Three TAXES to increase starting MAY 1 www.gogo.mn

Parliament of Mongolia approved amendments to the 2017 State budget, with proposed tax increases last week in accordance with the Staff-Level Agreement between Mongolia and International Monetary Fund on Three-Year Extended Fund Facility. In regards, following tax increases will take effect on May 1, 2017. 
VEHICLE EXCISE TAX
Majority or the 75-86 percent of vehicles registered in Mongolia are outdated and more than 10 years old, causing negative impacts on the environment and increasing amount of air pollution.
Therefore, the tax rebate for hybrid vehicles, LPG-fueled vehicles, and electric vehicles is set to be decreased by 50 percent while excise taxes on vehicles will be increased depending on the engine capacity and aging. 
For instance, excise taxes on vehicles with engine size less than 4500 sm³ will be added by 3-15 percent and vehicles with engine size more than 4501 sm³ will be added by 40-250 percent. 
Thus, vehicle excise tax revenue expects to increase MNT 33.8 billion and reach MNT 57.3 billion. 
INTEREST REVENUE WILL BE TAXED
Interest income on personal savings accounts will be taxed from May 1, 2017. Previously, it was said to be imposed on only owners of savings more than MNT 100 million. However, it was decided to be applied to all owners of savings. 
Owners of savings will pay 10 percent of taxes on their interest income. 
Thus, it expects to increase budget revenue as follows;
MNT 43 billion in 2017, 
MNT 67 billion in 2018, 
MNT 70 billion in 2019. 
CUSTOMS TAX ON IMPORTED TOBACCO WILL BE INCREASED
Customs tax on imported tobacco is now at 5 percent. Minister of Finance noted that the customs tax on tobacco is lower than limits set by the World Trade Organization and it shall be increased up to 30 percent. Therefore, customs tax on imported tobacco will be increased by 30 percent. 
Thus, it expects to increase state revenues approximately by MNT 20 billion in 2017, MNT 26 billion in 2018 and MNT 27 billion in 2019.

Iron ore price in free fall www.mining.com

The Northern China import price of 62% Fe content ore slumped again on Monday to trade down 3.7% at $64.60 per dry metric tonne according to data supplied by The Steel Index.

US Energy Secretary worried about coal www.mining.com

In a memo issued late Friday to his chief of staff, the US Energy Secretary Rick Perry expressed concerns about the diversification of power sources and the stability of the country’s grid.

Mongolian basketball team became Asian University 3x3 Basketball Champion www.gogo.mn

Mongolian basketball team became a champion of the third edition of Asian University 3x3 Basketball Championships, which was held in Malaysia during April 12 to 16, 2017. 
Mongolian team won over the Philippines by 21:14 and Iran by 21:14 in group matches. Moreover, they battled against Indonesia in the quarter-final and won with 16:14 scores.
Mongolian team won a gold medal after beating China with 17:13 in the finals match. 
Also, player Naranbaatar won the title in the dunk contest. 
In the first edition of the Asian University 3x3 Basketball Championships 2015, the Mongolian team placed second and China won titles in their home. 
In the second edition which was held last year, Mongolia settled for a silver medal again and China became the champion.

EU project to help Mongolia to export honey products www.montsame.mn

Ulaanbaatar /MONTSAME/ A team of an EU project “Support to the Modernization of Mongolia's Standardization System” has worked in Selenge aimag on April 12-13. The team was composed of project team leader Henk De Pauw, expert Andre Francois and other members. Their mission of the Selenge working tour was to assist with exporting honey and honey products made in Selenge aimag to the European Union.
The project team met with B.Munkhtur, Director of Food and Agricultural Department of Selenge province to exchange views on research works of exporting honey products to the European Union.
Moreover, the team visited some honey farms of Shaamar soum and co-held workshop on “Exporting honey products to the European Union” in cooperation with the Governor's Office and Food and Agriculture Department of Selenge province. The workshop was attended by over 100 honey farmers came from Suhkbaatar, Zuunburen, Shaamar, Tsagaanuur and Eruu soums of the province.

