Mongolia shuts down $10m bond auction after no bids received

Ulan Bator---Mongolia shut down a $10 million government bond auction on Wednesday after receiving no bids, the central bank said, in what analysts said was a fresh sign of the resource-rich country's economic struggles.

The 20 billion tugrik ($10.2 million) bond remained unsold due to an "absence of both competitive and non-competitive bids", the Bank of Mongolia said in a statement on its website.

The bond is one of a handful of bonds planned by the central bank and sold regularly throughout the year.

The landlocked country, wedged between China and Russia, has sought in recent years to settle on a government policy that balances resource nationalism with the development of its estimated $1.3 trillion in unexploited mineral deposits.

The prolonged struggle has led to economic turbulence, with the central bank's failed bond auction the latest symptom of systemic troubles.

"There have been several failed auctions by Mongol Bank over the last six to nine months," said Nick Cousyn, chief operating officer of BDSec JSC, Mongolia's largest stock brokerage.

In every previous auction, domestic banks have represented the largest percentage of demand for government bonds.

But Cousyn noted: "The banking system is tight on cash due to delinquencies and deposit flight."

Mongolia enjoyed world-leading economic growth in recent years -- peaking at 17.5 percent in 2011 -- on the back of a minerals boom exemplified by the copper- and gold-laden Oyu Tolgoi mine, operated by Anglo-Australian resources giant Rio Tinto.

Before the mine could move forward on its $4.9 billion underground expansion, however, revenue-sharing negotiations between Rio Tinto and the Mongolian government stalled.

In addition, foreign direct investment plummeted 74 percent in 2014, while the turgrik, Mongolia's currency, is currently at an elevated 11 percent.

The future of Oyu Tolgoi was part of a government SMS referendum last week, in which the public voted by text message to reject austerity and protectionism in favour of welcoming foreign investment for the state's megaprojects.

With future success increasingly dependent upon expansion of the mine project, Prime Minister Chimed Saikhanbileg's government, in its third month in office, has found opportunity elsewhere.

This week in Tokyo, Saikhanbileg signed a free trade agreement with his Japanese counterpart Shinzo Abe.

Mongolian entrepreneurs and Japanese investors are pursuing an array of agricultural enterprises, from strawberry greenhouses to shrimp farms, to attract non-mineral investment.
AFP
Share:

0 comments:

Post a Comment

Facebook page

Powered by Blogger.

Categories

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

Followers

Live Traffic