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Mongolian Stock Exchange -2007 english

Mongolian Stock Exchange -2007 english

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Mongolian Stock Exchange annual report 2007
Mongolian Stock Exchange annual report 2007

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FaCt Book

2007

mongolian stock exchange

taBLE oF CoNtENtS MESSaGE FRoM tHE CEo 2007 ECoNoMICaL REVIEW MSE INtRoDUCtIoN  Mission statement  History  Company structure  Organizational chart  MSE Highlights FINaNCIaL StatEMENt  Balance sheet  Income statement HIStoRICaL tIMELINE LIStING at MSE  Listing procedures  Listing criteria  Listing fee  Listed companies tRaDING  Trading process and mechanism  Market highlights  Stock trading  30 Active Traded Stocks  Bond trading  Clearing and Settlement MSE INDEXES  Top-20 indexes, 2006-2007 MEMBER CoMPaNIES
     

5 6 10 10 10 11 13 14 15 16 18 18 19 20 24 25 26 26 27 28 30
34 34 34 34 34 36

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

MSE`S otHER aCtIVItES
   

Information center Training center Sports competition Publications

38 38 38 38

StoCk PRICE tRENDS

39

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mongolian stock exchange

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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

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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 1. Annual growth of GDP (%)* 2. Inflation rate -3,0 183,0 ‘94 2,3 66,3 ‘95 6,3 53,1 ‘96 2,4 44,6 ‘97 4,0 20,5 ‘98 3,5 6,0 ‘99 3,2 10,0 ‘00 1,1 8,1 ‘01 1,0 8,0 ‘02 4,0 1,6 ‘03 5,5 4,7 ‘04 10,6 11,0 ‘05 6,2 9,5 ‘06 7,4 6,0 ‘07 9,9 15,1

GDP growth rate 12.0 10.0 8.0 6.0 4.0 2.0 0.0 -2.0 -4.0 ‘93 3. Foreign trading 382,6 ‘94 356,1 ‘95 473,3 ‘96 424,3 ‘97 568,5 ‘98 462,3 ‘99 454,2
‘93 ‘94 ‘95 ‘96 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07

Inflation rate
200.0 180.0 160.0 140.0 120.0 100.0 80.0 60.0 40.0 20.0 0.0

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

‘00 535,8

‘01 521,5

‘02 524,0

‘03 600,2

‘04 1011,6 853,3

‘05 1184,3 1064,9

‘06 1 485,6 1 542,8 1237,0 1360,4

‘07 2 117,3 1 889,0 1749,2 1851,2

Export (USD in mln.) Import (USD in mln.)

379,0

258,4

415,3

450,9

468,3

503,3

512,8

614,5

637,7

690,8 548,6 477,0

* 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
4. State budget 143,9 140,9 176,6 160,0 287,6 212,0 342,2 225,5 361,7 254,8 429,7 351,1 489,7 439,3 616,5 535,8 713,8 697,4 Revenue**(MNT in bln.) Expenditure***(MNT in bln.) 764,5 837,8 54,8 85,5

61,6

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

98,9

787,3

7

mongolian stock exchange

Foreign trading
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 0

State budget

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

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

‘95 473,6 5. Exchange rate MNT / US $ 6. Currency issued in circulation (MNT in bln.) Ì1 Money (MNT in bln.) Ì2 Money (MNT in bln.)

‘96 693,5

‘97 813,2

‘98 902,0

‘99 220,2 114,8 91,6 1 072,4

‘00 258,8 130,8 107 1 097,0

‘01 331,1 156,2 119 1 102,0

‘02 188 134,6 1 125,0

‘03 213 152,8 1 168,0

‘04 213 168,5 1 209

‘05 269 191,7 1 221,0

‘06 332 245,0 1 165,0 1537

‘07 2191,9 515,4 364,1 1 170,0

102,0 42,6 29,8

128,4 64,3 46,1

170,1 76,1 56,8

167,2 82,6 61,8

470,1

703,3

847,0

Source: monthly bulletin, yearbook of the National Statistical Office

8

1170

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.

