Mongolian Stock Exchange -2007 English

FaCt Book

2007

mongolian stock exchange

taBLE oF CoNtENtS MESSaGE FRoM tHE CEo 2007 ECoNoMICaL REVIEW

5 6

MSE INtRoDUCtIoN  Mission statement  History  Company structure  Organizational chart  MSE Highlights

10 10 10 11 13

FINaNCIaL StatEMENt  Balance sheet  Income statement

14 15

HIStoRICaL tIMELINE

16

LIStING at MSE  Listing procedures  Listing criteria  Listing fee  Listed companies

18 18 19 20

tRaDING  Trading process and mechanism  Market highlights  Stock trading  30 Active Traded Stocks  Bond trading  Clearing and Settlement

24 25 26 26 27 28

MSE INDEXES  Top-20 indexes, 2006-2007

30

MEMBER CoMPaNIES      

Legislations and Rules Application for membership Membership fee Member broker & dealer companies Stock trading volume of broker & dealer companies Contact information

34 34 34 34 34 36

MSE`S otHER aCtIVItES    

Information center Training center Sports competition Publications

StoCk PRICE tRENDS

38 38 38 38

39

3

mongolian stock exchange

4

mongolian stock exchange

MESSaGE FRoM tHE CEo On behalf of Mongolian Stock Exchange (MSE), I am pleased to present to you the Fact book of 2007. This booklet provides comprehensive information on performance of the Mongolian Stock exchanges and Mongolian securities market during 2007. In 2007 MSE has placed increased emphasis on such activities as: improving securities trading system, technology, providing utilizing beneficial, transparent, trustworthy trading environment, developing information disclosure and dissemination procedures, systematically educating investors, issuers and all capital market participants, also establishing connections with international financial and capital market participants and professional organizations. In 2007 Mongolian Stock Exchange has achieved impressive results. The total trading value has reached 102 576.8 mln MNT (Mongolian National Tugrug) that is 5.7 per cent increase compared to the same period last year. The total trading value consisted from 62 126.8 million MNT worth of stock trade and from 850.7 million MNT company bond trade and from government bond trade that summed at 39 599.3 MNT. Market capitalization of the listed companies reached 717.6 billion MNT which represents some 5.5 times increase compared to 2006. By the end of 2007 MSE’s top-20 index reached 10256.13 units. Highlights of our accomplishments can be noted as follows:  Organized event named “Capital Market development” with securities market professional organizations in order to introduce securities market operations to the public.  3000th trading has commenced with total transaction value of 1 billion MNT  “Dornod Autozam”, “High-B-Oil”, “Olloo” and “Tuul-Songino usni Noots” joint stock companies were listed on MSE and issued securities.  “Bats”, “CCP”, “Global Asset”, “Frontier”, “Bloomsbury Securities” broker dealer companies addmited for membership.  Renewed Trading Regulation and MSE’s Listing Rule.  A Memorandum of Understanding with Hong Kong Stock Exchange was signed. Also discussed further cooperation possibilities with Taiwan GreTai Securities Market in terms of developing and implementing “Mongol Bond” project.  Conducted preliminary studies on “Mongolian Stock Exchange technology, software reform and human resource capacity building” project with Korea Stock Exchange.  Established connections with Bloomberg and Reuters agencies, in order to disseminate MSE information to the world. Successful discussions were held on signing the Data Supply Agreements with both organizations.  Celebrated 17th Anniversary of MSE by organizing seminars, conferences, sponsored a movie called “Khubilai Khaan’s Decree” and screened to the public.  Letter of Intent signed with Korea Exchange on implementing “Mongolian Stock Exchange technology, software reform and human resource capacity building” project  Participated at both international and domestic seminars, trainings and organized joint seminars and trainings with foreign specialists. This year Mongolian Stock Exchange will be focusing on consolidating above successful results also on expanding the market, improving its operations to the international standards.

R.SODKHUU Chief Executive officer

5

mongolian stock exchange

2007 ECoNoMICaL REVIEW In 2007 Mongolia achieved high economic growth. Real GDP growth rate was 9.9 percent in 2007. Economic growth has been primarily driven by agriculture (which contributed 3.4 percentage points to economic growth), and services (which contributed 4.3 percentage points). For the preliminary result of 2007, total revenue and grants of General budget amounted to 1851.2 billion MNT* and total expenditure and net lending was 1749.2 billion MNT. The General Government budget overall balance was a surplus 102.0 billion MNT. The share of total revenue and grants, total expenditure and net lending and overall balance amounted 40.6, 38.4 and 2.2 percent respectively to the GDP. Current revenue of General Government amounted to 1843.7 billion MNT and current expenditure 1202.1 billion MNT. Inflation has picked up to reach 15.1 percent, the highest level in the decade. This marked increase in inflation is due to rapid monetary growth, public sector wage increases in the price of some main imports. Rapid monetary expansion continues. In 2007, money supply (M2) increased by 56.3% and currency issued in circulation by 48.5%. Total loans outstanding increased by 68.1% of which loans to private sector increased by 83.3%. Some monetization of the economy is still at work. Compared with other similar developing countries, the level of monetization in Mongolia is low. In 2006 for instance, low income countries have on average a ratio of M2 to GDP of 52 percent. Import growth has remained robust in 2007, led by strong economic growth which translated into sustained demand for consumption and investment goods. As a result, total external trade turnover equaled $4006.3 million and the total external trade balance turned to a deficit of $228.3 million. Compared to previous year, exports grew by 22.5 percent (reaching $1,888.9 million) and imports rose by 42.5 percent (reaching $2,117.3 million). Compared to 2006, tax revenue increased by 33.0 percent or 372.6 billion MNT, taxes on foreign trade increased by 42.2 percent or 0.4 billion MNT, value added tax increased by 9.1 percent or 21.9 billion MNT and excise tax increased by 33.6 percent or 33.6 billion MNT respectively.

6

*MNT stands for abbreviation of Mongolian National Tugrug - currency. 1 USD = 1175 MNT

mongolian stock exchange

ECoNoMY oF MoNGoLIa Basic Indexes ‘93

‘94

‘95

‘96

‘97

‘98

‘99

‘00

‘01

‘02

‘03

‘04

‘05

‘06

‘07

1. Annual growth of GDP (%)*

-3,0

2,3

6,3

2,4

4,0

3,5

3,2

1,1

1,0

4,0

5,5

10,6

6,2

7,4

9,9

2. Inflation rate

183,0

66,3

53,1

44,6

20,5

6,0

10,0

8,1

8,0

1,6

4,7

11,0

9,5

6,0

15,1

GDP growth rate

Inflation rate

12.0

200.0 180.0 160.0 140.0 120.0 100.0 80.0 60.0 40.0 20.0 0.0

10.0 8.0 6.0 4.0 2.0 0.0 -2.0

‘93 ‘94 ‘95 ‘96 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07

-4.0 ‘93

‘94

‘95

‘96

‘97

‘98

‘99

‘93 ‘94 ‘95 ‘96 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07

‘00

‘01

‘02

‘03

‘04

‘05

‘06

‘07

Export (USD in mln.)

382,6

356,1

473,3

424,3

568,5

462,3

454,2

535,8

521,5

524,0

600,2

Import (USD in mln.)

379,0

258,4

415,3

450,9

468,3

503,3

512,8

614,5

637,7

690,8

787,3

1011,6 853,3

1184,3 1064,9

1 485,6 1 542,8

2 117,3 1 889,0

616,5 535,8

713,8 697,4

764,5 837,8

1237,0 1360,4

1749,2 1851,2

3. Foreign trading

* In accordance with IMF methodology the volume and value of non-monetary gold is included in external trade export & import since 2002. The NSO have revised and estimated data of previous years accordingly, using Mongol Bank data

548,6 477,0

489,7 439,3

429,7 351,1

361,7 254,8

342,2 225,5

287,6 212,0

85,5 98,9

176,6 160,0

54,8

Expenditure***(MNT in bln.)

143,9 140,9

Revenue**(MNT in bln.)

