Monbiz Mongolia Index: A Debut Global Benchmark for Mongolia-focused Stocks

MonBiz Mongolia Index A Debut Global Benchmark for Mongolia-focused Stocks

A Debut Global Index. Earlier this month Eurasia Capital launched MonBiz Mongolia Index, a debut global benchmark that tracks the share price performance of 20 largest companies with assets and operations in Mongolia. The MonBiz Mongolia Index covers publicly listed companies with the total market capitalization of US$15.4bn, including six companies from the Mongolia Stock Exchange and 14 companies from the New York, Hong Kong, Toronto, London and Australia Stock Exchanges. At least one-third of the market value of these companies is related to Mongolia. The Index, which is US$-denominated and market capitalization-based, is aimed to become a leading benchmark for assessing the performance of Mongolia-focused companies.

One of the best performing benchmarks globally. The MonBiz Mongolia Index is up 30.6% YTD and is one of the best performing benchmarks globally. To date it has outperformed MSCI World (-3.31%), MSCI Emerging Markets (-0.40%), MSCI Frontier Markets (1.15%) and vast majority of singly country indices. We believe such outperformance of Mongolian companies is to continue in coming years thanks to the development of the country’s massive mineral resources, improving fundamentals and revaluation of various asset classes in Mongolia.

The Index to expand in value and number of members. Mongolia is the world’s most successful frontier market in terms of companies raising substantial equity capital in various international stock exchanges on the back of resource assets in this mineral-rich country. To date 14 international listed companies that are the members of the Index have already generated US$15bn in shareholder value, which is 2.6 times greater than Mongolia’s total GDP in 2009, the world’s highest ratio for a single country. We believe the index is to expand significantly in value and number of members with a wave of Mongolia resource IPOs hitting various international stock exchanges in coming years (including overseas listings of Mongolian state-owned enterprises). We expect the MonBiz Mongolia Index to be an effective proxy for the rapidly growing Mongolian economy and to serve as a benchmark for global portfolio investors seeking exposure to this exciting frontier market.