You are here:
- Asian Investment Conference 2012
- >AIC Reporter
- >2010
- >Day 4: March 25
- >Mongolia Panel
Mongolia a New Frontier for Investors
Mongolia is the latest frontier market and is actively seeking private equity investment to improve the country’s infrastructure, the 13th annual Credit Suisse Asian Investment Conference heard today.
Addressing a panel entitled ‘Mongolia, the latest frontier market’, three panelists offered positive outlooks for the rapid growth of the Mongolian economy and highlighted significant opportunities for foreign private equity investment.
“The story of Mongolia is positive, and it is the story of minerals,” said Naidansuren Zoljargal, Deputy Governor of the Bank of Mongolia, Mongolia’s central bank.
Stressing that Mongolia was a country with vast natural resources and a well educated population, Mr. Zoljargal said there was a need to uphold sustainable growth, to manage wealth and to keep the currency stable. He also noted that in order to attract investment it was vital to continue to build infrastructure and to ensure banks are well regulated.
Mongolia is a US$5 billion economy with 8% average annual Gross Domestic Product growth. As one of the fastest growing markets in the world, its key economic driver is natural resources.
“Mongolia is the alpha on China’s beta,” said John Finigan, CEO of Golomt Bank, the second largest bank in terms of market capitalization in Mongolia. In Mongolia, three banks account for 61% of the market, and 70% of exports go to China.
However, they agreed that continued infrastructure investment was vital to continue this economic strength, and that Mongolia needs up to US$30 billion dollars of investment to develop its natural resources. In order to attract such investment, Mr. Finigan stressed the need for good bank regulations and a free floating currency.
Ulambayar Bayamsam, CEO of the conglomerate Altai Holding LLC said Mongolia was seeking private equity investment, and noted that companies needed access to capital as well as know-how for large-scale infrastructure projects.
Both Mr. Zoljargal and Mr. Finigan stressed that one of the incentives for foreign investment was a low tax-rate. Mongolia plans to issue its first sovereign bond at the end of this year or early next year, in order to raise funds for infrastructure development.
Secondary Content
Day 4: Photo Album
