Mongolia: 2010-2020 Outlook Eurasiamongoliaoutlook2020

1. Mongolia: 2010-2020 Outlook

2. Summary
Mongolia: Massive Resources
Mongolia 2010: Start of Multi-Year Bull Market
Mongolia: Today and in 2020
Growth Drivers
Similar Growth Stories:
• Kazakhstan
• Qatar
Conclusions
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3. Mongolia: overview
Land Area: 1.56m sq.km
(50% size of India)
Population: 2.7m
(lowest density in the world)
Capital: Ulaanbaatar
Religion: 95% Buddhism
Literacy rate: 97.8%
Language: Khalka Mongol
Currency: Mongolian Togrog (“MNT”)
Political System: Democracy
GDP (2010): $6.6bn
GDP per capita: $2,400
GDP est 2025: $60bn
GDP growth (2010-25): c.20% pa
GDP per capita (2025): $20,000
Source: National Statistics Office of Mongolia
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4. Mongolia: economic growth
•
Fast growing economy
•
Drivers of growth: investment, demand for resources and commodity prices
•
Large scale production starting at Oyu Tolgoi, Tavan Tolgoi and other mines
•
GDP forecast to grow 10x to $60bn by 2025
GDP Growth
10 largest deposits worth US$1.3tn
40
35.1
35
31.9
28.0
30
23.7
25
19.1
20
15
10
6.6
7.7
8.9
10.2
12.3
15.3
5
0
2010 2011f 2012f 2013f 2014f 2015f 2016f 2017f 2018f 2019f 2020f
GDP, US$bn (LHS)
Source: Temasek
Source: Eurasia Capital estimates
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5. Best Performing Market
MSE Top-20 up 138% in 2010, best performing market globally
MNT +12.9% vs USD in 2010, second best performing currency globally
1490
MSE Top-20 index
12,500
MNT vs USD
1470
11,500
1450
1430
10,500
1410
9,500
1390
8,500
1370
7,500
1350
6,500
1330
1310
Source: MSE
30-Aug
16-Aug
2-Aug
19-Jul
5-Jul
21-Jun
7-Jun
24-May
10-May
26-Apr
12-Apr
29-Mar
15-Mar
1-Mar
15-Feb
1-Feb
18-Jan
4-Jan
5,500
1290
Source: Bank of Mongolia
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6. Mongolia - Saudi Arabia of Mining
“The country is incredibly resource rich, another Saudi
Arabia, next to the largest population in the world,”
“Mongolia could be the Saudi Arabia of Asia” Mark Faber,
Emerging markets investor
“I expect frontier markets, like Mongolia, will continue to
have very compelling investment opportunities over the
next year and beyond.” Mark Mobius, Chairman,
Templeton Emerging Markets
‘‘Coal from Mongolia to China is happening. It is expanding,
probably doubling every two years,’’ Tom Albanese, CEO,
Rio Tinto
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7. Mongolia in 2010 and 2020
2020
2010
35
6.6
5x
18% per year
2,450
4x
10,000
MSE Mkt Cap, US$bn
1
20x
20
Bank Assets, US$bn
2.8
9x
25
1,300
+30%
GDP, US$bn
GDP per capita, US$
MNT/US$ rate
900
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8. Commodity Output
2010
2020
Coal
17m tn per year
100m tn per year
Iron ore
3.5m tn per year
12m tn per year
Copper
600,000 tn per
year
1.5m tn per year
5tn per year
50tn per year
0.3m tn per year
4m tn per year
Gold
Crude Oil
Source: Eurasia Capital estimates
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9. Growth Story I: Kazakhstan
2002
GDP, US$bn
GDP per capita, US$
KASE MrktCap,
US$bn
Banking assets, US$bn
2007
4.2x
105
5.5x
6,750
1.2
58x
70*
8
12x
97
370
10x
3,700
25
1,250
* $100bn 2008
Property, $/m2
residential
retail
400
20x
land
1,000
50x
8,000
50,000
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10. Growth Story II: Qatar
1998
GDP, US$bn
10
GDP per capita, US$
15,000
Qatar SE MktCap,
US$bn
Banking assets, US$bn
Population, mn
2010
11x or
22% p.a.
5.5x
4
27x
11
12x
0.6
2.8x
111
82,000
104
133
1.7
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11. Conclusions
Economy
Fastest growing economy in next decade (2010-2020)
Drivers
Investments, exports, wealth creation
Industries
Mining, banking, property, consumer
Opportunities
All asset classes, esp. local public equities
Environment
Democracy, political stability, pro-business government
MONGOLIA
Right Place and Right Time to Invest!
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12. Eurasia Capital
Eurasia Capital is a Hong Kong-based pan-regional investment bank
with strong presence and focus in frontier markets in Eurasia
Strong focus on Mongolia and Central Asia
Team of 30 professionals with five offices in the region
Pan-regional team provides full-fledged advisory and brokerage services
to resource companies, private equity groups and hedge funds
Advises on cross-border M&As and strategic investments in resources
sector
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13. Offices
MONGOLIA
Suite 65, 6th Floor
Grand Office Center
Jamiyangun Street 12,
12,
st Khoroo
1
Sukhbaatar District
Ulaanbaatar
Tel: +976 7013 0078
Fax: +976 7013 0078
HONG KONG
33/F One International Finance
Center,
1 Harbor View Street Central,
Hong Kong
Tel: +852 2824 8716
Fax: +852 2166 8999
www.eurasiac.com
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