mongolia new foreign investment laws

This should give wolf the right type of investment environment.I'm looking forward to a JV then drilling.GL Holders.




By Reuters.

Mongolia looks for second chance with foreign investors

December 30, 2013 RECORDER REPORT 0 Comments
Saruul Ganbaatar, the deputy head of Mongolia's stock exchange, hopes the country's days of interventionist economic policies are over and new laws ensuring foreign investors' access to the frontier market's industries will bring back sorely needed cash.

In mid-2012, Mongolia rushed into law restrictions on foreign ownership of strategic sectors such as mining, telecommunications and banking. The government hastily created the legislation to block Chinese state-owned Aluminum Corp of China (Chalco) from gaining a controlling stake in Mongolia-focused coal miner SouthGobi Resources.

The deal subsequently fell apart, but as a consequence Ganbaatar said in a recent interview with Reuters, Mongolia suffered a 52 percent year-on-year drop in foreign direct investment.

"It made a lot of politicians and businesses understand that when government did this in a hurry they made a lot of mistakes. And they also understand that they have to correct those mistakes," Ganbaatar said in a recent interview with Reuters.

Ganbaatar, 32, who cut his investment teeth in Chicago's financial houses after graduating from Loyola University, is careful not to over-promise on what the stock market can deliver in 2014 and beyond, in terms of new listings or overall growth.

In October a law was passed easing ownership restrictions for private companies to invest in the strategic industries. A securities markets law coming into effect January 1, 2014 is expected to provide the key ingredient to attract deep pocketed institutional investors such as mutual funds to invest. Investors seeking to profit from the opening up of Mongolia's economy, especially its vast untapped natural resources, sent the Mongolian Top-20 stock index up nearly 140 percent in 2010 with a further 47 percent gain the next year.

Mining sector strength made Mongolia the fastest growing economy in the world in 2011 with GDP rising 17.5 percent, according to International Monetary Fund data.

The restrictions, now largely rescinded, stymied Mongolia's accumulation of FDI but also sent its fledgling stock market down.

The stock index fell 19 percent in 2012 and year-to-date is down 11.5 percent, although it did start to climb with the newly passed laws. The foreign ownership law took effect November 1. Despite the market downturn, the IMF predicts Mongolia's economy will grow 11.8 percent in 2013, second only to resource-rich Turkmenistan's 12.2 percent forecast. In 2014, Mongolia's 11.7 percent GDP growth forecast is the best in the world. Global growth overall is projected at 3.6 percent in 2014.

Copyright Reuters, 2013