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mongolian stock exchange

oRGaNIZatIoNaL CHaRt
Shareholders Assembly (State property committee)

MSE Directors

Board of Directors

Auditor

Chief executive officer

Senior Vice Director

Head of Administrative Division

Vice Director

Surveillance and Monitoring Department

Information and public relation department

Information and Technology Department

Financial department

Internal Services unit

Trade and Research Department

Listing Department

Administrative Unit

Security unit

Internet center Workers canteen and housekeeping Farming and husbandry

Training center

Information center

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

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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
   

       

      

 

    

   

Utilities supply Farming Workers canteen Housekeeping

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mongolian stock exchange

MoNGoLIaN StoCk EXCHaNGE HIGHLIGHtS 1999-2007
1999 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 Value (MNT in mln.) Volume (in thousands) 6. Bond trading value (MNT in bln.) Government Corporate 7. ÒÎÐ-20 index: High Low Average Close 8. Number of transaction (in thousands) 9. Number of accounts in CD* (in thousands) 10. Member broker dealers company 11. Member investment funds 12. Exchange rate US$ / MNT** 13. Inflation rate*** 274,2 192,1 230,3 255,7 60,8 270,2 41 16 1 072 10,0 506,3 260,4 359,3 469,9 29,5 277,2 42 17 1 097 8,1 963,0 479,8 650,8 814,0 14,7 273,3 42 16 1 102 11,2 1 450,4 803,7 1 120,6 933,9 14,8 277,3 34 2 1 125 1,6 1 045,5 541,8 740,7 895,9 13,5 281,2 26 1 168 4,7 910,7 477,6 667,4 585,7 13,0 287,8 25 1 209 11,0 1053,0 502,2 796,9 1019,2 9,1 292,7 24 1221 9,5 2 030,81 988,04 1 291,91 2 030,81 11,6 309,1 25 1165 6,0 13 676,95 2 031,88 6 699,87 10 618,78 28,9 74,9 30 1169,97 15,1 11132,1 30750,2 1 204,3 41690,7 2 958,0 21722,5 2 988,3 12463,8 2 776,5 6.767.7 2.663.7 4 461,5 960,9 39 599,3 850,7 13,0 85,1 11,7 138,9 6,8 62,3 5,4 38,6 3,6 32,3 2,6 35,6 10,1 102,6 49,8 294,6 245,6 458,9 3 274,2 3,1 21,4 2 973,3 2,7 35,4 1 723,3 1,6 15,9 1 373,0 1,2 9,8 895,9 0,8 8,1 654,0 0,5 9,1 2.547.3 2,1 25,9 12 604,3 10,8 74,5 62 126,8 53,1 116,3 4 428,0 32,1 40482,8 36,9 41283,3 37,5 35847,6 31,9 49513,4 42,4 29832,1 24,7 55.701.0 45,6 131179,1 112,6 716 272,3 612,2 418 2000 410 2001 400 2002 403 2003 402 2004 395 2005 392 2006 387 2007 384

