Visiting fellow of MFRC:Ts.Enkhjargal

This material is prepared under the responsibility of the presenters. All remarks represent the presenters’ own views, and not those of the FRC.

Content

2

About Mongolian12 Mongolian Capital Market’s framework

1. About Mongolia

Country profileAria: 1.565 million kmPopulation: 3.2 millionCapital city: UlaanbaatarLanguages: Mongolian 94%, Russian, English 6 %Currency: Tugrug (MNT)Goverment: Parliament

2. Mongolian Capital Market’s framework

Authorities of the Financial market

Financial Regulatory Commission

- Insurance market- Securities marketMicrofinance marketNon-bank financial institutionsSavings and credit cooperatives

The Bank of Mongolia

Money market /Banks/

The Structure of Financial Regulatory Commission

The State Great Khural (Parliament

of Mongolia)

Chairman

Commission meetings

Supervisory Board Internal audit

division

Vice ChairmanVice Chairman

Secretariat

Foreign relations

and cooperation department

Securities market

department

Insurance market

department

Nonbank financial

institutions department

Savings and credit

cooperative department

Supervision department

Administration

department

Press unitFinance and investment

unit

Research and risk

evaluation division

Legal division

Information technology

division

Local representatives

Securities market 514

Insurance market 140

NBFIs538

SCCs275

Branches and representatives

930

As of 2nd quarter of 2019, FRC regulates 2,397 professional entities including:

securities firms, brokers and dealers, underwriters, investment funds; insurance companies and intermediaries; non-bank financial institutions; savings and credit cooperatives;

Financial institutions under FRC regulation

Capital market overview (MSE)

303 300 301 303 307

0100200300400500

2015.II 2016.II 2017.II 2018.II 2019.II

Market capitalization /billion MNT/ Number of securities companies,total assets /billion MNT/

TOP 20 IndexNumber of listed companies

4.8%

4.1%

1408.5 1423.1 1497.7

2484.92604.8

0.4%0.9% 0.8%

2.0%

3.2%

0.0%0.5%1.0%1.5%2.0%2.5%3.0%3.5%

0

1,000

2,000

3,000

2015.II 2016.II 2017.II 2018.II 2019.II

15,024 12,274 12,660

19,96120,785

2015.II 2016.II 2017.II 2018.II 2019.II

63 62 61 54 5267.6 75.295.3 93.2 90.2

020406080100120

020406080

100

2015.II 2016.II 2017.II 2018.II 2019.II

Initial public offerings (IPO)

– In 2018 (6)• LendMN (5 billion MNT)• Mongol Basalt (6.4 billion MNT)• Erdenes Resources Development Corporation (2.5 billion MNT)• Mandal Insurance (7.5 billion MNT)• Ard Insurance (5.3 billion MNT)• Tumen Shuvuut (10 billion MNT)

– In 2019 (3)• Ard Credit NBFI (5.2 billion MNT)• Invescore NBFI (18.6 billion MNT)• Monos Foods JSC (8.6 billion MNT)

11

36.7 billion MNT

32.4 billion MNT

Mongolian Capital Market at a Glance: Development Stages

1995’s~

2000’s

Stage Ⅰ: created and established the capital market

Established the stock exchange Started to primary and secondary trading Implemented the privatization through stock exchange Created the legal and regulatory frameworks

2001’s~

2007’s

Stage II: New product & Quantitative Growth

Corporate bonds trading started First IPO launched Attract the foreign investor and domestic investor

2008~

2014

Stage III: Qualitative Growth through Structural Reforms after the Mining Crisis

Introduced the Millennium IT integrated system of trading, settlement, surveillance in capital market

Revised the Securities market law and Investment fund law Created the securitization market

2015 ~2017

Stage V: Strategic Growth through Serving Customers’ Diversifying Needs Expanding product line-up into unit trust, commodities futures Promotion for listing of foreign stocks, Cross listing regulation Change to risk based supervision from rule based supervision Approved the financial market’s development strategy,

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