Plans devised by Mongolia’s government to partly privatise the frontier market’s stock exchange have been years in the making. The head of the exchange now says that plan could finally be realised within months and, if successful, will touch off even larger initial public offerings (IPOs).

The Mongolian Stock Exchange (MSE), fully state-owned since its inception in 1991, could float up to 34% of its shares by the end of the year, chief executive officer Altai Khangai said in a Zoom call. The remaining 66% would remain in government hands, controlled by the Ministry of Finance.

Mongolia sold off many of the assets held by the state during its communist era, mostly food producers and textile companies, during a messy wave of privatisation in the 1990s. Citizens at the time received vouchers to purchase shares of companies; many sold them on to young entrepreneurs who went on to become some of the country’s wealthiest oligarchs.

Still, many of Mongolia’s largest state-owned enterprises (SOEs), including the national airline, mining assets and the stock exchange, remain under government control, even after repeated attempts to take them public.

Altai believes the long-overdue IPO of the MSE is imminent. “This time it’s serious, previously we had hypothetical talks but this time it’s serious and it’s under way,” he said.

Parliament and the cabinet have approved the plan to privatise the exchange, said Altai. Next up for the bourse is to submit its prospectus to the Financial Regulatory Commission.

“It's advancing rapidly. Now we are selecting the auditors and the underwriters,” said Altai, who has led the exchange twice, firstly from 2011 to 2014 and now since 2016. “We have to go public this year, [and be] 34%-listed.”

Javkhlan Ivanov, chief operating officer at the MSE, said she expects the exchange’s prospectus will be submitted to the Financial Regulatory Commission (FRC) by the end of November or early December. An approval by the FRC is the final step before the shares can be listed.

Previous attempts to float shares of the MSE involved the London Stock Exchange Group but were never realised. In 2012, London helped the Mongolian bourse migrate to the MillenniumIT trading platform. The pair later coordinated on other technology and regulatory development.

The exchange has a market cap of $1.6bn and average daily trading of around $700,000. In September, it was approved for inclusion in the Frontier Index by the FTSE Russell. Credibility was also boosted in 2018 with the addition of the first cross-listed company, Nova Scotia-based junior miner Erdene Resources Development Corp. (TSX: ERD), which also trades on the Toronto Stock Exchange.

Peter Akerley, Erdene’s CEO, said the cross-listing has allowed the gold miner to become more open to the Mongolian public, through the issuance of press releases and periodic reports in dual languages. Erdene has raised $6mn on the MSE and amassed 6,000 Mongolian stakeholders.

The primary investors in the current push to take state-owned enterprises public will be domestic securities and financial services, said Altai. He declined to speculate on how much the MSE share offering could raise.

The privatisation effort could help the stock market stabilise from its recent roller-coaster ride. Last year, the MSE rose 133%, easily the most of any stock exchange, but it went on to slump 18% this year.

Trade turnover at the exchange has been helped in part by a series of bond issues. Last year, state-owned coal miner Erdenes Tavan Tolgoi issued a $245mn bond on the market.

Also of help are amended banking codes that require the five biggest banks to become publicly traded companies by the end of 2023. An asset quality review of the banks is complete and the IPO processes are moving along – earlier this month State Bank raised Mongolian tughrik (MNT) 25.4bn ($7.9mn) by floating 5% of its shares.

Angana Banerji, IMF mission chief to Mongolia, said she supports the plan for the banks to go public but adds that the Bank of Mongolia needs to closely monitor banking sector developments and take supervisory actions if necessary.

“Intensive supervision would be warranted given the economic uncertainties in Mongolia,” said Banerji.

In a statement earlier this week, the International Monetary Fund advised the country to tread carefully as it moves toward privatising its non-financial SOE assets.

“Privatization of non-financial SOEs should be preceded by a robust risk assessment, strengthened oversight of SOE debt and investments, a sound regulatory framework, [and] transparent reporting,” the IMF concluded.

The report adds that privatisation should include legislation for installing stronger fiscal discipline at SOEs, for example, through an adoption of a non-bailout clause.

The proposed IPO would be a win for the government of Oyun-Erdene Luvsannamsrai, which has been promoting itself as a progressive cabinet that embraces rapid infrastructure development, technology and investment. Altai said the privatisation of the MSE could serve as a litmus test for the sale of other state-owned assets.

“We are going to be the pioneers,” said Altai. “I think if this listing goes well, it will be followed by other government-owned assets.”

By Michael Kohn in Ulaanbaatar October 31, 2022

On October 31, 2022, the President of Mongolia, U. Khurelsukh, received the President of the Japan International Cooperation Agency (JICA), Mr. Tanaka Akihiko.

