Crossroads arrive for Investing in Mongolia

Discussion by the Banking and Finance panel at the Chinggis Khaan Hotel
On September 7, the international investment firm Eurasia Capital organized one of this year’s major investment conferences in Mongolia.
The event took place in the Chinggis Khaan Hotel in Ulaanbaatar and was attended by a distinguished group of people from Mongolia and abroad.
The event opened with a message from Prime Minister S.Batbold which was read to the audience by Mr. Ch.Ganhuyag, CEO of Tenger Financial Group who is also Advisor to the Prime Minister.
The organisator, Mr. Alisher Ali Djumanov, was very content with the level of the speakers that contributed to the conference as well as the attendance, not only in the number of people attending but also the organizations they represented.
After his welcome speech he took the stage with a very positive presentation about Mongolia’s economic situation and future. Mr.Alisher Ali Djumanov has always been very bullish about the Mongolian market since he brought Eurasia Capital to Mongolia the first time three years ago.
In his presentation he made very clear the enormous potential of the Mongolian economy in many aspects.
Exploitation of the gigantic wealth in Mongolia’s soil will certainly bring a lot of investment and a lot of revenues to Mongolia. GDP is to grow at least five times when just the current projects with OT as the main project, start to generate revenue. While Europe and the US are struggling to grow with maybe 1 or 1.5 percent, Mongolia will grow with double digits for sure.
Also one of the most interesting presentations, the one of Mr. Zoljargal,Deputy Governor of the Bank of Mongolia was very positive about the economic future of Mongolia in general.

However, he made some quite strong remarks towards the politicians that rule the country.
One of the major dangers of a fast growing economy is overheating and inflation. Distribution of wealth in cash to the population is also a strong distribution to growing inflation. And as we all know inflation hurts everybody in society, especially those who have less spending powers than others. In his presentation Mr. Zoljargal therefore warned politicians not the spread Mongolia’s wealth to the population by distributing cash but to do this in a more sustainable way.
Further presentations and panel session were held and included local banks like Mr. Orkhon of the TDB Bank of Mongolia and Mr. Bold of the Xac Bank for example, the country representative of the European Bank for Reconstruction and Development EBRD Mr. Philip Ter Woort and well known people of the mining and general business sectors. The audience raised questions concerning education. Not only for all the new business, but also in the mining sector, a lot of well educated and bilingual or even multi lingual people are needed. Currently the quality of the universities and vocational schools does not match international levels or the needs of the business sector and this causes worries. Not only for the companies that need good staff but it doesn’t solve the problem of unemployment. With better education more of the population could actively participate in the fast development of the country.
During the breaks, lunch and closing reception which were as usual perfectly organized by the team of the Chinggis Khaan Hotel under the supervision of the General Director Mr. Sam Sallam who also shortly attended, there was a lot of networking between attendees from countries like the USA China, Germany, Netherlands, United Kingdom, Japan and many more.
The general consensus was that the organizer, Mr. Alisher Ali Djumanov of Eurasia capital was indeed right with being bullish about the Mongolian market. People generally were confident that the Mongolian economy will grow and prosper and hoped that the government would be able to manage this process in a proper and adequate manner.
During the same afternoon there was also a session organized by Mr. Masa Igata from Frontier Securities in the newly constructed MB Plus bar. For a very limited audience there was a presentation by Behre Dolbear, a consulting company to the minerals industry since 1911.
Mr. Thomas Bispham gave a clear presentation about the conditions for being listed on the Hong Kong stock exchange for the mining industry.
Since the most important assets of this industry are the minerals and reserves, he explained, the process of valuation of this. It was very obvious that the outdated standards of Russia and the local standards of China don’t match the international levels demanded by authorities of the Hong Kong and other stock exchanges as well the standards of most international investors. Besides this, there are only 46 internationally recognized experts in the world available for this valuation process!
The conclusion is that Mongolia is becoming more and more of a country on the map of investors. Not only mining companies but also banks, stock exchanges and companies in the supply chain towards mining companies are interested in investing in Mongolia. With the increase in GDP, other sectors like construction and retail become attractive for foreign investment.
source: The Mongol Messenger
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