Recent sell-off of currencies of emerging economies has made us more cautious on the outlook of Mongolia. In addition, we believe that the economic activity in Mongolia is slowing down significantly this year. The delay of the negotiation between Rio Tinto and Mongolian Government regarding the underground of Oyu Tolgoi is also casting a shadow to the outlook. Therefore, our forecast for the GDP in 2014 remains at 6% which is much lower than street consensus. Also, we feel much more downside risk of the investment climate in Mongolia in case OT will not be resolved soon. Therefore, we are decreasing risk weight of assets in Mongolia. In addition, we are not fully convinced of the friendly policies taken by the Government yet as the initiatives taken by the Government are still early stage. Therefore, we wish to see more positive signs before we will be more positive on Mongolia.
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