Mongolian bourse eyes boom in stock market listings
(Reuters) - The market capitalisation of companies listed on the Mongolian Stock Exchange (MSE) could leap more than 30-fold over the next three to five years, boosted by privatisations and new regulations, the chief executive of the bourse said on Thursday.
Mineral-rich Mongolia, a massive landlocked nation of fewer than 3 million people, has ambitions to become a destination for mining investment and has been working with the London Stock Exchange to modernise and develop its capital markets.
MSE Chief Executive Altai Khangai told a Mongolian Investment Summit in London that a new securities market law was expected to be passed in the next month which would lay out rules for new listings as well as enable dual listings.
He predicted the combined size of companies on the MSE could reach $45 billion in the next three to five years from about $1.3 billion currently, helped by the government's plans for privatisations as well as flotations by Mongolian firms seeking growth capital and dual listings from international companies.
Mongolia is on index provider FTSE's watch list for possible admission to Frontier Market status which would boost liquidity.
"We are also in discussions with FTSE about setting up a FTSE Mongolia series of indices," Khangai said.
Mongolia signed a partnership with the LSE in 2011, which included the provision of technology, advice and training.
Alastair Walmsley, Head of Primary Markets at the LSE, said significant progress had been made in developing the market.
"Much work remains to be done," he told the summit.
"The success in driving liquidity in the Mongolian market is going to depend both on the expansion of the Mongolian domestic investor base ... but also of course accessing the international investor community given the constraints on size of that domestic investor base."
A long-awaited three-way Hong Kong, London and Ulan Bator listing by Mongolian miner Erdenes Tavan Tolgoi has been put off for at least two to three years while the mine is developed, a deputy minister told Reuters earlier this week.
Walmsley said the LSE had also had discussions with some Mongolian companies which might look to raise capital on London's Alternative Investment Market for smaller companies.
Mineral-rich Mongolia, a massive landlocked nation of fewer than 3 million people, has ambitions to become a destination for mining investment and has been working with the London Stock Exchange to modernise and develop its capital markets.
MSE Chief Executive Altai Khangai told a Mongolian Investment Summit in London that a new securities market law was expected to be passed in the next month which would lay out rules for new listings as well as enable dual listings.
He predicted the combined size of companies on the MSE could reach $45 billion in the next three to five years from about $1.3 billion currently, helped by the government's plans for privatisations as well as flotations by Mongolian firms seeking growth capital and dual listings from international companies.
Mongolia is on index provider FTSE's watch list for possible admission to Frontier Market status which would boost liquidity.
"We are also in discussions with FTSE about setting up a FTSE Mongolia series of indices," Khangai said.
Mongolia signed a partnership with the LSE in 2011, which included the provision of technology, advice and training.
Alastair Walmsley, Head of Primary Markets at the LSE, said significant progress had been made in developing the market.
"Much work remains to be done," he told the summit.
"The success in driving liquidity in the Mongolian market is going to depend both on the expansion of the Mongolian domestic investor base ... but also of course accessing the international investor community given the constraints on size of that domestic investor base."
A long-awaited three-way Hong Kong, London and Ulan Bator listing by Mongolian miner Erdenes Tavan Tolgoi has been put off for at least two to three years while the mine is developed, a deputy minister told Reuters earlier this week.
Walmsley said the LSE had also had discussions with some Mongolian companies which might look to raise capital on London's Alternative Investment Market for smaller companies.
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