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

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mongolian stock exchange

FINaNCIaL StatEMENt BALANCE SHEET
Assets Cash Accounts receivable Inventories Current assets Total current assets Fixed assets Accumulated depreciation Total non-current assets Total assets Liabilities Accounts payable share dividend bond Other accounts payable Total current liabilities Total liabilities Shareholders’ equity Equity: State Special fund Retained earnings: for accounting period for previous period Revaluation of fixed assets Total equity Total liabilities and equity 511,759,371 56,083,976 21,669,908 34,414,068 (7,423,302) 41,837,370 -116,249,770 158,001,333 85,806 158,001,333 58,851,664 99,149,570 1,867,708,800 7,862,828 1,791,969,748 7,554,728 1,784,969,748 7,484,628 1,873,832,870 7,359,368 1,866,899,108 7,398,678 2,265,886,585 7,282,199 12,688,100 12,688,100 12,688,100 12,688,100 12,688,100 12,688,100 12,700,581 12,700,581 12,700,581 14,651,072 14,651,072 14,651,072 14,752,356 14,752,356 14,752,356 836,872,929 323,540,486 1,032,545 222,464,631 1,383,910,590 1,383,910,590 2007 463,514,965 29,777,518 48,368,083 174,030,331 715,690,898 1,987,666,892 (245,204,715) 1,742,462,177 2006 113,442,072 37,582,857 45,484,232 36,963,255 233,472,417 1,932,777,592 -295,903,457 1,636,874,135 2005 125,884,918 42,774,229 40,885,678 70,000 209,614,833 1,933,616,517 (301,612,325) 1,632,004,191 2004 64,918,163 128,721,495 41,544,557 689,147 235,873,362 1,992,706,900 -288,849,584 1,703,857,316 2003 23,165,792 243,116,718 40,678,618 416,764 307,377,891 2,032,304,087 -285,610,935 1,746,693,152

(in MNT)
2002 129,272,475 1,403,676,701 48,237,621 656,548 1,581,843,345 2,514,718,506 -281,481,243 2,233,237,262

2,458,153,075

1,870,346,551

1,841,619,024

1,939,730,678

2,054,071,043

3,815,080,607

2,050,000 2,445,464,975

2,050,000 1,857,658,451

2,050,000 1,828,918,443

2,050,000 1,925,079,606

6,933,762 2,039,318,687 2,431,170,118

2,458,153,075

1,870,346,551

1,841,619,024

1,939,730,678

2,054,071,043

3,815,080,707

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mongolian stock exchange

INCOME STATEMENT
Revenues Securities transaction commission of: securities trading off-exchange trading Fees listing, member companies, research Other Total revenues Expenses Salary, social insurance, incentives Utilization expenses (electricity, gas, water) Business trip, Board of Governors Transportation, fuel, repairs Raw materials Depreciation Advertising and promotion, training Printing-and postage Others Total expenses Non-operating revenue Exchange rate changes, others Non-operating expenses Exchange rate changes, others Operating profit / loss Extra- ordinary income Extra-ordinary expenses Profit before provision for Tax Income tax expenses Net profit / loss for accounting period 511 759 371 21 669 908 (7 423 302) -116 249 770 85 806 511 759 371 21 669 908 (7 423 302) -116 249 770 85 806 12 933 100 511 759 371 5 617 734 21 669 908 6 117 196 (7 423 302) 27 965 570 -116 249 770 8 455 526 85 806 128 851 92 306 224 364 119 174 964 10 742 460 72 966 070 26 243 647 8 224 359 67 438 108 9 580 470 13 721 515 25 938 414 354 030 009 86 101 307 7 045 833 27 970 482 21 354 773 10 934 568 22 906 278 13 902 022 12 001 692 48 975 364 251 192 318 70 012 268 7 769 574 16 572 160 13 811 067 7 624 585 12 762 742 6 567 778 11 203 937 26 889 794 173 213 904 72 569 598 7 581 641 16 871 583 8 878 800 2 886 955 57 673 353 2 649 299 6 607 967 10 132 420 185 851 616 81 179 186 9 751 429 23 705 226 29 737 916 3 398 417 45 620 617 5 733 854 17 514 023 70 691 779 287 332 447 144 965 270 54 329 783 878 722 480 61 400 380 278 479 960 54 081 147 70 261 777 171 778 947 55 343 538 11 633 297 97 475 110 50 699 813 98 537 952 295 649 415 679 427 427 217 079 580 47 436 023 30 498 275 146 411 650 2007 2006 2005 2004 2003

(in MNT)
2002

222 914 148

59 473 337 11 365 739 293 753 225

73 408 874 9 187 507 20 692 486 9 442 250 3 728 972 51 519 607 6 180 086 11 773 027 6 702 719 192 635 527

