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Asia-PacificOctober 3 2016

Mongolia's flat economy leaves stock exchange in sleep mode

As Mongolia's economy slows, the chief executive of its stock market, Bolor Munkhsaikhan, tells Stefania Palma about efforts to deepen local capital markets to help hedge against a volatile currency and to diversify corporate borrowing away from bank loans.
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In 2012, when Mongolia was enjoying gross domestic product (GDP) growth of 12.4%, The Banker reported that the Mongolian Stock Exchange (MSE) was “struggling to keep pace with the demands of the [economic] boom”. Today, the economy has slowed – the Asian Development Bank predicts almost no growth (0.1%) for the country in 2016, and so too has MSE activity.

To survive the downturn, it is essential to deepen local capital markets across the board, according to MSE chief executive Bolor Munkhsaikhan. However, the number of initial public offerings (IPOs) and the volume of stock trading have both dropped in 2016.

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