61,6

4. State budget

** Privatization income is excluded *** Social security contribution is excluded to avoid duplication

7

mongolian stock exchange

Foreign trading

State budget

2250 2100 1950 1800 1650 1500 1350 1200 1050 900 750 600 450 300 150 0

2000 1800 1600 1400 1200 1000 800 600 400 200

8

213 168,5 1 209 847,0

‘07 2191,9 515,4 364,1 1 170,0

213 152,8 1 168,0 703,3

Source: monthly bulletin, yearbook of the National Statistical Office

‘06 332 245,0 1 165,0

188 134,6 1 125,0 470,1

‘04

1537

331,1 156,2 119 1 102,0

‘03

269 191,7 1 221,0

258,8 130,8 107 1 097,0

902,0

‘02

167,2 82,6 61,8

‘01

813,2

‘00

170,1 76,1 56,8

Ì2 Money (MNT in bln.)

‘99

693,5

Ì1 Money (MNT in bln.)

‘98

128,4 64,3 46,1

6. Currency issued in circulation (MNT in bln.)

‘97

473,6

5. Exchange rate MNT / US $

‘96

102,0 42,6 29,8

‘95

‘93 ‘94 ‘95 ‘96 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07

220,2 114,8 91,6 1 072,4

‘93 ‘94 ‘95 ‘96 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07

1170

0

‘05

MSE INTRODUCTION  Mission statement  History  Company structure  Organizational chart  MSE Highlights  Financial statement  Historical timeline

mongolian stock exchange

MISSIoN StatEMENt The mission statement of Mongolian Stock Exchange is to work profitably as contributing to the development of national economy by creating classical capital market, provide guaranteed protection for shareholders, build the opportunities for state and business entities to locate and utilize investment resources effectively through open and fair capital market in the long-term.

HIStoRY During the transitional period of central planned economy to market economy in Mongolia, many social and economic changes were made. One of those changes was the Government decision to establish Mongolian Stock Exchange in order to implement “the center of the reform program” which was set to privatize the state owned enterprises. Thus, on January 18th of 1991 Mongolian Stock Exchange was established. Auctions officially began on 7 February 1992; shares in three companies were auctioned off. The first day’s turnover was 16,000 shares, valued over 16 mln MNT (15,000 US$); that grew by over twelve times to 200,000 shares in March. Trading hours were restricted to two hours on one day per week, expanding to two five-hour days per week in July. During 1992-1995, 475 state owned entities total of 96.1 million shares worth of 8.2 billion MNT (7.0 million US$) were traded over the MSE. This proves that MSE was established to implement the privatization policy. Passing the Securities and Exchange law in 1994, Corporate Law in 1995 resulted in establishment of secondary market and 29 broker firms, which operated and financed by the MSE, were privatized, new statutes of the MSE were adopted by the Government resolution of 1995. With the start of secondary market activity, shares of over 38.8 billion MNT (32.1 million US$) have been traded in 1996-2004. Since the government bond trading in 2000, corporate bond trading in 2001 to date government bonds worth of 117.9 billion MNT (97.5 million US$), and corporate bonds worth of 9.9 billion tugrugs (8.2 million US$) have been traded. Revision to the securities and exchange law adopted by the Parliament in December 2002, stated the MSE as a business entity, which is allowed to carry out legal business services. Thus, according to the Government resolution, the MSE was reorganized as a profit making, state-owned shareholding company.

CoMPaNY StRUCtURE Mongolian Stock Exchange is the major player in the financial and securities markets of the country as well as a major contributor to the economy. Today stock exchange is operating with 7 main departments and 2 sub-units 2 centers, with 6 directors and over 40 staff members, specialists. The highest supreme decision making body of the MSE is the Board of Directors. State Property Committee nominates the 7 members of Board of Directors. The Chairman and Representatives are from Ministry of Finance, State Property Committee, Securities and Exchange Commission and member broker-dealers firms. The CEO of the MSE is nominated by State Property Committee and appointed by the Board of Directors. MSE directors are appointed by the Chief executive officer.

10

mongolian stock exchange

oRGaNIZatIoNaL CHaRt Shareholders Assembly (State property committee)

MSE Directors

Board of Directors

Auditor

Chief executive officer

Training center

Information center

Internal Services unit

Vice Director

Financial department

Security unit

Information and public relation department

Head of Administrative Division

Administrative Unit

Information and Technology Department

Surveillance and Monitoring Department

Listing Department

Trade and Research Department

Senior Vice Director

Internet center Workers canteen and housekeeping Farming and husbandry

MSE’S DEPaRtMENtS aND tHEIR RESPoNSIBILItIES: trade and Research Department Responsibilities:  To utilize market trade  To organize control and monitor the trading process  To perform stock watch  To calculate, produce, analyze data related to securities market products and services  To conduct researches and studies  To research and prospect new types of products and services Information and technology Department Responsibilities:  To develop the programs, software  Update the programs and build software safety, back up, restoring schemes  To install the internal networks, ensure servers and equipments normal operations  Provide technical aid to staff and repair services to the computers and equipments

11

mongolian stock exchange

administrative Division

       

Responsibilities: International Relations and cooperation Internal activities CEO Secretariat Manage document archive Manage and administer the Security unit Legal advise Training center To provide management policy of Administrative Unit and Information & Public Relations Department Listing and Surveillance Department

      

 

Responsibilities: Listing, de-listing securities, making amendments changes on listing To encourage listing, research different types of securities To establish listing criteria, rules policies and on listing categories To ensure corporate governance of listed companies, monitor and enforce fulfillment of rules and regulations To ensure shareholders right To manage membership admission process for brokerage and dealer firms To supervise and monitor trade /to conduct inspections on price fluctuation to take actions based on the inspection results or reports, announcements received from trade and research department / To conduct inspections on member broker dealer companies operations To receive and decide complaints, suggestions, requests regarding the members and listed companies operations Information and Public Relations Department

    

Responsibilities: To disseminate the information in respect to securities market and trading To organize press conference and advertising activities To publish the monthly magazine and bulletins To publicize Mongolian Stock Exchange’s operations To manage activities of Information Center Financial Department and Internal Services

   

Responsibilities: Financial management Accounting, bookkeeping Financial statements, paying bills Estimating costs, issuing guarantees Internal Services

   

12

Utilities supply Farming Workers canteen Housekeeping

mongolian stock exchange

MoNGoLIaN StoCk EXCHaNGE HIGHLIGHtS 1999-2007 1999

2000

2001

2002

2003

2004

2005

2006

2007

418

410

400

403

402

395

392

387

384

4 428,0

40482,8

41283,3

35847,6

49513,4

29832,1

55.701.0

131179,1

716 272,3

32,1

36,9

37,5

31,9

42,4

24,7

45,6

112,6

612,2

3 274,2

2 973,3

1 723,3

1 373,0

895,9

654,0

2.547.3

12 604,3

62 126,8

3,1

2,7

1,6

1,2

0,8

0,5

2,1

10,8

53,1

21,4

35,4

15,9

9,8

8,1

9,1

25,9

74,5

116,3

Value (MNT in mln.)

