FEDERATION OF EURO-ASIAN STOCK EXCHANGES
ANNUAL REPORT APRIL 2011
MONGOLIAN STOCK EXCHANGE
We are focusing on creating a favorable
legal environment and better regulation in
the capital markets.
Altai Khangai
Acting Chief Executive Office
We would like to express our warm greetings
and best wishes to all of you on the occasion
of the 20th anniversary of Mongolian Stock
Exchange.
During the last 20 years MSE has encountered
several challenging years, as well as, even
more years of accomplishments. In total, 474
Joint stock companies have been listed on
MSE with the stock trading value reaching
262.5 bln MNT, while values of Government
and Corporate bond trading reached 215.1 bln
MNT respectively. The number of Broker-
Dealer companies with special licenses to
operate in the Securities market reached 45,
and they are currently servicing about 450,000
individual investors and clients. Total dividend
distribution has reached 109.6 bln MNT.
Mongolian Government is increasingly
recognizing the importance of the capital
markets in development of the national
economy and focusing on its expansion. We
would like to emphasize on the initiative to
distribute shares of “Erdenes Tavan Tolgoi”
JSC, the holder of massive coking coal
deposit, to all citizens of Mongolia and to local
HISTORY AND DEVELOPMENT
Mongolian Stock Exchange was established on
January 18th of 1991, as the official and only
stock exchange of Mongolia, and throughout
this relatively brief history, the exchange was
able to achieve remarkable growth in tandem
with the robust economic performance of
Mongolia.
MSE serves the domestic cash equity market
with 366 listed companies and a market
capitalization of 1.373 trillion tugriks (US$ 1.07
billion) as on December 31, 2010.
private entities, and believe that conducting
open-market trading of its shares will
accelerate the growth of the capital markets in
Mongolia and will be a crucial point of its
development.
In the recent years, the Parliament and
Government of Mongolia has issued number
of important policy documents on
development and improvement of current legal
environment in the capital market. In order to
modernize in compliance with international
standards and to enhance the development of
the capital markets, the Securities Law is
being re-drafted and will soon be submitted to
the Parliament. In 2009, the Financial
Regulatory Committee of Mongolia has issued
“Prime Objectives of the Stock Market
Development Program in 2009-2012”.
We are focusing on engaging internationally
recognized consultants and institutions in
processing the draft of applicable rules and
regulations as well as drafting of laws.
Consequently, this will create a favorable legal
environment and better regulation in the
capital markets.
On September 17, 2010, Mongolian Stock
Exchange has conducted Government Bond
trading worth 30.0 billion tugriks consisting of
3,000 pieces of ordinary Government Bond.
In December 2010, Mongolian Stock Exchange
has concluded Strategic Partnership Agreement
with London Stock Exchange. MSE has
concluded MoU on Cooperation with 8 Stock
Exchanges in the world, such as Tokyo Stock
Exchange, Korea Exchange etc. Also,
Mongolian Stock Exchange is a member of two
stock exchange associations, namely, it is a
member of Federation of Euroasian Stock
Exchanges and Asia and Oceania Stock
Exchange Federation
In December of 2010, the State Property
Committee of Mongolia has signed a long-
term Strategic Partnership Agreement with
London Stock Exchange Group (LSEG) to
restructure and develop the Mongolian Stock
Exchange. Based on the agreement, LSEG will
cooperate with MSE at the administrative and
managerial levels and address the issues that
require immediate attention. There is an
absolute necessity to create a favorable legal
framework for capital markets, improve the
market infrastructure and introduce a world-
class trading platform to upgrade MSE and
the clearing, settlement depositary system in
line with international standards. It has also
become essential to increase domestic capital
investment and the competiveness of the
capital market, to enhance liquidity in the
market, to protect the interests of investors, to
mitigate the non-market risks, as well as, to
improve the human resource productivity.
We would like to thank and wish happiness,
health and prosperity to all individual and
institutional investors, professional
organizations and issuers for your input in the
development of capital markets in Mongolia.
FUTURE OUTLOOK
In 2011 MSE will:
•Increase institutional participation
•Attract more foreign investors
•Enhance the quality of market intermediation
•Strengthen the equity and debt markets
•Conduct privatization of state assets
•Invest in the social infrastructure
•Develop human resources
and;
•Promote the implementation of international
best practices
•Seek to introduce new financial product on the
Stock Exchange
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