administration. In addition, the authorities are taking concrete steps to improve public financial management particularly with respect to concessions, public investment projects, and the operations of the Development Bank of Mongolia.

“In the financial sector, the authorities are moving ahead with the strengthening of the banking system as part of the follow-up to the recently completed Asset Quality Review. Banks that are undercapitalized will have until end-December to raise capital. A law that sets out, under appropriate conditions, when public funds can be used to stabilize banks is expected to be passed shortly. The authorities are also moving ahead with reforms that will allow for more rapid NPL resolution and strengthening banks’ balance sheets,” emphasized Mr. Gottlieb.

The IMF underlined that it is critical to maintain progress in building reserves to help insulate the economy from external shocks. “Sound macro-economic policies accompanied with structural reforms of the banking system will help durably reduce interest rates,” recommended the IMF in its report.

KEY DRIVERS:

Driven by strong external demand, Mongolia’s economy continues to recover; key macro- economic goals, including to reduce the fiscal deficit and boost international reserves, have been achieved.
This progress notwithstanding, risks to the program remain, including lower external demand for commodities, a slowdown in structural reforms, rising domestic spending pressures, and adverse changes to the investment climate.
To safeguard the program’s continued success, the focus should remain on strengthening the banking system, ensuring a prudent fiscal policy, remaining vigilant against inflation, building foreign exchange buffers, and improving public financial management.

Maternity goods firm Shanghai Aiyingshi Co. and incubator firm Ningbo David Medical Device Co. both surged by as much as the 10 percent daily limit. Beingmate Baby & Child Food Co. climbed as much as 5 percent in Shenzhen on a day of muted moves in China’s stock markets, while Guangdong Qunxing Toys Joint-Stock Co. advanced. Even piano makers enjoyed a boost, with Hailun Piano Co. and Guangzhou Pearl River Piano Group Co. advancing.

"The removal of birth limits won’t necessarily bring about a baby boom, so it’s likely a speculative trade that won’t last long," said Zhang Gang, Shanghai-based strategist with Central China Securities Co. "Big funds wouldn’t want to engage in such short-term trades, and the sector is just not big enough to handle the inflows."

China’s cabinet is looking at what might happen if the country ended its roughly four-decade-old policy, said people who asked not to be named while discussing government deliberations. The country is facing the prospects of a rapidly aging population and has had to deal with criticism from foreign governments over its family-planning policies.

Baby-related stocks in Japan also rose, with Pigeon Corp., Unicharm Corp. and Nippon Shokubai Co. adding at least 2 percent. Chinese tourists are known to go on shopping binges for high-quality consumer products on trips to countries like Japan.

The benchmark Shanghai Composite Index slipped 0.4 percent as of 11:06 a.m. local time.

During the meeting, the sides reciprocally affirmed that they are for Mongolia-US partnership relations based on common values and strategic interest and shared views on regional and international cooperation matters, the second MCC compact that Mongolia’s government is working to establish with the US Millennium Challenge Corporation as well as other issues.

The same day, the Minister visited the John Hopkins University and delivered speech on ‘Changing world: changing roles of small countries’ and answered to interested questions about Mongolia’s foreign policy and the latest process in the region.

The event brought together about 80 attendants including scholars and researchers of US scientific and research institutes, students and representatives of public organizations and embassies in Washington D.C.

M.Unurzul

Speaking at the Mongolia Economic Forum on Tuesday, Arnaud Soirat, the head of Rio’s copper business, said Mongolia had all ingredients to become a “successful resource nation” but only if it honoured agreements around issues such as tax and royalty payments.

“The world is watching how Oyu Tolgoi develops. It is a test case for future investment in Mongolia which brings with it jobs, new business opportunities and community development,” he told delegates, including government ministers.

A resource-rich nation of just 3.1m people, Mongolia desperately needs foreign direct investment. Last year, the country, which is sandwiched between China and Russia, turned to the International Monetary Fund for a bailout as bond payments loomed.

Rio is currently the largest foreign investor in Mongolia. It has ploughed more than $7bn into the first phase of the Oyu Tolgoi. It is planning to spend a further $5.5bn on developing an underground mine that will unlock the project’s full potential.

But these plans are under threat. Earlier this year, the cash strapped government hit Rio with a $155m tax bill, while members of parliament have set up a working group to review the agreements that underpin the development of the Oyu Tolgoi mine.