36 968

42 303 002 58 851 664

58 851 664

58 851 664

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mongolian stock exchange

MSE HIStoRICaL tIMELINE 1991 1992 1994 1995 January May February September November July July august october February october 18 22 07 26 14 01 31 28 25 11 01 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

1996 1998 1999

august 25 September 10 November 01 January September November January June December March March 21 26 16 18 08 03 26 26

2000

2001 2002 2003

2004 2005 2006

November 06 october 29 March 30 November 01 January June July 18 15 19 4 1 6 21

2007

January august august august

December 05 16

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 General criteria Above 10 mln MNT Not less than 10% At least 50 Not less than 30% At least 1 year Must show some income. If the company is in loss, loss amount should be not higher than 30% of its total asset. Specific criteria Above MNT 10 mln Not less than 20% At least 50 Not less than 10% At least 3 years No criteria

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mongolian stock exchange

Listing criteria for Bonds

Criteria Shareholders equity Real estate assets size of the whole capital Listing securities volume and value Duration of corporate existence Guaranty

General criteria Above MNT 10 mln Not less than 20% From 50 thousand shares MNT 500 mln and above At least 3 years permanent operation and well ran during last year Security, guaranty is required. In some cases, guaranty is not required.

Specific criteria Above MNT 10 mln Not less than 30% From 100 thousand shares MNT 1 bln and above At least 5 years permanent operation 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 10 000 000 – 500 000 000 500 000 001 – 5 000 000 000 5 000 000 001 and above Joint Stock Company - 100% state owned companies annual fee 100 000 000 100 000 001 – 500 000 000
500 000 001 and above Joint Stock Company – 100% state owned companies

Fees (proportional fees) 500 000 750 000 + 0.02% for up 500 000 000 1 700 000 + 0.01% for up 5 000 000 000 500 000 Fees (proportional fees) 0.4% 400 000 + 0.001% for up 100 000 000
800 000 + 0.00001% for up 500 000 000 400 000

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 Government and General obligation bond Company bond

Fees (proportional fee) 0.05% of total traded value 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 Listed companies Newly listed Delisted Listed &Delisted shares (in thousand) Newly listed shares Additional listed shares Delisted shares Shareholder’s meeting Pay dividend 1 436,8 1 077,8 3 170,0 176 17 1 436,8 1 612,3 152 22 385 901,8 406,0 3 313,5 148 16 569 865,7 14 366,9 119 20 791 861,7 7 573,9 117 12 147 266,1 577 120,0 711 977,0 136 17 120 000,0 9,6 11 210,9 138 23 156 128,7 10000,00 1 091,8 153 28 411 5 12 2001 401 10 2002 403 8 6 2003 402 12 13 2004 395 4 11 2005 392 3 7 2006 387 3 8 2007 384 5 8

Listed companies in 2007
Outstanding shares 74 922 120 000 000 5 000 000 21 353 312 9 700 497 Par value of shares ( MNT) 100 1 000 100 1 000 100

Company Dîrnod auto zam Tuul Songino usnii nuuts High-B-Oil Darkhanii tumurlugiin uildver Olloo

Date of listing 2007.02.10 2007.04.13 2007.05.02 2007.08.02 2007.09.12

Shareholders State owned company Joint stock company Joint stock company State owned company Joint stock company

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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%

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mongolian stock exchange

CoMPaNIES aND SECURItEIS LIStED at MSE 2006-2007 (As of December 31st 2007) 2006 Total number of listed companies Type: State owned Private Total volume of listed securities (quantity) Ownership type: State Private investors 387 59 328 2,270,794,712 1,866,939,156 403,855,556 3 Companies that issued new securities Type: - State owned Volume of issued securities - IPO Volume of issued securities 3 120,000,000 Companies that issued securities of addional securities Number of delisted companies Number of shares Tender offer Companies that delivered shareholders meeting minutes to MSE addional Volume 1 9,617 8 11,210,905 8 3 2007 384 56 328 2,491,116,030 1,855,073,030 636,043,697 5 1 21,353,312 4 134 775 419 1 10 000 000 8 1,091,828 8 6 Change -6 -3 0 +220,321,318 - 11,866,126 +232,188,141 +2 +1 +21,353,312 +1 +14 775 419 0 +9 990 383 0 -10,119,077 0 +3