13,0

11,7

6,8

5,4

3,6

2,6

10,1

49,8

245,6

Volume (in thousands)

85,1

138,9

62,3

38,6

32,3

35,6

102,6

294,6

458,9

11132,1

30750,2

41690,7

21722,5

12463,8

6.767.7

4 461,5

39 599,3

1 204,3

2 958,0

2 988,3

2 776,5

2.663.7

960,9

850,7

1. Listed companies 2. Market capitalization (in mln.) In MNT In US dollar 3. Trading value (in mln.) In MNT In US dollar 4. Trading volume (in mln.) 5. Daily average

6. Bond trading value (MNT in bln.) Government Corporate 7. ÒÎÐ-20 index: High

274,2

506,3

963,0

1 450,4

1 045,5

910,7

1053,0

2 030,81

13 676,95

Low

192,1

260,4

479,8

803,7

541,8

477,6

502,2

988,04

2 031,88

Average

230,3

359,3

650,8

1 120,6

740,7

667,4

796,9

1 291,91

6 699,87

Close

255,7

469,9

814,0

933,9

895,9

585,7

1019,2

2 030,81

10 618,78

8. Number of transaction (in thousands)

60,8

29,5

14,7

14,8

13,5

13,0

9,1

11,6

28,9

9. Number of accounts in CD* (in thousands)

270,2

277,2

273,3

277,3

281,2

287,8

292,7

309,1

74,9

10. Member broker dealers company

41

42

42

34

26

25

24

25

30

11. Member investment funds

16

17

16

2

-

-

-

-

-

12. Exchange rate US$ / MNT**

1 072

1 097

1 102

1 125

1 168

1 209

1221

1165

1169,97

13. Inflation rate***

10,0

8,1

11,2

1,6

4,7

11,0

9,5

6,0

15,1

* - Securities Clearing House and Central Depository, Co.Ltd ** - The Bank of Mongolia *** - The National Statistical Office / December, 2007

13

mongolian stock exchange

FINaNCIaL StatEMENt BALANCE SHEET

(in MNT)

Assets Cash

2007 463,514,965

2006 113,442,072

2005 125,884,918

2004 64,918,163

2003 23,165,792

2002 129,272,475

Accounts receivable

29,777,518

37,582,857

42,774,229

128,721,495

243,116,718

1,403,676,701

Inventories

48,368,083

45,484,232

40,885,678

41,544,557

40,678,618

48,237,621

Current assets

174,030,331

36,963,255

70,000

689,147

416,764

656,548

Total current assets

715,690,898

233,472,417

209,614,833

235,873,362

307,377,891

1,581,843,345

Fixed assets

1,987,666,892

1,932,777,592

1,933,616,517

1,992,706,900

2,032,304,087

2,514,718,506

Accumulated depreciation

(245,204,715)

-295,903,457

(301,612,325)

-288,849,584

-285,610,935

-281,481,243

Total non-current assets

1,742,462,177

1,636,874,135

1,632,004,191

1,703,857,316

1,746,693,152

2,233,237,262

Total assets

2,458,153,075

1,870,346,551

1,841,619,024

1,939,730,678

2,054,071,043

3,815,080,607

share

-

-

836,872,929

dividend

-

-

323,540,486

bond

-

-

1,032,545

Liabilities Accounts payable

Other accounts payable

12,688,100

12,688,100

12,700,581

14,651,072

14,752,356

222,464,631

Total current liabilities

12,688,100

12,688,100

12,700,581

14,651,072

14,752,356

1,383,910,590

Total liabilities

12,688,100

12,688,100

12,700,581

14,651,072

14,752,356

1,383,910,590

1,867,708,800

1,791,969,748

1,784,969,748

1,873,832,870

1,866,899,108

2,265,886,585

7,862,828

7,554,728

7,484,628

7,359,368

7,398,678

7,282,199

for accounting period

511,759,371

21,669,908

(7,423,302)

-116,249,770

85,806

58,851,664

for previous period

56,083,976

34,414,068

41,837,370

158,001,333

158,001,333

99,149,570

Revaluation of fixed assets

2,050,000

2,050,000

2,050,000

2,050,000

6,933,762

Total equity

2,445,464,975

1,857,658,451

1,828,918,443

1,925,079,606

2,039,318,687

2,431,170,118

Total liabilities and equity

2,458,153,075

1,870,346,551

1,841,619,024

1,939,730,678

2,054,071,043

3,815,080,707

Shareholders’ equity Equity: State Special fund Retained earnings:

14

mongolian stock exchange

INCOME STATEMENT Revenues

(in MNT) 2007

2006

2005

2004

2003

2002

679 427 427

217 079 580

47 436 023

30 498 275

146 411 650

222 914 148

54 081 147

55 343 538

50 699 813

59 473 337

Securities transaction commission of: securities trading off-exchange trading Fees listing, member companies, research

144 965 270

Other

54 329 783

61 400 380

70 261 777

11 633 297

98 537 952

11 365 739

Total revenues

878 722 480

278 479 960

171 778 947

97 475 110

295 649 415

293 753 225

Salary, social insurance, incentives

119 174 964

86 101 307

70 012 268

72 569 598

81 179 186

73 408 874

Utilization expenses (electricity, gas, water)

10 742 460

7 045 833

7 769 574

7 581 641

9 751 429

9 187 507

Business trip, Board of Governors

72 966 070

27 970 482

16 572 160

16 871 583

23 705 226

20 692 486

Transportation, fuel, repairs

26 243 647

21 354 773

13 811 067

8 878 800

29 737 916

9 442 250

Raw materials

8 224 359

10 934 568

7 624 585

2 886 955

3 398 417

3 728 972

Depreciation

67 438 108

22 906 278

12 762 742

57 673 353

45 620 617

51 519 607

Advertising and promotion, training

9 580 470

13 902 022

6 567 778

2 649 299

5 733 854

6 180 086

Printing-and postage

13 721 515

12 001 692

11 203 937

6 607 967

17 514 023

11 773 027

Others

25 938 414

48 975 364

26 889 794

10 132 420

70 691 779

6 702 719

Total expenses

354 030 009

251 192 318

173 213 904

185 851 616

287 332 447

192 635 527

128 851

92 306

224 364

36 968

Expenses

Non-operating revenue Exchange rate changes, others Non-operating expenses Exchange rate changes, others

12 933 100

5 617 734

6 117 196

27 965 570

8 455 526

42 303 002

Operating profit / loss

511 759 371

21 669 908

(7 423 302)

-116 249 770

85 806

58 851 664

511 759 371

21 669 908

(7 423 302)

-116 249 770

85 806

58 851 664

511 759 371

21 669 908

(7 423 302)

-116 249 770

85 806

58 851 664

Extra- ordinary income Extra-ordinary expenses Profit before provision for Tax Income tax expenses Net profit / loss for accounting period

15

mongolian stock exchange

MSE HIStoRICaL tIMELINE 1991 1992 1994 1995

1996 1998

January

18

May February September November July July

22 07 26 14 01 31

august october February october

28 25 11 01

1999

august 25 September 10 November 01

2000

January

21

2001 2002

September November January June December

26 16 18 08 03

2003

March

26

March

26

2004

November 06 october 29

2005

March 30 November 01

2006

January June

18 15

July

19

January

4

august

1

august

6

august

21

2007

December 05 16

MSE established according to the Government decree No.22 Privatization law enacted. Primary market trading started. Securities law enacted. Mongolian Securities Commission established. Privatization of securities companies has started. Securities Dealers and Brokers Association founded. Secondary market trading started. The first trading day of the Government bond. Off-exchange trading started. The MSE joined as a full-member in Federation of Euro-Asian Stock Exchange A software for trading was introduced. 1000th trading day The MSE has started to calculate composite price index. The first Securities Company with foreign investment registered as a member of MSE Structure of the MSE reorganized. Trading of the Government bond restarted. 10th anniversary of the MSE. Corporate bond trading started. Memorandum of Understanding on Mutual Cooperation with Taiwan Stock Exchange was signed MSE was divided two independent organizations: “Mongolian Stock Exchange” “Securities Clearing House and Central Depository” MSE was reorganized as a profit making state owned Shareholding Company Shares of the MSE listed on the Stock Exchange. First time the special license has been issued to an Underwriting Company on security market “Information Center” of MSE established “Training center” of capital market was established. Celebrated 15th anniversary of MSE Memorandum of Understanding with Korea Ex change was signed Memorandum of Understanding with Istanbul Stock Exchange was signed FRC Announces 2007 as a “Financial Market Development Year” 3000th trading has commenced with total transaction val ue of 1 bln MNT Letter of Intent with GreTai Securities Market was signed Joint Project research has started with Korea Exchange Signed on Memorandum of Understanding on further cooperation with Hong Kong Stock Exchanges and Clearing Limited

LISTING AT MSE    

Listing procedures Listing criteria Listing fee Listed companies

mongolian stock exchange

LIStING PRoCEDURES Public issuing companies that interested to be listed at MSE must meet certain criteria with regard to their financial and operational conditions. Applicant companies are screened according to the relevant criteria of Securities Law and other rules regulations issued by Financial Regulatory Commission of Mongolia (FRC). Listing rules Listing and delisting all kind of securities its examination, classification and their transfer from one section to another, and its surveillance regulated by the “MSE Listing Rule”. On December 19th, 2007 the Board of Directors of Mongolian Stock Exchange has approved the new “Listing Rule”- this new rule will be effective from January 1st 2008. Main points of the is new Listing Rules are briefly described below. Complete (whole document) listing regulations available at MSE’s website (www.mse.mn). Listing procedures Applicant companies, who have fulfilled listing criteria and received approval from FRC, may apply for listing at MSE by submitting all required documents to MSE’s Listing Department. At first companies will be registered on the Registered Companies list and are required to issue their securities to public (IPO) within 1 year period. Once a company issues securities or does IPO, then the entity and its shares are transferred to the MSE’s Registered Securities List and a company receives permission to trade its securities.

