Mongolian Stock Exchange is small but has its own charms for local investors

The Mongolian Stock Exchange trades for 90 minutes a day out of a former movie theater, eking out daily turnover in the neighborhood of USD70,000. Although the benchmark index is up more than tenfold in four years, its total market capitalization hasn’t quite topped USD1 billion. It is a market suitable only for well-informed insiders and the craziest speculators, which may be part of its rogue charm. Beyond the vicarious thrill, Mongol mania shows what gets people excited these days. Mongolia’s sitting on a supposed treasure trove of untapped mineral riches, next door to mineral-craving China.

Mongolia’s gold, copper, coal, and uranium are the envy of China, Russia, other Asian powers, and many Western miners. Their collective heavy breathing has turned the Mongolian capital into a hotbed of international intrigue. Russia seems to have the upper hand on uranium, while Australia’s Rio Tinto and Canada’s Ivanhoe Mines have tussled over a big gold-and-copper project.

Coal could be another big earner. Coal-mining stocks starred last week in Ulaanbaatar, several rising by the 15 per cent daily limit. The rally comes ahead of a landmark Hong Kong initial public offering by a Mongolian coal producer: Mongolian Mining plans to raise USD700 million, equivalent to 13 per cent of its home country’s gross domestic product.

Another recession will surely come, eventually. But not before the Mongolians mine much gold and coal.

Comments

Popular posts from this blog