After series of meetings with Government officials and business leaders in the last few days in UB, we have confirmed that the economic activity in Mongolia is slowing down significantly in the first quarter. Therefore, we have decided to lower our economic forecast for this year to 6%. However, we have also confirmed that the business environment in Mongolia will not deteriorate further. That is mainly because of the anticipation that more favorable policies should be taken by the Government in a near future. Also, the implied risk premium for major Mongolia related listed companies are too high for politically stable country like Mongolia and valuations are too low.
Therefore, we have decided to increase risk weight of assets in Mongolia. However, we are not fully convinced of the friendly policies taken by the Government yet as the initiatives taken by the Government is still early stage. We wish to see more positive signs before we will be more positive on Mongolia. Please click below link to know more details.
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