LIStING CRItERIa To maintain the quality of its registered securities, MSE uses two different type of listing criteria: general and specific criteria. Specific listing criteria used for listing strategically important state owned entities, were as general criteria used for listing any other companies. Companies that fulfill one of above criterions are given permission to trade. Listing criteria for stocks Criteria Shareholders equity Value of non-current assets within the issuing securities Number of Shareholders Percentage of public offered securities Duration of corporate existence Income/loss amount

18

General criteria

Specific criteria

Above 10 mln MNT

Above MNT 10 mln

Not less than 10%

Not less than 20%

At least 50

At least 50

Not less than 30%

Not less than 10%

At least 1 year

At least 3 years

Must show some income. If the company is in loss, loss amount should be not higher than 30% of its total asset.

No criteria

mongolian stock exchange

Listing criteria for Bonds

Criteria Shareholders equity

General criteria Above MNT 10 mln

Specific criteria Above MNT 10 mln

Real estate assets size of the whole capital

Not less than 20%

Not less than 30%

Listing securities volume and value

From 50 thousand shares MNT 500 mln and above

From 100 thousand shares MNT 1 bln and above

Duration of corporate existence

At least 3 years permanent operation and well ran during last year

At least 5 years permanent operation

Guaranty

Security, guaranty is required. In some cases, guaranty is not required.

Security, guaranty is required. In some cases, guaranty is not required.

LIStING FEES Listed companies are required to shoulder part of various costs for the operation of the MSE’s business, in the form of listing fee. Fees vary depending on the volume and on the security type. Fees for issuing stocks Issuers shall be charged by an admittance fee and annual fee/member due when listing stocks. Admittance fee is payable only one time and shall be depend on total amount of face value of stocks. An annual fee is payable every year and is depended on the total amount of securities face value. Share issuer companies are charged to the MSE following types of fees: In MNT admittance fee

Fees (proportional fees)

10 000 000 – 500 000 000

500 000

500 000 001 – 5 000 000 000

750 000 + 0.02% for up 500 000 000

5 000 000 001 and above

1 700 000 + 0.01% for up 5 000 000 000

Joint Stock Company - 100% state owned companies

500 000

annual fee

Fees (proportional fees)

100 000 000

0.4%

100 000 001 – 500 000 000

400 000 + 0.001% for up 100 000 000

500 000 001 and above

800 000 + 0.00001% for up 500 000 000

Joint Stock Company – 100% state owned companies

400 000

If the company applied for listing in MSE and at the same time applied for issuing new securities, then the company is waived from registration fee of that year. Fees for issuing Bonds When registering bonds companies required to pay only an admittance fee which is deducted from the total traded value/amount (MNT) on the primary market. 19

mongolian stock exchange

Admittance fee

Fees (proportional fee)

Government and General obligation bond

0.05% of total traded value

Company bond

0.1% of total traded value

LIStED CoMPaNIES at MSE By the end of 2007, there were 384 joint stock companies listed at the Mongolian Stock Exchange among them 21 or 5.5% state owned, 35 or 9.1% partly owned by the state and total of 328 or 85.4% are fully privatized companies. In overall number of listed companies has decreased by 6 entities, however, number of listed securities have increased by 220.3 million in comparison to 2006. Total of 2.5 billion shares were listed at MSE of which 1.9 billion or 74.5% owned by the state, and 636.0 million shares or 25.5% owned by private investors. Overview of listed companies 2000-2007 2000

2001

2002

2003

2004

2005

2006

2007

411

401

403

402

395

392

387

384

Newly listed

5

-

8

12

4

3

3

5

Delisted

12

10

6

13

11

7

8

8

Newly listed shares

1 436,8

-

385 901,8

569 865,7

791 861,7

147 266,1

120 000,0

156 128,7

Additional listed shares

1 077,8

1 436,8

406,0

-

-

577 120,0

9,6

10000,00

Delisted shares

3 170,0

1 612,3

3 313,5

14 366,9

7 573,9

711 977,0

11 210,9

1 091,8

Shareholder’s meeting

176

152

148

119

117

136

138

153

Pay dividend

17

22

16

20

12

17

23

28

Listed companies

Listed &Delisted shares (in thousand)

Listed companies in 2007 Outstanding shares

Par value of shares ( MNT)

Date of listing

Shareholders

74 922

100

2007.02.10

State owned company

120 000 000

1 000

2007.04.13

Joint stock company

High-B-Oil

5 000 000

100

2007.05.02

Joint stock company

Darkhanii tumurlugiin uildver

21 353 312

1 000

2007.08.02

State owned company

Olloo

9 700 497

100

2007.09.12

Joint stock company

Company Dîrnod auto zam Tuul Songino usnii nuuts

20

mongolian stock exchange

Delisted companies in 2007 Company Artsat mogoi Teewerchin-7 UB barilga Tuulcashmere Altan tulguur Zuun turuun Mongol shuudan trans Auto diesel

Date of delisting 2007.01.05 2007.01.26 2007.02.27 2007.03.06 2007.07.17 2007.10.05 2007.10.26 2007.12.03

Reason Reorganization of company Reorganization of company Reorganization of company Reorganization of company Reorganization of company Reorganization of company Reorganization of company Reorganization of company

30 LEaDING CoMPaNIES LIStED oN MSE (By market capitalization)

Rank Name of stocks 1 Mon.Tsakh.Kholboo 2 Baganuur 3 Gobi 4 NIKI 5 Shivee ovoo 6 Zoos bank 7 BDSec 8 Tuul songino usnii nuuts 9 Shariin gol 10 Tavan tolgoi 11 Jenco tour bureau 12 Apu 13 Bayangol hotel 14 UID 15 Mongol shiltgeen 16 Mongol securities 17 Spirt bal buram 18 Makhimpex 19 UB hotel 20 Eermel 21 Erdenet khivs 22 Moninjbar 23 Darkhan nekhii 24 Zoos goyol 25 Talkh chicker 26 Berkh uul 27 Mongol emimpex 28 Darkhan makh-expo 29 Material impex 30 Takhi Co Total Percentage in total market capital

MNT in mln. 129 351,38 92 287,18 53 827,76 52 377,40 52 334,49 39 900,00 34 000,00 28 632,06 23 133,21 18 696,15 18 500,00 14 114,66 13 538,08 12 514,67 12 500,00 12 300,00 10 568,69 10 261,95 9 690,08 5 566,91 4 503,08 3 872,09 3 205,89 3 154,15 3 071,11 2 859,31 2 720,71 2 689,23 2 668,00 2 379,97 675 218,23 94,27%

21

mongolian stock exchange

CoMPaNIES aND SECURItEIS LIStED at MSE 2006-2007 (As of December 31st 2007) 2006

2007

Change

387

384

-6

59

56

-3

328

328

0

2,270,794,712

2,491,116,030

+220,321,318

1,866,939,156

1,855,073,030

- 11,866,126

403,855,556

636,043,697

+232,188,141

3

5

+2

-

1

+1

-

21,353,312

+21,353,312

3

4

+1

120,000,000

134 775 419

+14 775 419

1

1

0

9,617

10 000 000

+9 990 383

8

8

0

11,210,905

1,091,828

-10,119,077

Tender offer

8

8

0

Companies that delivered shareholders meeting minutes to MSE

3

6

+3

Total number of listed companies Type: State owned Private Total volume of listed securities (quantity) Ownership type: State Private investors

Companies that issued new securities Type: - State owned Volume of issued securities - IPO Volume of issued securities

