New beginning for Stock Exchange

Speaker D.Demberel ringing the opening bell on January 18

The 20th anniversary of establishment of a capital market and Mongolian Stock Exchange in Mongolia is marked in 2011. It is expected that 2011 will be a historically significant year for MSE and the capital market. The reason is, major mining and infrastructure projects will raise money through stock exchange in the near future and the London Stock Exchange has been selected to manage the MSE. “The year 2011 will be a historical period to start legal reform of Mongolia’s capital market, establish national powerful share holding companies and start implementing reforms of techniques, technology and management of professional securities organizations,” said R. Sodkhuu, Executive Director of MSE.

On the occasion of the 20th anniversary of MSE, Parliament Speaker D. Demberel opened the 3,885th trading day of the capital market on January 18 by ringing the bell. He said, “Along with development of the economy, an increase of construction and investment and cooperation at the international level, it necessitates developing a capital market much more. Especially, the capital market, with optimal management, is so vital to implement major mining and infrastructure projects by means of attracting domestic and foreign investment, a nd to organize distribution of benefits to people from projects effectively. Government adheres to the direction  of taking action to operate the MSE in connection with well-known foreign stock exchanges, learn experiences from them, develop infrastructure of capital market, modernize techniques and technology, qualify personnel and improve management and organization. Parliament will focus on improving the capital marketrelated legal environment and making  applicable State Policy clear.”

Within the past 20 years, 474 companies have been registered at the MSE and traded 738.3 million shares with Tgs 262.5 billion, and 3.1 million bonds with Tgs215.1 billion in total, Tgs477.6 billion by 3873 trade. Presently, the MSE registered 448,717 domestic and foreign share holders, investors and entities and received dividends worth Tgs109.6 billion over the past 20 years.

At the MSE, there are 340 brokers and national specialists from 48 professional organizations who have rights to run stock exchange trade and services. R. Sodkhuu said, “We welcomed 2011 with the achievements that basic indications of the capital market grew, national companies strengthened, and overcame the crisis.

Last year, MSE’s TOP-20 index grew to 15039.97 and market estimation was measured at a trillion for the first time in its history, increasing to Tgs1.4 trillion.” In 2010, the MSE traded 64.5 million shares of 136 companies with Tgs62.9 billion through its 253 trades and 3000 government bonds with Tgs30 billion, carrying out transactions worth Tgs92.9 billion in total.

The London Stock Exchange’s first team arrived in Mongolia and the sides are working to set clauses  of the Master Agreement to be established by the two sides. Through mid February, the London Stock Exchange’s director liable for foreign relations will arrive in Mongolia. “The London Stock Exchange promised to make MSE its main partner in Asia and a stock exchange that meets the world standard. We believe that MSE’s development will rise to a new level and the economy will grow considerably in the next two years,” said D. Sugar, chief of State Property Committee.

Mongol Bank’s deputy governor N. Zoljargal who was MSE’s first director said, “Of course, the world standard team is different. I believe it  will bring good results. On the other side, I am sure that the Government will give it its attention. The MSE is not the kind that will compete with Hong Kong and New York stock exchanges; however, the main thing is to ensure the market operates. The economy does not develop by depending on the stock exchange. Instead, other mechanisms develop by depending on economic demand. In my vision, Mongolia’s economy will have faster growth in the next 5-10 years. For instance, Mongolia will have the fastest economic growth in Asia by 2015. Following it, the capital market may show faster growth in Asia.