Mortgage Corporation’s special purpose entity to release securities www.montsame.mn

Ulaanbaatar /MONTSAME/ On April 13, the Financial Regulation Commission (FRC) granted a financial activity license to ‘MIC Active Twelve Months”, a special purpose entity established by the "Mongolian Mortgage Corporation“ company last August and registered its securities. 
‘MIC active twelve months” company is releasing mortgage loan guaranteed securities of 2.7 million with nominal value of MNT100 000 and 30-year term. The Commission assigned the two companies to insure the loan package for long term and in accessible way, meeting the interest and demand of the insured.
During its meeting, FRC resolved 30 issues, including merger approval of “Standart Agriuculture Group” LLC to “Uujimkhangai” JSC, “Anumargad erdene nonbanking financial institution”LLC to “Diamond capital nonbanking financial institution” LLC, “Tuusjam nonbanking financial institution” LLC to “Ashivtuvshin finance nonbanking financial institution” LLC. The commission also granted licenses to five nonbanking financial institutions and 8 savings and credit cooperatives.

Land farmers meet to discuss 2017 goals www.montsame.mn

Ulaanbaatar /MONTSAME/ During his opening speech at the National Symposium of Land Farmers which took place last Friday, April 14, P.Sergelen, Minister of Food, Agriculture and Light Industry informed that 458 thousand ha land will be cultivated for sowing in 2017.

Steel, stimulus drive China's strongest economic growth since 2015 www.reuters.com

China's economy expanded faster than expected in the first quarter as higher government infrastructure spending and a gravity-defying property boom helped boost industrial output by the most in over two years.

Growth of 6.9 percent was the fastest in six quarters, with forecast-beating March investment, retail sales and exports all suggesting the economy may carry solid momentum into spring.

But most analysts say the first quarter may be as good as it gets for China this year, and worry Beijing is still relying too heavily on stimulus and "old economy" growth drivers, primarily the steel industry and a property market that is showing signs of overheating.

"The Chinese government has a tendency to rely on infrastructure development to sustain growth in the long term," economists at ANZ said in a note.

"The question we need to ask is whether this investment-led model is sustainable as the authorities have trouble taming credit. We need to watch closely whether China’s top leadership will send a stronger signal to tighten monetary policy shortly."

Even as top officials vowed to crack down on debt risks, China's total social financing, a broad measure of credit and liquidity in the economy, reached a record 6.93 trillion yuan ($1 trillion) in the first quarter -- roughly equivalent to the size of Mexico's economy.

At the same time, spending by the central and local governments rose 21 percent from a year earlier.

That helped goose the pace of growth in the first quarter well above the government's 2017 target of around 6.5 percent, and pipped economists' forecasts of 6.8 percent year-on-year.

Such a strong bolt from the gate could see Beijing once again meet its annual growth target, even if activity starts to fade later in the year, as many analysts widely expect.

"Main indicators were better than expected...which laid a good foundation for achieving the full-year growth goals," statistics spokesman Mao Shengyong said at a news conference.

SAME OLD GROWTH DRIVERS?

Once again, China's policymakers leaned on infrastructure and real estate investment to drive expansion in the first quarter. Growth in both areas has accelerated from last year and helped offset slightly weaker growth in the services sector.

"Faster growth in industrial output is the primary factor in the first quarter surprise, and due mostly to higher value-added growth related to supply-side consolidation in heavy industry," said Brian Jackson, China economist at IHS Global Insight.

Real estate investment also remained robust in the first quarter, expanding by 9.1 percent on-year, and the pace of new construction quickened despite intensifying government measures to cool soaring prices.

Most analysts agree the heated property market poses the single biggest risk to China's economic growth, but predict the cumulative weight of property curbs will eventually temper activity, not produce an outright crash.

"Sales have started falling, which means tightening measures are starting to take effect," said Shen Jianguang, an analyst at Mizuho Securities in Hong Kong, noting that will start to drag on both the services and construction sectors.

More than two dozen cities announced new or additional property cooling measures in March and early April, after curbs late last year appeared to have little lasting effect.

Buoyed by a near 12 percent increase in housing starts, China produced a record amount of steel in March, Reuters data showed, though analysts say warning signs are flashing.

Rising inventory levels and recent falls in steel prices suggest output has been growing faster than China's actual demand, raising worries of a glut later in the year, which could heighten trade tensions with the U.S. and its other major trading partners.