Companies that issued securities of addional securities

addional Volume

Number of delisted companies Number of shares

22

TRADING AT MSE      

Trading process and mechanism Market highlights Stock trading 30 Active Traded Stocks Bond trading Clearing and Settlement

mongolian stock exchange

tRaDING PRoCESS aND MECHaNISM trading process All listed securities on MSE are traded through Exchange’s electronic trading platform in the Trading hall. The brokers enter all orders into the computer network located in the trading hall. The orders are automatically matched and executed. Once transactions have been completed the results are transmitted immediately to the broker’s computer systems. MSE monitors the market and supervises transactions in the MSE trading hall. The securities trading at MSE administered using two different auction methods: continuous auction and auction. Continues auction is where buy and sell orders interact with one another. All orders are placed by member Broker dealer companies and matched in accordance with the price priority and time priority rules. Under the price priority rule, a selling (buying) order with the lowest (highest) price takes precedence. Under the time priority rule, an earlier order takes precedence over others at the same time. The transaction is executed at the price, when buying and selling are matched at the same price. BRokER

Buy order

Investor

BRokER

Buy order

Mongolian Stock Exchange Buy order

Price prioriy

Sell order

498 499 500 501 502

Sell order

Sell order

Investor

time prioriy

trade Flow and Mechanism In auction trade buyers enter competitive bids and sellers enter competitive offers at the same time. The price of the security is traded represents the highest price that a buyer is willing to pay and the lowest price that a seller is willing to sell at. Matching bids and offers are then paired together and the orders are executed. Securities trading and its types

24

Two types of securities traded over the MSE these are: stocks and bonds. Following types of trade conducted using continues auction method:  stock’s primary market trade  stock’s secondary market trade  company’s bond primary market, secondary market trade  government and general obligation bond’s secondary market trade  derivatives trade

mongolian stock exchange

Following types of trade conducted using auction method:  Government and General obligation bond’s primary market trade  Government ownership securities trade  Trades executed by the order of law enforcement of authorized body  Securities portfolio trade Limitation Daily price change limit: securities’ price liquidation shall be fluctuated within 15% upper and lower sides on whole trading day. Trade of securities can be made by MNT and foreign currency, except Government and General obligation bonds. Trade unit by MNT must be measured by only wholesome tugrugs. Securities clearing fees In addition to brokerage fees, the following charges are payable from both selling and buying sides:  0.5% for MNT 100mln  0.4% for MNT100 mln to MNT 1 bln  0.3% for MNT 1 bln and above Trading hours: Monday to Friday from 11:00 a.m. to 12:00 noon for both bonds and stocks.

MaRkEt HIGHLIGHtS In 2007, there were 253 securities trades on Mongolian Stock Exchange, trading 307 stock companies 116.1 million shares, 134.2 thousand company bonds and 408.6 thousand Government bonds with total transaction value of 102.4 billion MNT. Comparing with last year, the total value of share trading was increased by 49.5 billion MNT or 5.0 times, the trading value of company bond was decreased to 110.2 million MNT or 11.5 percent and government bond was increased to 35.1 billion MNT or 8.9 times. SECURItIES tRaDING VoLUME aND VaLUE 1995-2007 No. of trading days 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

84 236 253 253 252 255 255 255 250 255 253 253 253

Trading volume (shares) Total Daily Ave. 6,6 39.87061 33.65989 33.07354 21.44667 148.51234 479.40410 792.13786 514.33490 208.21980 401.20000 220.70000 658.90200

78,4 106.0 133.0 130.7 85.1 143.2 78.7 65.4 65.2 80.3 175.1 319.3 502.9

Trading value (MNT) Total Daily Ave. 811,5 4,484.8 12 165,7 10 756,0 3 274,2 14 105.4 33 677.8 46 019.2 25 598.3 15 894.3 11 978.1 18 026.7 102 576.1

9,7 54.5 48.1 42,5 13.0 439.8 1309.5 2221.9 2760.5 4212.7 6799.8 2292.0 4221.0

25

mongolian stock exchange

Trading volume (mln shares) 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 0.0

Trading value (MNT in mln) 2007 12604.3 2006 2005 2547.4 2004 654.0 2003 895.9 2002 1.373.0 2001 1723.3 2000 2973.3 3274.2 1999 10756.0 1998 12165.7 1997 4340.5 1996 1995 811.5

116.1 74.5 25.9 9.1 8.1 9.8 15.9 35.4 21.4 33.1 33.7 24.1 6.6 50.0

100.0

150.0

0,0

62126.8

10000,0 20000,0 30000,0 40000,0 50000,0 60000,0 70000,0

StoCk tRaDING In 2007 of 116.1 mln shares worth 62.1 bln MNT, were traded during 253 trading sessions at MSE. In comparison to the previous year same period the total trading value has increased by 49.5 bln MNT or 4.9 times. Average price of the traded stock reached 535 MNT or increased by 366 MNT.

30 MoSt aCtIVE tRaDED StoCkS IN 2007 Rank

26

Name of stocks

Volume (tous.shares)

Rank

Name of stocks

Value (MNT. mln)

1

Jenco tour bureau

25,181,500

1

Tuul songino usnii nuuts

13,701,418,260

2

Mongol emimpex

17,604,600

2

Shariin gol

8,015,049,461

3

Berkh uul

16,219,988

3

Gobi

7,200,927,584

4

Tuul songino usnii nuuts

13,701,056

4

Baganuur

5,627,677,045

5

Moninjbar

12,195,006

5

Zoos bank

4,568,838,651

6

Olloo

8,774,614

6

3,463,453,620

7

High-B-Oil

4,299,052

7

8

Shariin gol

2,794,276

8

Shivee ovoo Jenco tour bureau Berkh uul

9

Zoos bank

2,209,815

9

NIKI

1,709,892,586

10

Baganuur

1,411,570

10

Moninjbar

1,581,731,848

11

Gobi

1,337,821

11

Olloo

1,332,634,284

12

Shivee ovoo

1,149,302

12

13

UID

1,144,771

13

14

Mongol shiltgeen

1,113,275

14

Tavan tolgoi

958,423,785

15

Auto impex

955,816

15

Makhimpex

849,388,766

16

NIKI

911,204

16

High-B Oil

514,145,005

17

UB buk

618,392

17

Mon.Tsakh. Kholboo

478,741,455

18

Makhimpex

603,056

18

Bayangol hotel

465,940,797

Mongol shiltgeen Mongol emimpex

3,127,936,103 2,011,761,280

1,285,771,948 1,197,112,800

mongolian stock exchange

19

ZGMS

320,500

19

UB buk

459,691,366

20

Dornod

270,725

20

UID

417,586,307

21

Material impex

215,908

21

Tumriin zavod

401,193,000

22

Tegsh

168,497

22

Material impex

325,027,960

23

Mongol savkhi

166,630

23

BDSec

291,158,770

24

BDSec

145,581

24

Auto impex

260,574,243

25

Sonsgolon barmat

143,380

25

Darkhan makh-expo

210,593,084

26

Torgon ur

138,722

26

Dornod autozam

189,830,048

27

Mon.Tsakh. Kholboo

104,335

27

Tegsh

164,734,087

28

Kherlen khivs

103,800

28

Spirt bal buram

150,946,337

29

Dornod autozam

97,249

29

Khash ord

108,299,080

30

Darkhan makhexpo

84,320

30

UB hotel

84,588,808

Percentage in all stocks

98.37

98.44

114,184,761

61,155,068,368

Total

BoND tRaDING The total trading volume of the bonds in 2007 was 542.8 thousand and the total trading value amounted to 40.5 billion MNT, of which 97.9% were Government bond and 2,1% were Company bond. On the MSE Government and corporate bonds traded in market and nominal prices, respectively. BOND TRADING VALUE BY INVESTMENTS Government bond trading Purchased (by investors) Individuals Business Com. %

Year

Total issued

1996

114,3

2000

11 132,1

9 810,7

88,1

1 315,4

2001

30 647,9

30 452,1

99,4

2002

41 690,7

41 115,8

2003

21 722,5

2004

Banks

%

%

144,3

100,0

11,8

6,0

0,1

119,6

0,4

76,2

0,2

98,6

574,6

1,3

27,3

0,1

21 625,7

99,6

46,0

0,2

50,8

0,2

12 463,8

12 463,8

100,0

0,0

0,0

0,0

0,0

2005

6 767,7

6 767,7

100,0

0,0

0,0

0,0

0,0

2006

4 461,5

4 461,5

100,0

0,0

0,0

0,0

0,0

2007

39 599,3

39 539,3

99,8

59,3

0,2

0,8

0,002

27

mongolian stock exchange

Corporate bond trading Purchased bonds by investors (MNT in mln.)