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 BRokER

Buy order

Buy order

Sell order

Sell order

Investor

Mongolian Stock Exchange Buy order 498 499 500 501 502

Investor

Price prioriy

Sell order

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 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

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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

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mongolian stock exchange

Trading volume (mln shares)
2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 0.0 116.1 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

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
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 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Name of stocks Jenco tour bureau Mongol emimpex Berkh uul Tuul songino usnii nuuts Moninjbar Olloo High-B-Oil Shariin gol Zoos bank Baganuur Gobi Shivee ovoo UID Mongol shiltgeen Auto impex NIKI UB buk Makhimpex Volume (tous.shares) 25,181,500 17,604,600 16,219,988 13,701,056 12,195,006 8,774,614 4,299,052 2,794,276 2,209,815 1,411,570 1,337,821 1,149,302 1,144,771 1,113,275 955,816 911,204 618,392 603,056 Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Name of stocks Tuul songino usnii nuuts Shariin gol Gobi Baganuur Zoos bank Shivee ovoo Jenco tour bureau Berkh uul NIKI Moninjbar Olloo Mongol shiltgeen Mongol emimpex Tavan tolgoi Makhimpex High-B Oil Mon.Tsakh. Kholboo Bayangol hotel Value (MNT. mln) 13,701,418,260 8,015,049,461 7,200,927,584 5,627,677,045 4,568,838,651 3,463,453,620 3,127,936,103 2,011,761,280 1,709,892,586 1,581,731,848 1,332,634,284 1,285,771,948 1,197,112,800 958,423,785 849,388,766 514,145,005 478,741,455 465,940,797

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mongolian stock exchange

19 20 21 22 23 24 25 26 27 28 29 30

ZGMS Dornod Material impex Tegsh Mongol savkhi BDSec Sonsgolon barmat Torgon ur Mon.Tsakh. Kholboo Kherlen khivs Dornod autozam Darkhan makhexpo Percentage in all stocks Total

320,500 270,725 215,908 168,497 166,630 145,581 143,380 138,722 104,335 103,800 97,249 84,320 98.37 114,184,761

19 20 21 22 23 24 25 26 27 28 29 30

UB buk UID Tumriin zavod Material impex BDSec Auto impex Darkhan makh-expo Dornod autozam Tegsh Spirt bal buram Khash ord UB hotel

459,691,366 417,586,307 401,193,000 325,027,960 291,158,770 260,574,243 210,593,084 189,830,048 164,734,087 150,946,337 108,299,080 84,588,808 98.44 61,155,068,368

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
Year 1996 2000 2001 2002 2003 2004 2005 2006 2007 Total issued 114,3 11 132,1 30 647,9 41 690,7 21 722,5 12 463,8 6 767,7 4 461,5 39 599,3 9 810,7 30 452,1 41 115,8 21 625,7 12 463,8 6 767,7 4 461,5 39 539,3 88,1 99,4 98,6 99,6 100,0 100,0 100,0 99,8 1 315,4 119,6 574,6 46,0 0,0 0,0 0,0 59,3 11,8 0,4 1,3 0,2 0,0 0,0 0,0 0,2 Purchased (by investors) Individuals Business Com. % 144,3 6,0 76,2 27,3 50,8 0,0 0,0 0,0 0,8

