BUSINESS COUNCIL of MONGOLIA NewsWire

www.bcmmongolia.org Email: Jim@bcmmongolia.org November 16 2007

NEWS HIGHLIGHTS: Business: Mining investors forum grows; Quality control for imported goods; Vacuum window factory

opens; Gulf airline sets sights on Mongolia; Investors check regional free trade zone

Economy: MSE Executive director receives Citigroup reps; China and Mongolia connected by first bus route; Government plans to reduce consumer goods tariff; European Union releases important report for investors

Politics: Government faces dual tragedy; Government in caretaker mode; Mongolian initiative at UN raises profiles of women

MSE Review November 9, 2007

BUSINESS

MINING INVESTORS FORUM GROWS Organizers of the Fifth International Forum of Mining Investors, ‘Discover Mongolia-2007,’ told media at a press conference last week the forum’s goals are achieved in principle. Mongolia’s mining sector is addressing its objective to keep opportunities available to investors to continue to attract foreign investors. Numbers at the 2007 Forum included 900 representatives of 150 companies and organizations from 19 countries. Last year the numbers were 660 participants from of 170 countries.

Source: Montsame National Newsagency

QUALITY CONTROL FOR IMPORTED GOODS A cooperation memorandum has been signed between the National Center for Standardization and Measurement and the worlds leading inspection, verification, testing and certification company, SGS Group. It will improve Mongolia’s foreign trade environment and quality control over imported goods. Mongolia imports over 80 percent of its consumer goods and about 60 percent of food products from over 90 countries.

Source: Montsame National Newsagency

VACUUM WINDOW FACTORY OPENS A factory producing vacuum windows has started operations in Dalanzadgad, Omnogobi Aimag in the Government’s scope to create new jobs. The ‘Omnogobi Small Business Foundation,’ has granted a MNT 10 million loan to the factory to meet the aimag’s demand for vacuum windows in the new construction scope.

Source: Montsame National Newsagency GULF AIRLINE SETS SIGHTS ON MONGOLIA Officials in Dubai said on November 8 they would seek permission to offer flights from the United Arab Emirates to Mongolia. Government officials said Mongolia would soon be approached about establishing the first-ever air route between the two countries. Minister of Governmental Sector Development, Sultan Bin Saeed Al Mansouri, told GulfNews, "We almost cover the whole world, and are only left with certain countries including Mongolia and Myanmar.”

Read more: http://www.gulfnews.com/business

INVESTORS CHECK REGIONAL FREE TRADE ZONE Altanbulag free trade zone governor hosted a forum for investors November 10, to look at activities and trends for the establishment of the free trade zone. Ideas from the forum will be presented to Government and central state institutes. Discussions were held on the establishment of a council of investors in accordance with the law on free zone. The Presidential Office, Government, National Security Council, Ministry of Industry and Trade, and Ministry of Finance representatives attended with more than 10 investors.

Source: Montsame National News

ECONOMY

MSE EXECUTIVE DIRECTOR RECEIVES CITIGROUP REPS Mongolian Stock Exchange executive director, R. Odkhuu met with Citigroup stock and investments fund director, Mr Siu Chan Wan and foreign investigation and international cooperation department vice-director, Mr Bin Jin to investigate drawing Citigroup’s capital from the capital market in various countries and other financial services. Discussions were held on issues including double-registration of Mongolia’s large joint stock companies on the Hong-Kong stock exchange and selling stocks, with possibilities for registration of Hong-Kong s companies on the MSE.

Read more: http://www.montsame.mn/newsdetail.php?nid=126297

CHINA AND MONGOLIA CONNECTED BY FIRST BUS ROUTE

The first international passenger bus service between China and Mongolia began operations November 1. The route takes the bus about 168 kilometers between Altay, China and Bulgan, Mongolia, with only one scheduled service simultaneously from each direction at 12:00hrs (Beijing Time) each day.

Read more: http://www.mongolia-web.com

GOVERNMENT’S PLANS TO REDUCE CONSUMER GOODS TARIFFS

Government has received a proposal to reduce ongoing price fluctuations from a joint working group set up by Government and the Federation of Mongolian Trade Unions to address oil and fuel, meat and flour and public transport tariffs. Working group member, Kh. Amgalanbaatar said a plan was to hold flour prices at MNT 500 per kilogram, and to make this possible wheat import should be free from customs duties for a definite period of time. MNT 5.5 billion was required to keep public transport tariffs stable and MNT 12.5 billion next year. It was also critical to free fuel imports from customs duties for a set period of time.