Year

Total issued

Banks

%

Business Com.

%

Individuals

%

2001

1 200,0

592,3

49,4

50,6

4,2

557,2

46,4

2002

2 955,5

1 349,6

45,7

530,0

17,9

1 075,9

36,4

2003

2 737,4

1 589,0

58,0

882,6

32,2

265,8

9,7

2004

2 776,5

2 498,3

90,0

147,0

5,3

131,2

4,7

2005

2 663,7

1612,0

60,5

287,2

10,8

764,5

28,7

2006

960,9

0,0

0,0

446,8

46,5

514,1

53,5

2007

850,0

0,0

0,0

225,5

26,5

625,2

73,5

CLEaRING aND SEttLEMENt Clearing and Settlement of securities are executed through the “Securities Clearing House & Central Depository” (SCHCD) Co.Ltd. All listed securities on the MSE are deposited in dematerialized form with SCHCD. The clearing and settlement of securities is performed without the physical transfer of certificates between seller and buyer. This method enable to be cleared and settled on the day the transaction is executed for Government and Corporate bonds and on the next business day following the day of transaction for shares. The settlement of Government and corporate bonds transactions is executed on the contract day. Anyone who wants to participate in securities trading must open an account in the Securities Clearing House and Central Depository. The Securities Clearing House and Central Depository is the depository of securities in registered form and cash resources of securities market participants. To assure quick and reliable access to this depository, clients must use a member securities company as an intermediary. A client must have only one account in the Securities Clearing House and Central Depository, but can have more than one account with broker-dealer companies. Market Hours of Operation Mongolian Stock Exchange has trading hours of 11:00 am to 12:00 am from Monday to Friday, with the exception of the market holidays listed below.

28

MSE INDEXES  Top-20 index, 2006-2007

mongolian stock exchange

MSE INDEXES Mongolian Stock Exchange calculates total of 9 Indexes these are: 2 main Indexes:  Top-20 index, which consists of securities from top 20 companies that listed at MSE  Composite index, which consists from all companies that listed at MSE 7 Sector based indexes. Sector Index calculated from combination of top 10 companies that represent below sectors:  Mining-10  Agriculture-10  Industry-10  Trade and Service-10  Tourism-10  Construction-10  Transportation-10 top-20 index MSE started calculating the Top 20 since the opening of secondary market (cash trading). This index is the main indicator of the changes in aggregate market value of the MSE’s 20 companies that lead the market. The basket for Top-20 Index renewed once in 6 months. Market capitalization and average daily transaction values are the main criteria for the companies to be included on the Top-20 basket. Composite Index On September 20, 1999 the MSE introduced a new index called “MSE composite index”. The MSE composite index basket consists of all 384 listed companies stocks and uses same calculation methods as Top-20 index. Period of Index Calculation Top-20 index is calculated by at the close of a trading session. The changes in the indexes are calculated by comparing to the indexes of the previous day trading session.

top-20 Index, 2006-2007 14000 13000 12000 11000 10000 9000 8000 7000 6000 5000 4000 3000 2000 1000

30

0 06

07

mongolian stock exchange

LISt oF CoMPaNIES tHat CoMPLEtE tHE toP-20 INDEX oF MoNGoLIaN StoCk EXCHaNGE

Ranking

Code

As of January, 2008

1

GOBI

53,827,762,500

53,892,286

3

354

2

BAGANUUR

92,287,184,000

43,654,370

4

396

3

SHIVEE OVOO

52,334,493,900

26,410,638

5

460

4

ZOOS BANK

39,900,000,000

22,355,615

6

520

5

NICI

52,377,400,000

12,741,977

8

428

6

SHARIN GOL

23,133,213,411

63,064,993

9

309

7

TAVAN TOLGOI

18,696,146,000

5,891,544

11

458

8

JENCO TOUR BUREAU

18,500,000,000

19,904,324

11

521

9

MON.TSAHILGAAN HOLBOO

129,351,380,000

3,353,558

13

209

10

BAYANGOL ZB

13,538,080,000

3,294,527

14

13

11

MONGOL SHILTGEEN

12,500,000,000

9,830,946

15

517

12

ULSIIN IKH DELGUUR

12,514,669,000

2,851,976

16

484

13

BDSEC

34,000,000,000

2,256,376

19

522

14

MAKH IMPEX

10,261,946,700

1,773,069

20

208

15

MONINJBAR

3,872,092,852

3,987,444

22

25

16

SPIRT BAL BURAM

10,568,691,000

980,714

22

46

17

ULAANBAATAR ZB

9,690,083,300

608,453

24

3

18

EERMEL

5,566,912,000

378,473

25

191

19

APU

14,114,663,000

317,171

27

90

20

MATERIALIMPEX

2,668,001,700

2,406,425

29

379

#

Security name

Market Capitalization by MNT

Average daily trade by MNT

By the end of 2007, following 5 companies from the TOP -20 INDEX basket: Berkh Uul, Mongol Impex, Darkhan Makh Expo, Talkh Chiher, Mongol Savkhi were replaced with: Jenco Tour Bureau, BDSec, Shariin Gol, APU, Ulaanbaatar ZB, while 15 other companies remained in the Index basket.

