Harvest Global Investments Ltd., a unit of China’s second-largest money manager, plans to buy more Mongolian stocks for its frontier-markets fund as rising consumption and a commodities boom spur economic growth.
“From being unknown to being mildly known, Mongolia still offers upside,” Andrew Tan, 37, deputy chief investment officer at Harvest Global, said in a telephone interview from Hong Kong on Feb. 28. “We find the government has done all the right things for the last five years in terms of opening up the market. The country has much better fundamentals.”
Mongolian stocks have rallied the past two years as investors bought shares of companies that are benefiting most from exports of commodities such as coal and copper to China. Read more
Reuters:By Michael Kohn
Forced to sell his animals and flee his dried-up lands, former herder Sainbuyangiin Tsagaan-Ovgon is now hoping mining profits will let him return to his native Gobi. The 72-year old, who admits he knows nothing about stocks, will soon receive 536 shares in the Mongolian company that owns the world's largest coking coal deposit. The potential windfall is part of an experiment to allow Mongolians to share directly in wealth generated by mining at Tavan Tolgoi, the hotly contested coal project. "These shares will be a big help to herders like myself," said Tsagaan-Ovgon, who sported a traditional silk robe and white fedora as he mingled with the crowd on Ulan Bator's Sukhbaatar Square. "We can plant fruit, vegetables and trees. In the city people can use their shares to start small businesses, they can package jam or make sweaters and then build their own brand names." Erdenes Tavan Tolgoi's international IPO could raise up to $5 billion, a vast sum for one of the poorest countries in Asia. Read more
Lulu Chen and Naomi Rovnick, SMCP
The Mongolian government is pressing ahead with an initial public offering of shares in the Tavan Tolgoi coal deposit, an immense reserve in the Gobi Desert that has an estimated five billion to six billion tonnes of coal, mostly coking and thermal.
Bankers said the deal is most likely to take place in Hong Kong, a natural market for Mongolian mining assets given the landlocked country's proximity to mainland China.
Investment banks have been asked to pitch for roles advising on the offering by January 31, said people with knowledge of the situation.
The site could be the world's second-largest coal deposit, after the Shengli field in China, according to data provider Raw Materials Group.
Asian investment bank Eurasia Capital estimates the Tavan Tolgoi deposit holds 5.1 billion tonnes of coal that could be mined continuously for 200 years. Read more
by Jeremy Grant
Mongolian yak butter futures, anyone?
This week the London Stock Exchange said it had agreed a “strategic partnership” with the Mongolian Stock Exchange.
Does the LSE really share any strategic interests with a tiny stock exchange on the outer fringes of the world – one established only in 1991?
Actually yes. The LSE is, together with the Canadian exchanges operated by TMX Group, the biggest home to mining and energy company listings in the world.
And Mongolia has vast untapped reserves of coal, copper and gold, as investors and prospectors are realising. Mongolia is the latest frontier market du jour, as FT colleague Geoff Dyer explains in a piece this week reported from Ulan Bator. Read more
Dubai - (PanOrient News) Prime Minister of Mongolia Batbold Sukhbaatar said he was "impressed by the highly developed infrastructure in Dubai and United Arab Emirates," and expressed hope "to build bridges of cooperation" between both countries.
During a meeting in Dubai on Monday with Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice President, Prime Minister and Ruler of Dubai, Sukhbaatar said Mongolia welcomes investments from UAE and Arabic countries in the livestock and natural resources sectors.
Mongolia has more than 45 million livestock and vast agricultural and mineral resources including gold and uranium, "and this is open for investments," the visiting Mongolian Premier said in the meeting.
Sheikh Mohammed bin Rashid expressed hope that the friendly relations between their countries and peoples are boosted, WAM news agency reported.
In Abu Dhabi, Prime Minister Batbold met Sheikh Ahmed Bin Zayed Al Nahyan, Managing Director of Abu Dhabi Investment Authority and discussed cooperation opportunities in large projects of infrastructure in Mongolia.
He also met Deputy Commander of Emirates Armed Forces General Mohammed Bin Zayed Al Nahyan, and talked about developing Mongolia-Emirates relations and collaboration in wide scope of fields.
Photo: Sheikh Mohammed bin Rashid welcomes PM Batbold in Dubai.