At the meeting, the President of Mongolia noted that Japan's support, concessional loans, and aid have played a special role in strengthening Mongolia's democracy and market economy system and ensuring sustainable development.

Mentioning that the government and people of Mongolia highly appreciate the consistent support provided in the fields of education, health, and agriculture, he emphasized that JICA's assistance is timely, accessible to citizens, and deeply embedded.

In the future, he said, there are ample opportunities for cooperation in the fields of mining, rare earth elements, agriculture, food, and tourism.

Mr. Tanaka Akihiko briefly presented the results of the projects and programs implemented in Mongolia in recent years and expressed his close cooperation within the framework of the "One Billion Trees", "Food Supply and Safety" and "Healthy Mongolian" movements.

This visit of Mr. Tanaka Akihiko is taking place within the framework of the 50th anniversary of the establishment of diplomatic relations between the two countries, the 25th anniversary of the establishment of JICA's Representative Office in Mongolia, and the 30th anniversary of JICA's overseas volunteer members assigned to Mongolia.

Mr. Tanaka Akihiko has been appointed as the President of JICA for the second time and visited Mongolia in 2014.

The “Green labelling and Green financing” conference was organized by the Ministry of Environment and Tourism and the EU-Switch Asia financed new project “Switching on the Green Economy”, implemented by People in Need. More than 300 women working in SMEs and businesses gathered to discuss green labelling and financing – vital tools to realize sustainable production and consumption in Mongolia.

The Switching On the Green Economy project aims to support 1,500 agri-food and beverage MSMEs, 30 agri-food and beverage business associations (BA), and 750 retailers in adopting circular economy practices through a market-based eco-labelling system. Also, at the centre of the project, is supporting women-led SMEs who often lead the way when it comes to clean, safe, and environmentally friendly business practices. “Research by UN Women, UN Environment, and many others show that empowered women are great entrepreneurs in areas like renewable energy and developing greener business models. When women are given skills and financial support, they are able to thrive. And, more often than not, if women succeed, they bring others with them,” said Axelle Nicaise, the EU Ambassador to Mongolia during her remarks to participants.

“Mongolia has committed to reducing greenhouse gas emissions by 22.7% over the next eight years. Yet, the Government of Mongolia recognizes that much work still needs to be done to achieve the ambitious targets in the Paris Climate Agreement and the Sustainable Development Goals” said Mr. B. Bat-Erdene, Minister of Environment and Tourism of Mongolia

SUGGESTED QUOTE FROM TSERENDULAM: The Government of Mongolia, thanks to our partners like the European Union, is accelerating our green transition. This we cannot achieve alone. Working hand-in-hand with the private sector and communities, especially women leaders, is the key to building an inclusive green economy.

The “Green labelling and Green financing” conference is a critical learning opportunity for the Switching On the Green Economy project, funded by EU Switch Asia, as the women-led businesses are vital part to achieve the project goals, advance sustainable consumption and production and address climate change. “When it comes to tackling climate change and promoting sustainable consumption and production, we need to get the message out that women, like all of you here today, are key to shaping inclusive and sustainable development,” said Ambassador Nicaise.

Switching On the Green Economy Project is committed to finding sustainable solutions to address food security and climate change challenges – while also advancing gender equality.

About the project: The Switching On The Green Economy Project was designed, and is implemented, by People in Need (PIN) in the lead, together with Caritas Czech Republic INGO, the Mongolian Sustainable Finance Association, and the Development Solutions NGO. In line with the country’s national strategy to cut greenhouse gas emissions by 22.7% by 2030, this is the first SWITCH-Asia project in the Agri-Food and Beverage Sector to be implemented in Mongolia

About Switch Asia: Launched in 2007, the SWITCH-Asia programme is the largest European Union-funded programme promoting Sustainable Consumption and Production (SCP) supporting 24 countries in Asia and Central Asia. The overall objective of the programme is to promote sustainable and inclusive growth, contribute to the economic prosperity and poverty reduction in Asia and Central Asia and to a transition towards a low carbon, resource-efficient and circular economy. Learn more at: www.switch-asia.eu

The National Committee for Revival of Border Ports held its first meeting on 28 Oct 2022. Within the framework of implementing the Government's Resolution No. 362 of 5 Oct 2022, the issues of increasing the export volume of mineral products, which has a significant impact on Mongolia's budget revenue, and the country’s foreign currency reserves were discussed.

The Minister of Mongolia and Chief of the Cabinet Secretariat, D. Amarbayasgalan, presented the urgent need to implement organizational measures to increase the number of vehicles transporting coal from the deposits of Tavantolgoi to the Tsagaankhad residential area.

