Mongolian Bonds Rebounds after Taking a Hit due Political Uncertainty

After taking a hit due to political uncertainty, Mongolia’s bonds rebounded with the 2018s quoted at 97.50/98.50 and the 2018s around 98.15/99.15, which is fastrecovery considering it reached levels as low as 93.50 and 94.50.
Mongolian bonds plunged 7-8 USD on Wednesday due to the news that the Mongolian People’s Revolutionary Party (MPRP) refusingto work with the Democratic Party.
Prime Minister N.Altankhuyag was in Kyrgyzstan and no one has yet officially accepted the MPRP’s resignation.
The MPRP ordered all its members holding ministerial posts to resign during a meeting on Monday. General Secretary of MPRP, G. Byambasuren said the decision was made as a protest against Enkhbayar’s imprisonment.
This news lead the bond prices to plummet until the next day (Thursday), institutional investors were picking them up, which boosted prices by as much as 5 USD. The bonds are still below reoffer of 99.996 and par and have not recovered to the 101.50/102.00 which they reached shortly after being priced.
During its launch, Mongolia’s 1.5 billion USD debt offering was 10 times oversubscribed or 15 billion USD demand which is twice the size of Mongolian GDP. The attraction of Mongolia is that it is rich in resources such as copper, uranium and coal and its 17.3 percent rate of economic growth in 2011.
Mongolia’s government has stated that it plans to sell a total of 5 billion USD in bonds to finance the infrastructure required to develop its flourishing mining sector.
“It’s one of the fastest-growing economies in the world, with greatly improved policies, and Mongolia is considerably less likely to default in the next few years than Spain,” said Charles Robertson, chief economist at Renaissance Capital to the Wall Street Journal.
The final outcome of the MPRP’s departure could “depend on how the exit is handled”, said Vidur Jain, an analyst at local investment bank Monet Capital to Reuters.”This may affect the yields on the recently issued bonds, and make a second bond issuance more expensive.”
The MPRP is a part of the “Justice Coalition”, which fought the June parliamentary elections on a largely resource-nationalist platform.This means, MPRP’s departure could eventually be welcomed by foreign investors if it helps lift fears of growing resource nationalism in the country.
“If the current (Democratic Party) government could maintain control it would be positive for investors, provided the fallout is handled effectively, as the MPRP was strongly opposed to foreign investment,” Jain said.
The MPRP’s partner in the Justice Coalition, the Mongolian National Democratic Party, said it would remain a part of the coalition government.



Post a Comment

Facebook page

Powered by Blogger.


Advertising in Mongolia An Culture Editorial of the Mongolianviews education Environmental protection Famous Mongolians Foreigners in Mongolia Inner Mongolia Ivanhoe Mines Mongolia agriculture Mongolia analysis Mongolia and Australia Mongolia and Belorussia Mongolia and Cambodia Mongolia and Canada Mongolia and central Asia Mongolia and China Mongolia and Cuba Mongolia and EU Mongolia and Germany Mongolia and Hongkong Mongolia and Hungary Mongolia and India Mongolia and Inner Mongolia Mongolia and Iran Mongolia and Italy Mongolia and Japan Mongolia and Kazakhstan Mongolia and Korea Mongolia and Kuwait Mongolia and Malaysia Mongolia and Nato Mongolia and North Korean Mongolia and Poland Mongolia and Russia Mongolia and Singapore Mongolia and South Korea Mongolia and Taiwan Mongolia and the world Mongolia and Tibet Mongolia and Turkey Mongolia and UK Mongolia and Ukraine Mongolia and UN Mongolia and USA Mongolia and Vietnam Mongolia Banking Mongolia civic society Mongolia crime Mongolia diplomacy Mongolia Economy Mongolia Education Mongolia Energy Mongolia Finance Mongolia Health Mongolia History Mongolia holiday Mongolia in international media Mongolia Industries Mongolia Joke Mongolia law Mongolia LGBT Mongolia medical Mongolia military Mongolia Mining Mongolia Mining Developments Mongolia Mortgage Mongolia natural disaster Mongolia Petroleum Mongolia public announcements Mongolia railways Mongolia Religion Mongolia society Mongolia Sports Mongolia Stamp Mongolia telecommunication Mongolia tourism Mongolia Urbanization Mongolia Wild Life Mongolian Agriculture Mongolian Archeology Mongolian Food Mongolian Gay Mongolian Government news Mongolian History Mongolian Military Mongolian Mining Development Mongolian Movie Mongolian News Mongolian Parliament Mongolian Political news Mongolian Press Mongolian Songs Mongolian Women Mongolian Youth Mongolians abroad Moninfo Opinion Oyu Tolgoi Investment Agreement Photo news Press Release Rio Tinto Tavan Tolgoi coal mine Ulaanbaatar development Weird expatriates in Mongolia

Blog Archive


Live Traffic