Banks

%

% 100,0 0,1 0,2 0,1 0,2 0,0 0,0 0,0 0,002

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mongolian stock exchange

Corporate bond trading
Total issued 1 200,0 2 955,5 2 737,4 2 776,5 2 663,7 960,9 850,0 Purchased bonds by investors (MNT in mln.) Banks 592,3 1 349,6 1 589,0 2 498,3 1612,0 0,0 0,0 % 49,4 45,7 58,0 90,0 60,5 0,0 0,0 Business Com. 50,6 530,0 882,6 147,0 287,2 446,8 225,5 % 4,2 17,9 32,2 5,3 10,8 46,5 26,5 Individuals 557,2 1 075,9 265,8 131,2 764,5 514,1 625,2 % 46,4 36,4 9,7 4,7 28,7 53,5 73,5

Year 2001 2002 2003 2004 2005 2006 2007

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.

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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 As of January, 2008
Market Capitalization by MNT 53,827,762,500 92,287,184,000 52,334,493,900 39,900,000,000 52,377,400,000 23,133,213,411 18,696,146,000 18,500,000,000 129,351,380,000 13,538,080,000 12,500,000,000 12,514,669,000 34,000,000,000 10,261,946,700 3,872,092,852 10,568,691,000 9,690,083,300 5,566,912,000 14,114,663,000 2,668,001,700 Average daily trade by MNT 53,892,286 43,654,370 26,410,638 22,355,615 12,741,977 63,064,993 5,891,544 19,904,324 3,353,558 3,294,527 9,830,946 2,851,976 2,256,376 1,773,069 3,987,444 980,714 608,453 378,473 317,171 2,406,425 Ranking 3 4 5 6 8 9 11 11 13 14 15 16 19 20 22 22 24 25 27 29

# 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 GOBI

Security name

354 396 460 520 428 309 458 521 209 13 517 484 522 208 25 46 3 191 90 379

BAGANUUR SHIVEE OVOO ZOOS BANK NICI SHARIN GOL TAVAN TOLGOI JENCO TOUR BUREAU MON.TSAHILGAAN HOLBOO BAYANGOL ZB MONGOL SHILTGEEN ULSIIN IKH DELGUUR BDSEC MAKH IMPEX MONINJBAR SPIRT BAL BURAM ULAANBAATAR ZB EERMEL APU MATERIALIMPEX

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.