INCOME GROWTH PICKS UP

There were also positive signs on the consumer front in Monday's data dump.

After slowing for five quarters, disposable income growth picked up to 7.0 percent in the first quarter, the fastest since the end of 2015.

Auto sales also showed signs of recovering after weakening in the first two months of the year after the government reduced subsidies on small cars.

Analysts are closely watching for signs that consumption is accounting for a greater share of China's economy, which would

not only make growth more resilient and broader based but also reduce the need for more debt-fueled stimulus and reliance on "smokestack" industries.

FOCUS ON STABILITY, THEN REFORMS

Though policymakers have pledged repeatedly to push reforms to head off financial risks and asset bubbles, the government is seeking to keep the economy on an even keel ahead of a major leadership transition in later this year.

China's central bank has gingerly shifted to a tightening policy bias in recent months, and is using more targeted measures to contain risks in the financial system, after years of ultra-loose settings.

It has bumped up interest rates on money market instruments and special short- and medium-term loans several times already this year and further modest increases are expected, especially if U.S. rates continue to rise.

"I think China should be directing the economy to slow down its growth in the long term...but on the contrary, growth is accelerating," said Hidenobu Tokuda, senior economist at Mizuho Research Institute in Tokyo.

"This is good for now but it makes it difficult to see how China's economic slowdown will land in the future. Uncertainties remain high."

(Reporting by Kevin Yao and Yawen Chen; Writing by Elias Glenn; Editing by Kim Coghill)

China's Ant Financial raises offer for MoneyGram to $1.2 billion www.reuters.com

Mitsui & Co. bets big on former Rio Tinto CEO www.asia.nikkei.com

Resource magnate Sam Walsh becomes Japanese company's external director

TOKYO -- Japanese trading house Mitsui & Co. stunned the market by announcing on March 22 that Sam Walsh, who just stepped down as chief executive officer of British-Australian mining giant Rio Tinto last July, will become its external director in June.

Walsh spent about twenty years in the auto industry after graduating from university, and held senior roles with General Motors and Nissan Australia. He joined Rio Tinto in 1991.

Walsh served as head of Rio Tinto's core iron ore division between 2004 and 2013 before becoming CEO. He slashed costs by adopting Toyota Motor's kaizen, or continuous improvement, production system and Japanese construction machinery maker Komatsu's driverless trucks. That helped Rio Tinto weather the plummeting resource prices in 2015 and 2016, which put other resource giants in significant difficulty.

Mitsui, which logged its first net loss after posting an impairment loss in the resource business in the year through March 2016, is pinning big hopes on Walsh's extensive experience. Market players are also looking to Walsh's capital policy.

Walsh rejected a takeover bid for Rio Tinto from Swiss-based commodities giant Glencore while CEO in 2014. Around that time, he also increased shareholder payouts. Rio Tinto generated a positive operating cash flow of $8.5 billion and spent $3.6 billion on dividends and stock buybacks for the year through December 2016.

As CEO he was also responsible for bolstering the company's financial standing to better cope with fluctuating commodity prices. S&P Global Ratings' last summer revised its outlook on Rio Tinto from "negative" to "stable" and affirmed its A- long-term credit rating. Instead of boosting shareholder payouts with financial leverage, he focused on liabilities, shareholders' equity and cash flow in a balanced manner.

Akifumi Hayashi, senior analyst at Mizuho Securities, said Walsh is an excellent manager, not only because he turned around the business, but also because of his disciplined allocation of capital. Market watchers expect that his stance toward capital policy and expertise will have a positive impact on Mitsui's management.

Mitsui is expected to formulate a new dividend and capital policy when it releases its medium-term management plan in May. The company's earnings and shareholder payouts have been subject to commodity prices, as it has determined the latter based on free cash flow.

Mitsui's decision to cut dividends for the year ended March was also a disappointment to market players. If Walsh's expertise can help Mitsui stabilize its earnings and shareholder payouts, market evaluations may change for the better.

Australian media reported that Rio Tinto has been under investigation on corruption charges for a mine interest in Guinea. Mitsui stressed there is no evidence that Walsh has any involvement. The focus is now on what kind of role Walsh will play at Mitsui after obtaining approval at the annual shareholders' meeting in June.