Mongolian Stock Exchange -2007 english

FaCt Book

2007

m o n g o l i a n s t o c k e x c h a n g e

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taBLE oF CoNtENtS

MESSaGE FRoM tHE CEo 5 2007 ECoNoMICaL REVIEW 6 MSE INtRoDUCtIoN

Mission statement 10 History 10Company structure 10 Organizational chart 11MSE Highlights 13

FINaNCIaL StatEMENt

Balance sheet 14Income statement 15

HIStoRICaL tIMELINE 16

LIStING at MSE Listing procedures 18Listing criteria 18 Listing fee 19Listed companies 20

tRaDINGTrading process and mechanism 24 Market highlights 25Stock trading 2630 Active Traded Stocks 26Bond trading 27 Clearing and Settlement 28

MSE INDEXES Top-20 indexes, 2006-2007 30

MEMBER CoMPaNIES Legislations and Rules 34Application for membership 34Membership fee 34 Member broker & dealer companies 34Stock trading volume of broker & dealer companies 34Contact information 36

MSE`S otHER aCtIVItES Information center 38Training center 38Sports competition 38Publications 38

StoCk PRICE tRENDS 39

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m o n g o l i a n s t o c k e x c h a n g e m o n g o l i a n s t o c k e x c h a n g e


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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 securi-ties trading system, technology, providing utilizing beneficial, transparent, trustwor-thy trading environment, developing information disclosure and dissemination proce-dures, systematically educating investors, issuers and all capital market participants, also establishing connections with international financial and capital market partici-pants and professional organizations. In 2007 Mongolian Stock Exchange has achieved impressive results. The total trad-ing 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 con-sisted 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 rep-resents 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 dis-seminate 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 pub-lic.Letter of Intent signed with Korea Exchange on implementing “Mongolian Stock Exchange technology, software reform and human resource capacity building” projectParticipated at both international and domestic seminars, trainings and orga-nized joint seminars and trainings with foreign specialists.

This year Mongolian Stock Exchange will be focusing on consolidating above suc-cessful results also on expanding the market, improving its operations to the interna-tional standards.

R.SODKHUUChief Executive officer

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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 contrib-uted 4.3 percentage points).

For the preliminary result of 2007, total revenue and grants of General budget amount-ed 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 expen-diture 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 bal-ance 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 in-creased by 9.1 percent or 21.9 billion MNT and excise tax increased by 33.6 percent or 33.6 billion MNT respectively.

*MNT stands for abbreviation of Mongolian National Tugrug - currency. 1 USD = 1175 MNT


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ECoNoMY oF MoNGoLIa

Basic Indexes

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

1. Annual growth of GDP (%)*

-3,0 2,3 6,3 2,4 4,0 3,5 3,2 1,1 1,0 4,0 5,5 10,6 6,2 7,4 9,9

2. Inflation rate 183,0 66,3 53,1 44,6 20,5 6,0 10,0 8,1 8,0 1,6 4,7 11,0 9,5 6,0 15,1

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

3. Foreign trading

Export (USD in mln.)

382,

6

356,

1

473,

3

424,

3

568,

5

462,

3

454,

2

535,

8

521,

5

524,

0

600,

2

853,

3

1064

,9

1 54

2,8

1 88

9,0

Import (USD in mln.)