Analysts say much of the frustration with the contracts can be traced to the government’s decision to take a 34 per cent equity stake in Oyu Tolgoi. To finance its share of the mine’s development costs Ulan Bator has had to borrow money from a Rio subsidiary. Until that debt is paid off it cannot receive dividends.

“Protecting agreements and honouring contracts is critical – particularly in mining where time horizons are long and upfront investment is massive”, said Mr Soirat. “When agreements and contracts are honoured – it gives international investors’ confidence the same will be done for them.”

Mr Soirat also touched on the tax row in his speech, saying that resource-rich countries like Mongolia should aim “to foster dispute resolution mechanisms and forums that yield fair and fact-based results.”

Rio has said it will take the tax dispute to international arbitration if it cannot reach agreement with the government.

“Mongolia has all the ingredients to become a successful resource nation and to use her mineral revenue to fuel sustainable, long-term, diversified growth,” said Mr Siorat. “But the three things I talked about are critical: a safe and secure climate for investment… adherence to the rule of law… and a clear signal to the world about the value of doing business here in Mongolia.”

The floating nuclear power plant will take on board a supply of nuclear fuel and will then be towed to Pevek, a small town in the Far Eastern region of Chukotka. The port of Pevek, which is located in Russia’s extreme northeast, is separated from the US state of Alaska by the 86-km (53 mile) wide Bering Strait.

The power plant is set to start providing electricity for homes as soon as in 2019, replacing a coal-powered plant and an old nuclear power plant that provides electricity to more than 50,000 people in the region.

According to Rosatom, small sea-borne power units are best suited for remote areas. The plants may help to reduce greenhouse gas emissions, which are blamed for global warming. Power plants of this kind are able to operate without stopping or the need for refueling for up to five years. The vessels were created to make it possible to supply electricity to hard-to-reach regions of the huge country.

However, green campaigners have raised some concerns over the risk of nuclear accidents. Greenpeace has dubbed Akademik Lomonosov the “nuclear Titanic.” Various environmental protection groups sent Rosatom a letter, calling for full and unrestricted regulatory oversight of the vessel. The floating power plant will not just generate electricity for Pevek, it will be used for oil and gas exploration as Russia is pushing development further north into the Arctic.

The deal would mean Sony would indirectly own about 90% of the record label and its some two million songs by artists from Queen and Carole King to Alicia Keys and Pharrell Williams.

Sony said it was thrilled with the deal, which is subject to approval.

The announcement comes as Sony prepares to unveil its mid-term plan on Tuesday.

EMI, which has its headquarters in London, is currently owned by a consortium led by Sony. It is one of the world's biggest music publishing firms. Sony already owns 2.3 million music copyrights, including the Beatles catalogue.

The Japanese tech giant's deal, announced on Tuesday with the Abu Dhabi-based investment firm Mubadala, will mean EMI will become a consolidated subsidiary of Sony.

Mubadala's private equity arm has controlled and managed EMI Music Publishing on behalf of Mubadala and other third-party investors since 2012, Sony said on Tuesday. Before that, EMI was owned by Citigroup.

"We are thrilled to bring EMI Music Publishing into the Sony family and maintain our number one position in the music publishing industry," Sony's president and chief executive Kenichiro Yoshida said on Tuesday.

Mr Yoshida said the music business had enjoyed a resurgence over the past couple of years, driven largely by the rise of paid subscription-based streaming services.

"In the entertainment space, we are focusing on building a strong IP portfolio, and I believe this acquisition will be a particularly significant milestone for our long-term growth," he said.

Changes ahead
Later on Tuesday Sony is expected to unveil a three-year plan to move away from making any more gadgets and towards a bigger focus on gaming subscriptions and entertainment.

Earlier this month the firm bought a stake in Peanuts, the company behind Charlie Brown and Snoopy.

The deal to buy up a controlling stake in EMI is very much part of Sony's plans to realign its business, analysts said.

In April, it reported a net income of 380bn yen for last year, a seven-fold increase on 2016.

Almost all of its divisions saw an improved performance, but the PlayStation unit was a particular standout - it saw sales jump almost 300%.

Sony's former chief executive Kazuo Hirai handed the reins over to then-finance chief Kenichiro Yoshida earlier this year.

Mr Yoshida and Mr Hirai were instrumental in turning Sony around to focus on smartphone image sensors.

Under their efforts, the Japanese electronics giant also sold off its struggling PC business and launched the successful PlayStation 4 video game console.