The National Committee for Revival of Border Ports members ensures the coordination of long and short-distance transportation and follow the infection control regime strictly within the scope of increasing coal export. The Chinese side decides the number of trucks transporting coal that cross the border daily, but it can be increased if our side strictly follows the infection control regime. The committee members also noted the need to pay attention to truck drivers' work and living conditions, resolve the issues of infrastructure in the Tsagaankhad residential area, and build a hospital.

Special Representative of the Government for "Erdenes Tavantolgoi" JSC, J. Ganbat, said that "Erdenes Tavantolgoi" JSC could collect USD 500 million in revenue by the fourth quarter of 2022 by organizing export and transportation activities prudently.

The Chairman of the border port administration, S. Lkhachinjav, made a presentation on transport regulations of the Gashuunsukhait border checkpoint. In connection with the presentation, the Chief of the Cabinet Secretariat, D. Amarbayasgalan, said, "When renovating and developing the border checkpoint, it is important to resolve the social issues of the employees working there." The Minister of Road and Transport Development, S. Byambatsog, suggested, "The National Committee for Revival of Border Ports needs to focus on resolving the source of drinking water and electricity for the workers working at the border port and make it a residential area."

At the meeting, the members decided to submit a draft resolution on the measures to be taken regarding coal transportation from the deposits of Tavantolgoi to the Tsagaankhad residential area to the next Cabinet meeting for discussion.

Officials in Chinese cities and provinces across the country are pulling no punches in stamping out sporadic COVID-19 outbreaks as winter nears, quickly closing venues and enforcing longer temporary lockdowns on millions of people.

Cases in mainland China hit 2,898 on Sunday, topping 2,000 for a second straight day and pressuring the country’s controversial zero-COVID policy, which has hamstrung the economy and exasperated its citizens.

In Guangdong province, manufacturing centre Guangzhou has seen a spate of cases over the past week that has closed some districts. Haizhu’s 1.8 million residents, or about 10 percent of Guangzhou’s population, have been the worst hit.

Total cases in Guangzhou rose to 1,110 during October 24-30 from 402 in the previous seven-day period. The threat of a major lockdown would rattle the city and harken back to the nightmarish two-month lockdown Shanghai experienced a few months ago.

On Monday, Shanghai Disney Resort said it closed the entire resort from October 31 due to COVID prevention measures in the city.

Over the past week, authorities raced to get a handle on rising cases in Datong, Xining, Nanjing, Xian, Zhengzhou and Wuhan, forcing temporary lockdown measures in some neighbourhoods.

Lu Dongliang, secretary of the Municipal Party Committee of Datong, rushed back from the party congress last week to access the “dire situation in the city” of more than one million.

Datong, which recorded 288 cases from October 27 to 30, has enforced stricter isolation and management of hotels, key industries and its railway. Some officials in the city have been punished for lax enforcement of COVID rules, according to local media reports.

As winter nears, northern cities, particularly those close to international borders, are seeing higher case numbers and could face new curbs.

Mudanjiang in Heilongjiang province, bordering North Korea, extended the temporary lockdown of some areas, according to local media reports. Dandong, Suihua, and Ruili – cities close to North Korea, Russia and Myanmar borders respectively – are experiencing outbreaks.

On October 27-28, 2022, the Institute of Asian Studies of the Charles University in Prague organized an international conference on "Internal and external relationships influence on the Mongolian language and culture".

The conference was opened by Mr. Gansukh Damdin, Ambassador Extraordinary and Plenipotentiary of Mongolia to the Slovak Republic, and Vice-Dean Daniel Berounsky from Charles University`s Faculty of Philosophy. In his speech, the ambassador thanked the staff of Charles University for supporting Mongolian studies and organizing the international Mongolian Studies Conference in Prague after 30 years.

In his speech, Mr. Gansukh Damdin mentioned “The Government of Mongolia in its "Vision 2050” long-term policy document is pursuing a policy of building unified national values, creating the immunity of the Mongolian language, history, and cultural heritage, and then intensively developing Mongolian studies on the international stage”. He also commended the efforts of Mongolists and scholars to spread Mongolian studies and promote them internationally.

“Mongolia is paying attention to the training of young Mongolists and implementing an annual summer school program for them. For example, the Minister of Foreign Affairs of Mongolia spearheaded an initiative of marking the International Day of Mongolian Studies and made the ‘Award named after the Minister of Foreign Affair’ for the best work of young researchers available from 2023”, he added.

About 40 Mongolists and scholars from more than 10 countries including Mongolia, the Czech Republic, Hungary, Finland, Sweden, Germany, France, Italy, Russia, Switzerland, Qatar, and Romania participated in the conference. They gave presentations on more than 30 topics.

The Embassy of Mongolia in Slovakia opened the "Khot Mandal-Secret Mantra Temple" photo exhibition and welcomed the delegates to the Mongolian Ger /yurt/.