Source: Daily news

EUROPEAN UNION RELEASES IMPORTANT REPORT FOR INVESTORS

An invaluable planning tool for investors in Mongolia has just been released. The European Union analysis, ‘Country Report Mongolia - November 2007’ was released November 11, 2007. It provides a 225-page comprehensive cover of politics; economic policy; the domestic economy; foreign trade and payments; economic structure indicators. It also contains ‘Outlooks for 2008 to 09’ in domestic politics; international relations; policy trends; economic growth and the external sector.

Read more: http://www.alacrastore.com

POLITICS GOVERNMENT FACES DUAL TRAGEDY

A minister, a ministerial state secretary and their staff were involved in two unrelated car accidents November 12, with tragic results.

The Minister of Construction and Urban Development (and prime Minister for eight months in the late 1990's), and his driver died in one accident and Onoodrin newspaper editor, died in the other.

Fifty-year old Minister of Construction and Urban Development, Janlaviin Narantsatsralt died the night of November 12 night in Tov province, central Mongolia, while returning from a Youth Forum in Dundgobi aimag. He is survived by a family of four. His driver was also killed.

In the second accident on the same day, Ministry of Fuel and Energy state secretary, T. Tserenpurev received chest injuries from a car crash and Onoodrin editor-in-chief, S. Tsembeldorj died. Two others were hospitalized with chest and spinal injures. Government held a plenary meeting of the Parliamentary session November 14 with a minute’s silence in commemoration of Dr Narantsatsralt.

Source: The Mongol Messenger

GOVERNMENT IN CARETAKER MODE

Mongolia's government is in caretaker mode following the resignation on November 9 of Prime Minister, Miyegombo Enkhbold and the subsequent resignation of Cabinet. It is the second government resignation since the country's parliamentary elections in 2004, when a coalition government was created between the Mongolian People's Revolutionary Party (MPRP) and the second-largest Democratic Party. Prime Minister Enkhbold’s promises that his government would focus on speeding up Mongolia’s economic development came under fire from new emerging party peers, who demanded more intra-party democracy and the establishment of a new leadership system in the MPRP. He was defeated in an election for party chairman by Sanjayar Bayar at the 25th Party Congress and submitted his resignation to parliament November 13 after the MPRP's congress said the party's chairman should serve as the prime minister. The MPRP holds 39 seats in the 76-seat parliament. Bayar is widely seen as the most likely prime ministerial candidate and said he had talked with Mongolian President, Nambaryn Enkhbayar and would negotiate with the parties in parliament to form a new government as soon as possible.

Read more: English People’s Daily online http://english.people.com.cn

MONGOLIAN INITIATIVE AT UN RAISES PROFILE OF WOMEN

Mongolia has introduced an initiative at the United Nations to have every October 15 recognized, ‘International Day of Rural Women.’ The initiative \was approved in committee and sent for consideration to the General Assembly. The United Nations released a statement, “The representative of Mongolia, the main sponsor of the resolution, pointed out that the text would highlight the vital role played by international organizations in the improvement of the situation of rural women, particularly in promoting education for all. Particular attention would also be attached to improving the economic and social conditions of older rural women, and would highlight the importance of decent work for all, among other initiatives.”

Read more: www.agriteam.ca;

MONGOLIA STOCK EXCHANGE WEEKLY REVIEW

For the week ended November 9, 2007, there were trades on the Mongolian Stock Exchange involving 79 companies, 268.6 million shares with total transaction value of MNT 237.3 billion. The ‘Top 20’ index decreased by 17.49 points or 0.2 percent compared to last week, closing at 10324. The prior week ended November 2 saw the ‘Top 20’ index decrease a whopping 457 points or 4.2 percent. Mongolian Telecom, Spirt Bal Buram, Gobi, Makhimpex, Mongol Savkhi share prices were down. The most actively traded shares were Genco Tour Bureau (88,500 shares), Olloo Company (60,300 shares), UID Company (34,500 shares), NIC Company (18,800 shares), Bayantolgoi Company (16,000 shares). Total market capitalization of 359 companies listed on the Mongolian Stock Exchange is currently MNT 677.2 billion, which was MNT 8.5 billion lower than last week.

ECONOMIC INDICATORS

CURRENCY RATES – November 15 2007 Currency name Currency Rate US dollar USD 1173.49 Euro EUR 1719.51 Japanese yen JPY 10.58 British pound GBP 2438.39 Hong kong dollar HKD 150.68 Chinese yuan CNY 157.76 South Korean won KRW 1.28 North Korean won KPW 8.20 Canadian dollar CAD 1226.99

Australian dollar AUD 1061.77 Taiwan dollar TWD 36.35 Indonesian rupiah IDR 0.13 Malaysian ringgit MYR 350.98 Singapore dollar SGD 812.55

INFLATION

November 15 2007

October 0.9

YTD 13.2

12 months 14.2