Courtesy of WAM News Agency.
By Richard Barley, The Wall Street Journal
Jan 01, 2011
For many countries, the global financial crisis and its aftermath is the stiffest test they are likely to face for years. For Mongolia, however, the recession, banking crisis and International Monetary Fund package that set the tone for 2008-2009 are likely to pale in comparison with the challenge of managing the next decade. As the country finally unlocks its stockpiles of copper, gold and coal, it will have to cope with unprecedented economic pressures.
Mongolia's enormous Oyu Tolgoi copper and gold complex is expected to start production in late 2012. As a result, the IMF forecasts 2013 gross-domestic-product growth of 28%, the fastest in the world, up from forecast increases of 7%-8% in 2011 and 2012. Foreign direct investment both in the mining industry and in infrastructure is expected to be many multiples of GDP of just $5 billion. Read more
By William MacNamara in London
Published: April 14 2010 03:00 | Last updated: April 14 2010 03:00
Mongolia, a resource-rich country lacking roads or rail, has taken its first step in building the infrastructure required to be a leading commodities exporter, after it approved construction of more than 5,000km of railways.
Provisional plans for an "east-west" rail network have been passed unanimously by Mongolia's parliament. Sukhbaatar Batbold, the prime minister, confirmed to investors a conference in Hong Kong that the railway project was moving ahead.
One purpose is to connect the necklace of resource deposits that extend along Mongolia's southern perimeter in the south Gobi desert. Many of the deposits - including Rio Tinto and Ivanhoe Mines' world-class copper project at Oyu Tolgoi - are less than 200km from the Chinese border. Read more
Investment Adventures in Emerging Markets
Many people have asked me what are frontier markets? In summary, they are the next emerging markets and include the likes of Kazakhstan, Romania, Nigeria and Vietnam. The key characteristics are the fact that they are overlooked by investors and have offered fewer investment opportunities. Frontier markets, generally, have companies that are oriented towards their respective domestic economies rather than the global economy, so we believe that they have less correlation to emerging markets in general.
Most investors have refrained from investing in frontier markets because of the perceived risks. However, I do not believe that the level of risk is necessarily higher as compared to emerging markets. Frontier markets generally share the same political and economic issues as emerging markets, but their valuations may be more attractive as a result of this perception. At the end of the day, it all boils down to picking the right company or stock. Read more
James Passin, co-founder and manager of Firebird Global Fund and Firebird Global Fund II, in this wide-ranging, exclusive interview with The Energy Report, discusses beryllium and its energy, military and industrial applications, as well as a burgeoning beryllium-uranium mix oxide fuel technology with the "potential to revolutionize nuclear power by creating a safer and more efficient fuel." Admittedly pro-uranium, Passin mentions two uranium miners he likes, and some exciting developments in copper in Mongolia.
The Energy Report: James, last December, you commented on the low interest rates that the government had on bonds. You said you thought that would spur inflation and an increase in commodity prices. Now that we're in the last quarter of '09, how do you feel about your predictions and what do you see going forward into 2010?
James Passin: It was clear to me at the end of 2008 that we were at the beginning of a powerful and lasting recovery in commodity prices and resource stocks. I think that the structural fundamentals are in place to support further increases generally in commodity prices. Read more
Stocks from countries such as China and India are big holdings in most emerging-market funds. But some funds venture even further, into 'pre-emerging' markets.
By ANNA PRIOR
Strong returns have enticed many people into emerging-market stock funds this year. And having exposure to the economies of countries including China, Brazil and India has come to seem necessary and maybe even mundane to a lot of mutual-fund investors.
But how about Nigeria? Sri Lanka? Or maybe the United Arab Emirates—a market that normally goes unnoticed by most investors but caught everyone's attention last month as a debt crisis in Dubai sent waves of concern around the globe.
Stocks from such "pre-emerging" or "frontier" markets can be found, typically in small doses, in the portfolios of a number of emerging-market funds. As a group, these frontier markets haven't done nearly as well as larger developing markets this year. The MSCI Frontier Markets Index was up just 8% year-to-date through November, compared with the MSCI Emerging Markets Index's 68% rise.
Still, some fund managers say selected frontier-market stocks have boosted their fund returns this year and have considerable potential ahead. Read more
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