Will Mongolian commercial banks participate in the secondary mortgage market?
The Mongolian Mortgage market is already over 20 years old yet the secondary mortgage market only accounts for 5% of the Mongolian GDP. The mortgage market as a whole is severely underdeveloped.
We can however expect the market to move at a fast pace from now on as Mongolia’s mining assets come into play.
The Mongolian government is hoping to be distributing shares of the TavanTolgoi deposit soon to its citizens, thereby increasing the available capital and liquidity of the population as a whole as well as giving everyone the opportunity to trade on the Stock Exchange. The development of the Mongolian Stock Exchange will now go through enormous changes as the LSE takes over, it is thought that commercial banks will be allowed to trade and obtain brokers licenses for the MSE, this move is pushed for by the government as they want to increase liquidity and the number of brokers.
A negative impact this could of course have, is a re-run of the global financial crisis where mortgages are traded openly as a commodity on markets and are then repackaged and resold endlessly to investors and insurance companies. Thereby placing the mortgage takes the most at risk. The LSE has already made it clear that the biggest challenge faced by the MSE and by introducing new players on the MSE is simply a question of HR. Will there be sufficient people who can understand and operate a stock exchange within the commercial banks and the already existing brokers. It will take another few years for the new generation to really understand the mechanisms of the market and how a secondary mortgage market could feasibly operate. It is further feared that the government itself might not be fully aware of all the implications of introducing a secondary mortgage market on the MSE.
Source : Gogo.mn
We can however expect the market to move at a fast pace from now on as Mongolia’s mining assets come into play.
The Mongolian government is hoping to be distributing shares of the TavanTolgoi deposit soon to its citizens, thereby increasing the available capital and liquidity of the population as a whole as well as giving everyone the opportunity to trade on the Stock Exchange. The development of the Mongolian Stock Exchange will now go through enormous changes as the LSE takes over, it is thought that commercial banks will be allowed to trade and obtain brokers licenses for the MSE, this move is pushed for by the government as they want to increase liquidity and the number of brokers.
A negative impact this could of course have, is a re-run of the global financial crisis where mortgages are traded openly as a commodity on markets and are then repackaged and resold endlessly to investors and insurance companies. Thereby placing the mortgage takes the most at risk. The LSE has already made it clear that the biggest challenge faced by the MSE and by introducing new players on the MSE is simply a question of HR. Will there be sufficient people who can understand and operate a stock exchange within the commercial banks and the already existing brokers. It will take another few years for the new generation to really understand the mechanisms of the market and how a secondary mortgage market could feasibly operate. It is further feared that the government itself might not be fully aware of all the implications of introducing a secondary mortgage market on the MSE.
Source : Gogo.mn
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