31

mongolian stock exchange

TOP-20 INDEX IN 2007 (Daily) Month

1

2

3

2,161.93

2,467.24

2,148.82

2,493.67

4

5

6

7

8

9

10

11

8,213.07

11,692.68

10,449.58

11,391.43

10,342.15

12

Day 1

32

2

2,031.88

3

2,910.40 3,027.24

2,876.35

4,402.37

8,246.99

2,044.57

3,001.45

2,851.77

4,300.74

8,327.99

4

2,051.39

3,017.47

2,855.49

5

2,057.25

11,191.57

13,528.90

11,499.69

3,404.80

4,473.54

6

2,181.70

2,561.70

3,038.14

3,469.68

4,551.39

7

2,203.72

2,596.54

9

2,071.70

2,213.56

10

2,637.78

9,441.35

13,676.95

3,038.34

2,212.34

9,444.85

4,473.55

2,526.73

2,067.97

11,450.30

3,340.29

2,146.65

8

13,519.11

10,387.44

9,458.54

8,386.94

13,276.08

10,589.18

9,588.42

13,200.86

10,625.45

9,517.48

2,835.41

3,511.56

8,597.58

2,828.38

3,538.26

8,698.65

11,637.23

10,403.56

11,596.98

10,324.66

3,043.50

2,782.87

4,925.45

9,801.80

2,076.62

2,964.35

2,784.18

4,926.27

10,051.23

11

2,076.51

2,964.76

2,831.79

12

2,083.67

13,054.17

11,565.33

9,847.83

3,893.44

12,896.89

11,544.66

9,878.63

12,407.35

11,525.91

2,222.77

2,637.33

2,972.56

4,013.31

13

2,225.14

2,660.62

2,955.92

4,019.47

10,360.44

14

2,229.63

2,681.57

2,910.20

4,033.76

10,538.80

2,902.04

4,117.14

10,558.26

11,404.84

10,204.77

11,229.19

10,098.60

15

2,083.67

2,230.62

2,725.59

16

2,093.44

2,278.17

2,725.84

17

2,955.92

2,909.28

7,521.44

10,959.97

2,084.87

2,963.67

2,907.22

7,542.98

11,141.56

18

2,095.97

2,964.93

2,927.93

19

2,133.08

7,735.61

3,141.60 3,194.90

22

2,139.03

2,309.43

2,901.36

23

2,139.17

2,309.43

2,976.91

24

10,049.47

10,557.37

4,387.53

11,325.04

11,123.27

9,981.59

10,960.01

9,999.68

7,914.68

11,720.42

25

2,146.10

2,919.05

3,276.72

26

2,147.06

10,676.17

10,558.94

12,511.07

10,799.34

10,452.56

4,360.39

8,131.94

27

2,397.43

2,988.73

2,914.94

4,390.00

7,772.49

28

2,431.10

2,996.82

3,275.10 3,280.89

2152.55

2431.10

3025.00

3043.50

3336.29

Low

2031.88

2146.65

2467.24

2911.32

Average

2101.10

2253.51

2770.65

2970.56

10,568.33

12,169.67

2,918.35

High

10,860.23

8,092.75

3,012.10

2,152.55

11,788.34

4,422.74

2,342.35

31

10,261.85

11,906.43

3,285.43

2,911.32

10,052.36

11,292.50

2,937.43

3,019.26

9,978.50

4,241.67

2,146.01

2,149.87

10,006.11

10,326.00

11,510.76

30

11,163.71

9,989.62

7,863.78

3,025.00

11,890.34

11,915.63

3,208.20

2,151.77

9,940.51

11,154.56

2,954.63

29

10,247.69

11,216.68

4,287.15

2,877.24

12,063.14

11,860.41

2,955.81

2,287.28

9,854.43

11,187.53

7,650.88

21

10,249.96

11,731.70

4,147.69

2,870.83

11,890.05

7,573.30

2,961.99

2,284.64

9,904.88

4,110.33

2,800.67

20

10,284.90

11,864.06

12,131.72

9,954.37

10,281.24

4,441.78

11,940.81

11,814.43

9,852.63

10,170.65

4,408.17

11,714.22

10,783.46

9,647.36

10,256.13

9,640.15

3,282.40

8,066.76

12,157.40

10,785.22

3,336.29

8,122.64

12,712.45

10,657.09

4441.78

8131.94

12712.45

13676.95

11692.68

10625.45

10568.33

2782.87

3340.29

4300.74

8213.07

11731.70

10657.09

9640.15

9441.35

3017.17

4026.96

6633.82

10490.24

12461.66

11214.89

10160.72

10014.03

MEMBER COMPANIES      

Legislations and Rules Application for membership Membership fee Member broker & dealer companies Stock trading volume of broker & dealer companies Contact information



mongolian stock exchange

LEGISLatIoNS aND RULES FoR BRokERaGE FIRMS Securities trade orders executed by only member broker-dealers companies at the MSE. Membership, terms conditions requirements, procedures and fees are stipulated in the “Membership Rule” of MSE. Minimum owner’s equity to establish broker and dealer company must be no less than 50, 0 million MNT. If the broker and dealer company holds licenses that permit them to offer several types of services to their clients, the owner’s equity of that company should be increased depending on the special permissions that the company acquired. aPPLICatIoN FoR MEMBERSHIP A legal entity desiring to become a member broker dealer company of the MSE must submit an application for membership in the form supplied by the Exchange and requisite documents in accordance with the regulations. The membership admittance is decided by the directors meeting at MSE. MEMBERSHIP FEE Item Fixed amount --------------------------------------------------------------------------------------------------------------------------------------------------1. Admission fee MNT 3.0 mln (once) 2. Cost of brokerage seat MNT 9.0 mln (once) 3. Annual fee MNT 500.0 thousand from a regular member Brokerage and dealer companies service its customers in accordance with the agreement and brokerage commission that set at 1.0-2.0 percent of the total trading value. Besides membership fee MSE charges commissions from the transactions complete by its members. The fixed amount of fees payable by the members may be amended and determined by the Board of Directors. Member Broker Dealer, Underwriting and Consulting Firms at MSE By the end of 2007, MSE had total of 30 broker dealer, underwriting and investment consulting firms, among them two 100% foreign owned and 5 partly foreign invested, 23 local broker dealer firms operate.7 firms from 30 members has gained special permission to offer underwriting service for their clients and two firms are able to provide investment consulting services in Mongolian Securities market. MEMBER BRokER-DEaLER CoMPaNIES Stock Trading Volume and Value by Broker-Dealers Companies in 2007

Broker dealers company

34

Purchased Volume Value (thous. (MNT in shares) mln.)

Sold Rank

Broker dealers company

Volume (thous. shares)

Value (MNT in mln.)

BDSEC

67,823.3

41,337.9

1

BDSEC

73,254.8

35,024.9

GLOBAL ASSET

2,803.8

6,225.5

2

DELGERKHANGAI

5,048.8

13,199.2

DELGERKHANGAI

7,208.4

3,395.6

3

WORLDKEY

2,272.1

3,266.6

WORLD KEY

2,112.1

2,186.0

4

ZERGED

17,886.4

1,587.6

mongolian stock exchange

ZERGED

18,227.2

1,357.4

5

BULGAN BROKER

1,782.6

1,321.6

DARKHAN BROKER

3,775.6

1,170.4

6

ARGAI BEST

770.8

1,023.7

KHANSH INVEST

1,496.3

1,110.6

7

DARKHAN BROKER

2,104.4

843.4

BATS

1,779.0

969.5

8

BATS

1,159.0

635.4

ALTAN SAN

1,715.5

791.5

9

MONSEC

555.4

530.0

ARGAI BEST

1,568.4

700.7

10

MERGEN SANAA

594.8

453.0

CHANDMANI BAYAN

1,891.7

596.7

11

GENDEX

552.3

440.1

664.6

588.0

12

CHANDMANI BAYAN

683.6

438.2

BULGAN BROKER

1,349.5

326.6

13

MONGOL SECURITIES

441.2

428.3

MERGEN SANAA

347.0

224.2

14

ERDENEST

543.7

325.2

MONSEC

646.8

223.8

15

TAVAN BOGD

157.7

273.2

MONGOL SECURITIES

542.4

197.9

16

MASDAQ

256.5

266.0

SANAR

382.5

115.4

17

KHANSH INVEST

363.7

260.6

ERDENEST

242.1

113.9

18

GLOBAL ASSET

93.0

197.8

MASDAQ

419.6

94.6

19

CCP

548.5

135.3

CCP

153.9

92.2

20

ALTAN SAN

86.0

133.4

BATS INVEST

238.2

73.3

21

UNDURKHAAN INVEST

98.3

110.8

TAVAN BOGD

300.4

60.6

22

ALTAN KHOROMSOG

88.4

108.8

FRONTIER

28.2

53.0

23

SANAR

163.4

94.3

ALTAN KHOROMSOG

160.5

50.0

24

NIKI

38.7

91.1

UNDURKHAAN INVEST

98.6

33.0

25

BATS INVEST

163.5

69.3

BLOOMSBURY

87.1

18.1

26

BUMBAT ALTAI

61.8

67.3

NIKI

31.1

12.2

27

MUNKHUD

207.6

61.9

BUMBAT ALTAI

9.5

7.6

28

BLOOMSBURY

4.8

1.6

MUNKHUD

0.7

0.4

29

FRONTIER

0.0

0.0

116,104

62,127

109,982.0

61,388.7

GENDEX

TOTAL

35

mongolian stock exchange

CoNtaCt INFoRMatIoN No

36

Broker dealers company

Head office

Fax

Trading floor

Director

E-mail

345656

313765

D.Munkhsaihan

[email protected]

1

AJNAI INVEST

345757

2

ALTAN KHOROMSOG

455822

313648

T.Munkhur

3

ALTAN SAN

99118082

310683

TS.Tsend

[email protected]

4

ARGAI BEST

99113297

313324

D.Aruinbold

[email protected]

5

BATSINVEST

320773

323774

L.Javzmaa

6

BATS

326042

-

D.Batnasan

[email protected]

7

BDSEC

321763

313372

D.Dayanbilguun

[email protected]

8

BLOOMSBURY

356060

310487

B. Myagmarsuren

9

BULGAN BROKER

322708

313323

N.Amgalan

10

BUMBAT ALTAI

99431203

-

O.Shirnedev

11

CHANDMANI BAYAN

95253102

313656

B.Batsaikhan

12

CCP

331754

-

S. Gantulga

13

DARKHAN BROKER

328970

-

Sh.Dorjsuren

14

DELGERKHANGAI SEC.