Code

31

mongolian stock exchange

TOP-20 INDEX IN 2007 (Daily)
Month Day 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 2,151.77 2,149.87 2,152.55 2,139.03 2,139.17 2,146.01 2,146.10 2,147.06 2,342.35 2,397.43 2,431.10 3,012.10 2,988.73 2,996.82 3,025.00 3,019.26 2,911.32 2,083.67 2,093.44 2,084.87 2,095.97 2,133.08 2,284.64 2,287.28 2,309.43 2,309.43 2,800.67 2,870.83 2,877.24 2,901.36 2,976.91 2,954.63 2,937.43 2,919.05 2,918.35 2,914.94 3,275.10 3,280.89 3,282.40 3,336.29 2,067.97 2,071.70 2,076.62 2,076.51 2,083.67 2,222.77 2,225.14 2,229.63 2,230.62 2,278.17 2,637.33 2,660.62 2,681.57 2,725.59 2,725.84 2,955.92 2,963.67 2,964.93 2,961.99 2,955.81 3,141.60 3,194.90 3,208.20 3,285.43 3,276.72 4,422.74 4,360.39 4,390.00 4,441.78 4,408.17 8,066.76 8,122.64 2,031.88 2,044.57 2,051.39 2,057.25 2,146.65 2,181.70 2,203.72 2,212.34 2,213.56 2,637.78 3,043.50 2,964.35 2,964.76 2,972.56 2,955.92 2,910.20 2,902.04 2,909.28 2,907.22 2,927.93 4,110.33 4,147.69 4,287.15 4,241.67 4,387.53 7,863.78 7,914.68 8,092.75 8,131.94 7,772.49 11,864.06 11,940.81 11,714.22 12,157.40 12,712.45 2,526.73 2,561.70 2,596.54 2,161.93 2,148.82 2,467.24 2,493.67 3,027.24 3,001.45 3,017.47 3,038.34 3,038.14 2,835.41 2,828.38 2,782.87 2,784.18 2,831.79 3,893.44 4,013.31 4,019.47 4,033.76 4,117.14 7,521.44 7,542.98 7,573.30 7,650.88 7,735.61 11,154.56 11,292.50 11,325.04 11,510.76 11,720.42 11,788.34 12,169.67 12,511.07 12,131.72 11,814.43 10,783.46 10,785.22 10,657.09 10,360.44 10,538.80 10,558.26 10,959.97 11,141.56 11,890.34 11,731.70 11,860.41 11,915.63 11,906.43 11,123.27 10,960.01 10,860.23 10,676.17 10,799.34 9,954.37 9,852.63 9,647.36 9,640.15 2,910.40 2,876.35 2,851.77 2,855.49 3,340.29 3,404.80 3,469.68 3,511.56 3,538.26 4,925.45 4,926.27 4,402.37 4,300.74 4,473.55 4,473.54 4,551.39 8,386.94 8,597.58 8,698.65 9,801.80 10,051.23 13,054.17 12,896.89 12,407.35 11,890.05 12,063.14 11,404.84 11,229.19 11,163.71 11,187.53 11,216.68 10,052.36 9,989.62 10,049.47 9,981.59 9,999.68 10,568.33 10,558.94 10,452.56 10,281.24 10,170.65 10,256.13 8,213.07 8,246.99 8,327.99 13,519.11 13,676.95 13,528.90 13,276.08 13,200.86 11,637.23 11,596.98 11,565.33 11,544.66 11,525.91 10,284.90 10,249.96 10,247.69 10,204.77 10,098.60 10,006.11 9,978.50 10,261.85 10,326.00 10,557.37 11,692.68 11,391.43 11,450.30 11,191.57 11,499.69 10,387.44 10,589.18 10,625.45 10,403.56 10,324.66 9,847.83 9,878.63 9,904.88 9,854.43 9,940.51 10,449.58 10,342.15 9,444.85 9,441.35 9,458.54 9,588.42 9,517.48 1 2 3 4 5 6 7 8 9 10 11 12

High Low Average

2152.55 2031.88 2101.10

2431.10 2146.65 2253.51

3025.00 2467.24 2770.65

3043.50 2911.32 2970.56

3336.29 2782.87 3017.17

4441.78 3340.29 4026.96

8131.94 4300.74 6633.82

12712.45 8213.07 10490.24

13676.95 11731.70 12461.66

11692.68 10657.09 11214.89

10625.45 9640.15 10160.72

10568.33 9441.35 10014.03

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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
Purchased Volume Value (thous. (MNT in shares) mln.) 67,823.3 2,803.8 7,208.4 2,112.1 41,337.9 6,225.5 3,395.6 2,186.0 Sold Rank 1 2 3 4 Broker dealers company BDSEC DELGERKHANGAI WORLDKEY ZERGED Volume (thous. shares) 73,254.8 5,048.8 2,272.1 17,886.4 Value (MNT in mln.) 35,024.9 13,199.2 3,266.6 1,587.6

Broker dealers company BDSEC GLOBAL ASSET DELGERKHANGAI

34

WORLD KEY

mongolian stock exchange

ZERGED DARKHAN BROKER KHANSH INVEST BATS ALTAN SAN ARGAI BEST CHANDMANI BAYAN GENDEX BULGAN BROKER MERGEN SANAA MONSEC MONGOL SECURITIES SANAR ERDENEST MASDAQ CCP BATS INVEST TAVAN BOGD FRONTIER ALTAN KHOROMSOG UNDURKHAAN INVEST BLOOMSBURY NIKI BUMBAT ALTAI MUNKHUD TOTAL

18,227.2 3,775.6 1,496.3 1,779.0 1,715.5 1,568.4 1,891.7 664.6 1,349.5 347.0 646.8 542.4 382.5 242.1 419.6 153.9 238.2 300.4 28.2 160.5 98.6 87.1 31.1 9.5 0.7 116,104

