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Friday, 29 May 2009 19:43 |
BCM Mongolia NewsWire Highlights
The Business Council of Mongolia aims to advocate increased trade and investment in Mongolia and serve as a forum for dialogue on the important business climate issues. Join us at Our Website
Business:
Goldman says “Worst is over,” especially in copper; BHP expects improvement, but no sharp rebound in demand; Copper trades near two-week high as share rally boosts outlook; New Russia-Mongolia joint venture has nothing to do with owning mining resources; Ivanhoe falls on concern Elbegdorj may delay OT agreement; Erdene finds new molybdenum deposits in Bayankhongor; Workers strike at Boroo Gold mine; Anod Bank workers postpone strike; TDB wins Reliable Tax Payer award; Khan Bank Forest Program spreads; Government does not want to privatize Erdenet; Korean Air gets medal for environmental efforts; Wool worth MNT500 million lost in Erdenet Carpet fire; Mining conference in Erdenet; Rio Tinto (NYSE:RTP) sees Chinalco deal as still "evolving"; Rio Tinto (NYSE:RTP) must change Chinalco offer, Merrill says; ‘Factbox’ on projects at stake in Mongolia.
Economy:
Construction companies lower apartment prices; New levies on coal export; Japan to execute projects worth USD39 million; Russian leader sees joint ventures as part of development strategy; New World Bank strategy to help Mongolia withstand impact of downturn; International trade fair for food sector SMEs on June 11; Car prices fall, but sales fall more.
Politics:
Tally gives Elbegdorj 51.24% of votes, and 47.44% to Enkhbayar; Result greeted with generosity, grace; Victory followed pledge to better distribute mining wealth; Campaign promised mineral wealth will not be taken by foreign companies; People’s desire for change helps Elbegdorj win election; Victory could help smooth negotiations; Result could complicate Oyu Tolgoi deal, fear analysts; Mongolians expect more from mineral riches; U.S. State Department congratulates Mongolians on election; Mongolia attends its first ASEM Foreign Ministers' Meeting; Drunk hurls shoe at Elbegdorj, jailed for 21 days; Unused land may be taken back; Most elevators in poor condition; Pre-poll alliance likely to end; 15 jointly honored for being 2.7 millionth Mongolian; Kuwait to give USD9 million to research center; Police urge people to leave their cars home on Sunday; Fires enter China from Mongolia.
LEAD STORIES:
GOLDMAN SAYS “WORST IS OVER,” ESPECIALLY IN COPPER
The “worst is over” for raw materials demand and investors should increase investment in companies including BHP Billiton Ltd. (NYSE:BHP), according to Goldman Sachs JBWere Pty. “We are becoming increasingly confident that the period of weakest demand for raw materials is behind us,” analysts led by Melbourne-based Malcolm Southwood have said in a report. “We have also seen the bottom of the price cycle for base metals, and particularly for copper, which remains the most supply-constrained, and therefore our preferred commodity for investment exposure.” Rio Tinto Group (NYSE:RTP), the third-largest mining company, is hopeful of a “V-shape” recovery in China, the world’s biggest metals buyer, an executive said today. The Asian nation increased imports of copper, aluminum and iron ore to a record in April as buyers replenished stockpiles for the country’s 4 trillion USD586 billion stimulus. “The rate of copper and iron ore imports into China has been extraordinary and certainly implies a degree of restocking,” Goldman’s Southwood said. “The bottom line here is that we think economic sentiment, demand for raw materials, and commodities prices will be better in 12 months’ time and 24 months’ time than they are now.”
Source: Bloomberg.com
CONSTRUCTION COMPANIES LOWER APARTMENT PRICES
Some 130 companies producing construction materials as well as construction companies, leasing companies, and real estate agents are participating in the Barilga Sale 2009 fair where apartments will be sold at a 30% discount to generate demand. Some companies have gone further, offering one room free to those buying a 3-room apartment. Work on about 284 apartment complexes has become stalled for lack of funds and the companies, desperate to get back in business, are pinning their hopes on the present offers.
Source: Odriin son
NEW WORLD BANK STRATEGY TO HELP MONGOLIA WITHSTAND IMPACT OF DOWNTURN
The World Bank’s Board has endorsed a new strategy of support for Mongolia as the country comes to terms with the short and long-term impacts of the global economic downturn. A new interim strategy, approved late last week, provides a framework of support for the next 18 months while economic conditions in Mongolia stabilize. Its goal is to support the Government of Mongolia to address urgent crisis needs while also addressing longer term reforms needed to reduce the impact of future shocks. "It focuses on three key areas: improving fiscal sustainability in a mineral-based economy; protecting the poor and vulnerable; and encouraging transparent and prudent mining investments and a more competitive and stable medium-term business investment climate," the World Bank has announced. Mr. Arshad Sayed, the Bank’s Country Manager for Mongolia, said: “The global economic crisis has highlighted some key areas of vulnerability for Mongolia. This strategy will help the country deal with the short-term crisis that is especially hitting the country’s poorest people, while also working towards a more sustainable economic future.”
Since the country’s 1990 transition to a market-based economy, Mongolia has seen considerable development success, with gross national income per capita increasing from USD390 in 1995 to USD1,290 in 2007. But late last year, after a sustained period of rapid economic growth propelled by high mineral prices, the country entered a steep economic downturn. Sharp drops in the price of Mongolia’s export commodities, particularly copper, led to major declines in government revenues. As a result, Mongolia has been among East Asia’s hardest hit countries by the global economic crisis.
Growth is projected to slow from 9.0 percent in 2008 to 2-3 percent in 2009, and the external current account swung from a surplus of 4.4 percent of GDP in 2007 to a 9.6 percent deficit in 2008. Poor and vulnerable groups are especially at risk due to rising unemployment, declining prices for raw materials in the livestock sector and recent inflation. The Government has responded with an ambitious short-term macroeconomic program to navigate impacts of the global crisis and has begun to put in place policy reforms to make the economy more resilient in the medium-term.
Source: The Financial Times (The Financial.com)
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Last Updated on Saturday, 30 May 2009 13:06 |
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