95252453

313235

M.Batorgil

15

ERDENEST

99356857

313301

A.Aruinsain

16

FRONTIER

70119999

99007069

Masateru Igata

17

GENDEX

636335

323807

B.Bathuyag

18

GLOBAL ASSET

320889

-

Li Keong Guu

19

KHANSH INVEST

684596

321021

TS.Altanchimeg

khansh_invest2004@ yahoo.com

20

MASDAQ

99881008

313327

V.Battulga

[email protected]

21

MERGENSANAA

451626

311020

M.Tumurtugoo

22

MONGOL SEC.

95252719

314518

Z.Nomundari

[email protected]

23

MONSEC

91918840

313526

M.Otgonbaatar

monsecl182004@yahoo. com

24

MUNKHUD

95256869

310547

G.Batmunkh

25

NIKI

324790

310510

U.Tuvshinjargal

26

SANAR

99098709

313634

B.Enkhbayar

[email protected]

27

TAVAN BOGD

351210

313291

K.Aliya

[email protected]

28

UNDURKHAAN INVEST

682861

313311

N.Oyuntungalag

29

ZERGED

367609

313346

Sh.Erdene

30

WORLD KEY

330594

313676

Ganzorig

343477

321763

632959

462130

330594

[email protected]

[email protected]

[email protected]

[email protected]

OTHER ACTIVITIES OF MSE    

Information center Training center Sports competition Publications

mongolian stock exchange

INFoRMatIoN CENtER In 30th March of 2005 MSE has established Information center in order to disseminate market information to the public in a transparent reliable, urgent manner and to assist individual investors on getting basic knowledge on stock market terms. The main activities of the Information center are: organizing press conferences, interviews, meetings, seminars, publishing monthly journals, brochures, handbooks and giving information, assisting public on capital market basics. The information center and press conference room located at the second floor of MSE office.

tRaINING CENtER MSE’s training center was established on October 30th of 2005. Training center operates with purpose of enhancing capital market professional participant’s knowledge expertise, giving basic education on capital market operations to the general public and strengthening upgrading MSE’s employees specialist’s knowledge education professional ability. The main activities of Training center is to organizing seminars, workshops, academic conferences discussions, publishing educational publications, disseminating information to the public and to co-operate with local and regional institutes. Since it is establishment the Mongolian Stock Exchanges Training center have conducted 18 basic knowledge courses to general public and 3 advanced training courses for the professional participants issued total of 492 certificates to the participants of training course and seminars.

SPoRtS CoMPEtItIoN Each year MSE organizes sport competition among member companies and securities market participant organizations. Staffs of Financial Regulatory Commission, Securities Central Depository Clearing House Settlement, Broker dealer companies and MSE compete with each other in basketball, volleyball, table tennis, snooker billiard and chess. The winner rewarded with the descending trophy that travels among above securities market organizations.

PUBLICatIoNS Following periodicals are published by MSE to promote the securities market and educate investors.  Fact book (Annually, in English) Introduction about MSE and important market information and statistics for MSE and the market  “Capital market” journal (monthly in Mongolian) Comprehensive monthly market statistics, securities market –related articles and last events at MSE  Brochures (annually, four kinds of brochures in Mongolian) Detailed information and advices for share and bond issuers, investors and buyers of share and bonds  Newspaper, dedicated to the Anniversary of MSE (annually in Mongolian) News, reports, articles, mission statement, and advertisements related to the activities of MSE PUBLIC HoLIDaYS IN MoNGoLIa      

38

New Year’s Day Lunar Holiday International Woman’s Day Children’s day Naadam National Festival Independent Day

January 1 February 17-19 March 08 June 01 July 11-13 November 26

mongolian stock exchange

StoCk PRICE tRENDS 2000

2000

2001

2002

2003

1 2 3 4 5 6 7 8 9 10 11 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11

285.88 327.40 336.77 340.87 336.92 338.13 364.54 418.76 448.85 468.05 506.31 521.58 526.15 578.33 587.03 631.05 691.75 687.52 764.13 779.67 916.81 958.91 962.97 962.97 946.51 1125.64 1307.45 1362.88 1296.42 1237.10 1330.13 1348.33 1450.39 1257.90 1128.02 1045.45 952.89 990.57 894.92 887.63 846.21 841.51 907.25 851.49 723.56 755.43

260.42 288.96 289.79 306.37 313.78 315.43 331.02 358.13 409.45 425.12 459.64 479.84 492.30 513.04 541.75 555.85 579.92 592.97 646.11 673.44 684.65 783.80 757.82 757.82 809.14 877.65 958.13 975.62 1131.24 948.40 968.15 1062.21 1163.14 983.76 803.68 824.50 755.43 675.15 757.96 723.08 727.82 743.94 617.67 577.60 541.84 568.84

274.58 309.11 317.91 330.55 326.26 329.88 339.49 390.78 425.91 446.97 488.96 514.17 526.15 578.33 585.20 596.36 691.75 656.31 764.13 682.05 789.86 850.83 814.02 814.02 946.51 1096.75 1142.42 1257.84 1143.80 1119.86 1165.38 1244.53 1167.08 1105.04 933.93 824.74 853.95 870.88 783.77 783.20 834.73 750.20 907.25 596.31 589.64 732.08

285.88 327.40 335.51 306.37 324.46 330.01 364.54 396.88 435.68 460.49 469.93 497.09 506.20 538.86 565.25 590.20 605.54 634.62 682.41 712.77 773.65 853.87 845.28 845.28 876.50 1040.86 1127.01 1183.43 1226.41 1112.20 1183.47 1154.05 1296.76 1149.08 1025.82 919.37 887.22 839.61 816.43 770.11 800.38 776.03 703.18 737.93 604.23 665.07

39

mongolian stock exchange

2004

2005

2006

2007

40

12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12

910.79 886.06 816.72 910.7 795.37 699.61 712.42 691.87 746.5 770.08 837.37 858.72 682.13 791.47 675.4 888.07 859.69 964.22 936.73 852.93 924.91 849.28 1043.83 1048.23 1053.01 1081.03 1144.12 1105.37 1117.77 1197.56 1185.39 1171.63 1199.58 1411.29 1665.98 1811.26 2030.81 2152.55 2431.10 3025.00 3043.50 3336.29 4441.78 8131.94 12712.45 13676.95 11692.68 10625.45 10568.33

587.88 754.55 682.95 711.33 567.51 507.00 491.62 499.66 611.66 606.42 477.6 485.44 506.54 502.15 554.59 636.91 600.91 672.57 692.57 658.95 696.65 760.79 843.67 947.72 955.92 988.04 1019.71 1054.47 1082.45 1099.63 1166.34 1164.41 1169.36 1272.00 1419.31 1687.30 1755.03 2031.88 2146.65 2467.24 2911.32 2782.87 3340.29 4300.74 8213.07 11731.70 10657.09 9640.15 9441.35

895.90 837.33 682.95 802.25 610.01 604.38 492.1 629.54 619.26 619.99 757.1 666.16 585.69 601.06 675.4 865.09 777.79 815.04 692.57 680.34 770.33 836.8 852.44 970.59 1019.20 1,006.69 1,103.37 1,095.39 1,108.11 1,184.37 1,168.75 1,169.36 1,199.58 1,410.73 1,665.98 1,809.07 2,030.81 2,152.55 2,431.10 3,019.26 2,911.32 3,336.29 4,408.17 8,122.64 12,712.45 11,814.43 10,657.09 9,640.15 10,256.13

740.69 849.85 726.59 774.93 652.15 641.87 609.24 594.15 669.68 707.36 571.41 623.03 590.68 631.14 593.96 705.96 738.15 771.69 802.33 712.86 777.46 813.63 963.35 1003.21 995.29 1020.14 1077.00 1085.91 1093.26 1147.85 1176.57 1169.23 1178.06 1351.02 1514.27 1772.37 1867.99 2101.10 2253.51 2770.65 2970.65 3017.17 4026.96 6633.82 10490.24 12461.66 11214.89 10160.72 10014.03