At least eight Mongolian provinces are likely to experience the extreme wintry weather "dzud" this winter, local media reported on Sunday, citing official sources.

"Out of all the 21 Mongolian provinces, at least eight provinces, namely Bayan-Ulgii, Uvs, Zavkhan, Khovd and Govi-Altai in the west, Bayankongor in the south-west, as well as Arkhangai and Uvurkhangai in the center are likely to experience dzud or near-dzud conditions this winter," the country's Ministry of Food, Agriculture and Light Industry said in a statement.

A dzud is a brutal weather phenomenon in which a dry summer followed by a frigid winter kills vast numbers of livestock, either by starvation or freezing temperatures.

According to the ministry, the government has stored 15,500 tons of hay and 4,800 tons of fodder for livestock to help them overcome the possible harsh winter.

The livestock sector is a central pillar of the Mongolian economy, while the country's livestock population totaled 67.3 million by the end of 2021.

In 2016, a dzud killed more than 1 million livestock in Mongolia, a nation where pastoral herding is still common.

In pursuit of their joint interests and shared values, Japan, Mongolia, and the United States held a trilateral meeting on October 28, 2022, in Tokyo. The three sides discussed a wide range of regional security challenges, economic issues, and areas for cooperation. The three sides reaffirmed their commitment to strong ties with each other, and dedication to their visions for a free and open Indo-Pacific. Japan and the United States expressed their support for Mongolia’s democracy and Third Neighbor policy.

Japanese Ministry of Foreign Affairs Asia and Oceania Bureau Director General Funakoshi Takehiro, Mongolian Ministry of Foreign Affairs State Secretary Nyamdorj Ankhbayar, and U.S. Deputy Assistant Secretary of State for East Asian and Pacific Affairs Mark Lambert participated in the meeting.

Japan, Mongolia, and the United States emphasized the importance of international law, including the United Nations Charter and the principles of sovereign equality, respect for the independence and territorial integrity of states, and prohibition of the threat or use of force. To this end, the three sides expressed concern over the suffering of the Ukrainian people. The three sides also expressed deep concern about the risk of nuclear weapons use and the deteriorated international security environment, and also called on all states to affirm that a nuclear war cannot be won and must never be fought.

Japan, Mongolia and the United States expressed their respective views regarding the Democratic People’s Republic of Korea’s (DPRK) continued development of nuclear weapons and their means of delivery, including the unprecedented number of ballistic missiles launched in 2022. All sides underlined the necessity of resuming dialogue, and called on the DPRK to fully comply with its obligations under relevant UN Security Council Resolutions and to engage in dialogue. All sides also emphasized the importance of the international community fully implementing relevant UN Security Council Resolutions. Japan emphasized the need for an immediate resolution of the abductions issue and thanked the United States and Mongolia for their continued support on this issue.

The three sides reaffirmed their shared commitment to maintaining the rules-based international order, including the principles and the purposes of the United Nations Charter. All sides strongly opposed attempts by any party to unilaterally change the status quo by force or coercion in any region, and they emphasized the importance of resolving disputes by peaceful means.

Japan, Mongolia, and the United States shared their respective visions for regional development, including in the Indo-Pacific, and exchanged views on how to cooperate to ensure a prosperous and peaceful future. All sides concurred to work together to promote the rule of law, peaceful resolution of disputes, human rights, environmental protection, and economic development. Japan and the United States expressed their appreciation for Mongolia’s contributions to UN peacekeeping operations and continued stability operations in conflict zones worldwide. All sides expressed an intention to continue defense cooperation and joint training exercises.

Japan, Mongolia, and the United States discussed economic challenges the international community is facing as a result of regional and global shocks. All sides emphasized the importance of strengthening the international economic order to counter new challenges, such as economic coercion. All sides underscored their desire to deepen their economic partnership, including through enhanced collaboration on renewable energy, climate change, supply chain resilience, critical minerals, intellectual property rights, and digital development. They discussed the importance of improving Mongolia’s business climate and ability to attract investment, particularly from Japan and the United States. Japan and the United States discussed their development projects in Mongolia and ways to enhance the mutual complementarity of such projects and their impact on furthering Mongolia’s economic development. In particular, Mongolia and the United States briefed Japan on their joint $462 million Millennium Challenge Corporation Water Compact, which will expand Ulaanbaatar’s water availability by 80 percent. Mongolia expressed appreciation for Japan’s enduring Official Development Assistance (ODA) projects. Japan and Mongolia highlighted their recent cooperation on Chinggis Khaan International Airport, constructed using Japanese ODA and operated by a Mongolia-Japan joint company, to increase the regional connectivity of Mongolia and realize the vision of a free and open Indo-Pacific.