1,357.4 1,170.4 1,110.6 969.5 791.5 700.7 596.7 588.0 326.6 224.2 223.8 197.9 115.4 113.9 94.6 92.2 73.3 60.6 53.0 50.0 33.0 18.1 12.2 7.6 0.4 62,127

5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29

BULGAN BROKER ARGAI BEST DARKHAN BROKER BATS MONSEC MERGEN SANAA GENDEX CHANDMANI BAYAN MONGOL SECURITIES ERDENEST TAVAN BOGD MASDAQ KHANSH INVEST GLOBAL ASSET CCP ALTAN SAN UNDURKHAAN INVEST ALTAN KHOROMSOG SANAR NIKI BATS INVEST BUMBAT ALTAI MUNKHUD BLOOMSBURY FRONTIER

1,782.6 770.8 2,104.4 1,159.0 555.4 594.8 552.3 683.6 441.2 543.7 157.7 256.5 363.7 93.0 548.5 86.0 98.3 88.4 163.4 38.7 163.5 61.8 207.6 4.8 0.0 109,982.0

1,321.6 1,023.7 843.4 635.4 530.0 453.0 440.1 438.2 428.3 325.2 273.2 266.0 260.6 197.8 135.3 133.4 110.8 108.8 94.3 91.1 69.3 67.3 61.9 1.6 0.0 61,388.7

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mongolian stock exchange

CoNtaCt INFoRMatIoN
No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 Broker dealers company AJNAI INVEST ALTAN KHOROMSOG ALTAN SAN ARGAI BEST BATSINVEST BATS BDSEC BLOOMSBURY BULGAN BROKER BUMBAT ALTAI CHANDMANI BAYAN CCP DARKHAN BROKER DELGERKHANGAI SEC. ERDENEST FRONTIER GENDEX GLOBAL ASSET KHANSH INVEST MASDAQ MERGENSANAA MONGOL SEC. MONSEC MUNKHUD NIKI SANAR TAVAN BOGD UNDURKHAAN INVEST ZERGED WORLD KEY Head office 345757 455822 99118082 99113297 320773 326042 321763 356060 322708 99431203 95253102 331754 328970 95252453 99356857 70119999 636335 320889 684596 99881008 451626 95252719 91918840 95256869 324790 99098709 351210 682861 367609 330594 330594 462130 632959 321763 343477 Fax 345656 Trading floor 313765 313648 310683 313324 323774 313372 310487 313323 313656 313235 313301 99007069 323807 321021 313327 311020 314518 313526 310547 310510 313634 313291 313311 313346 313676 Director D.Munkhsaihan T.Munkhur TS.Tsend D.Aruinbold L.Javzmaa D.Batnasan D.Dayanbilguun B. Myagmarsuren N.Amgalan O.Shirnedev B.Batsaikhan S. Gantulga Sh.Dorjsuren M.Batorgil A.Aruinsain Masateru Igata B.Bathuyag Li Keong Guu TS.Altanchimeg V.Battulga M.Tumurtugoo Z.Nomundari M.Otgonbaatar G.Batmunkh U.Tuvshinjargal B.Enkhbayar K.Aliya N.Oyuntungalag Sh.Erdene Ganzorig worldkey@zoosbank.mn sanar@yahoo.com tavanbogd@mol.mn mirai@magicnet.mn monsecl182004@yahoo. com khansh_invest2004@ yahoo.com selbro@yahoo.com info@irisasia.com info@ccp.mn gbrsn@yahoo.com bats_bdllc@chinggis.com bdsec@yahoo.com nander7396@yahoo.com ganaa3232@yahoo.com E-mail ajinve@yahoo.com

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30

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
     

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

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mongolian stock exchange

StoCk PRICE tRENDS
2000 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

2000

2001

2002

2003

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

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