379,

0

258,

4

415,

3

450,

9

468,

3

503,

3

512,

8

614,

5

637,

7

690,

8

787,

3

1011

,6

1184

,3

1 48

5,6

2 11

7,3

12.0

10.0

8.0

6.0

4.0

2.0

0.0

-2.0

-4.0

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

200.0180.0160.0140.0120.0100.080.060.040.020.00.0

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

GDP growth rate Inflation rate

* 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 Mon-gol Bank data

4. State budget

Revenue**(MNT in bln.) 54,8

85,5

140,

9

160,

0

212,

0

225,

5

254,

8

351,

1

439,

3

477,

0

535,

8

697,

4

837,

8

1360

,4

1851

,2

Expenditure***(MNT in bln.) 61

,6

98,9

143,

9

176,

6

287,

6

342,

2

361,

7

429,

7

489,

7

548,

6

616,

5

713,

8

764,

5

1237

,0

1749

,2

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

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

5. Exchange rate MNT / US $

473,

6

693,

5

813,

2

902,

0

1 07

2,4

1 09

7,0

1 10

2,0

1 12

5,0

1 16

8,0

1 20

9

1 22

1,0

1 16

5,0

1 17

0,0

6. Currency issued in circulation (MNT in bln.) 29

,8

46,1

56,8

61,8

91,6

107

119

134,

6

152,

8

168,

5

191,

7

245,

0

364,

1

Ì1 Money (MNT in bln.) 42,6

64,3

76,1

82,6

114,

8

130,

8

156,

2

188

213

213

269

332

515,

4

Ì2 Money (MNT in bln.)

102,

0

128,

4

170,

1

167,

2

220,

2

258,

8

331,

1

470,

1

703,

3

847,

0

1170

1537

2191

,9

Foreign trading225021001950180016501500135012001050900750600450300150

0

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

State budget

2000

1800

1600

1400

1200

1000

800

600

400

200

0‘93 ‘94 ‘95 ‘96 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07

Source: monthly bulletin, yearbook of the National Statistical Office


MSE INtRoDUCtIoN

Mission statement HistoryCompany structure organizational chartMSE HighlightsFinancial statementHistorical timeline

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MISSIoN StatEMENt

The mission statement of Mongolian Stock Exchange is to work profitably as contrib-uting 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 Mon-golia, 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 enter-prises. Thus, on January 18th of 1991 Mongolian Stock Exchange was established.

Auctions officially began on 7 February 1992; shares in three companies were auc-tioned 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 Govern-ment resolution of 1995.

With the start of secondary market activity, shares of over 38.8 billion MNT (32.1 mil-lion 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 Com-mittee, 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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oRGaNIZatIoNaL CHaRt

Auditor

Shareholders Assembly(State property committee)

Chief executive officer

Board of DirectorsMSE

Directors

Vice Director

Training center

Information center

Internet center

Farming and husbandry

Tra

de a

nd R

esea

rch

D

epar

tmen

t

Lis

ting

Dep

artm

ent

Surv

eilla

nce

and

Mon

itor

ing

Dep

artm

ent

Info

rmat

ion

and

Tec

h-

nolo

gy D

epar

tmen

t

Senior Vice Director Head of AdministrativeDivision

Secu

rity

uni

t

Adm

inis

trat

ive

Uni

t

Info

rmat

ion

and

publ

ic

rela

tion

dep

artm

ent

Fin

anci

al d

epar

tmen

t

Inte

rnal

Ser

vice

s un

it

Workers canteen and

housekeeping

MSE’S DEPaRtMENtS aND tHEIR RESPoNSIBILItIES:

trade and Research Department

Responsibilities:To utilize market tradeTo organize control and monitor the trading process To perform stock watch To calculate, produce, analyze data related to securities market prod-ucts and services To conduct researches and studiesTo 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 operationsProvide technical aid to staff and repair services to the computers and equipments

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administrative Division Responsibilities:International Relations and cooperationInternal activities CEO Secretariat Manage document archiveManage and administer the Security unit Legal adviseTraining centerTo provide management policy of Administrative Unit and Information & Public Relations Department

Listing and Surveillance Department

Responsibilities:Listing, de-listing securities, making amendments changes on listingTo 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 rightTo manage membership admission process for brokerage and dealer firms To supervise and monitor trade /to conduct inspections on price fluctua-tion to take actions based on the inspection results or reports, announce-ments 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 trad-ing To organize press conference and advertising activitiesTo 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, bookkeepingFinancial statements, paying billsEstimating costs, issuing guarantees

Internal Services

Utilities supplyFarmingWorkers canteenHousekeeping


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MoNGoLIaN StoCk EXCHaNGE HIGHLIGHtS 1999-2007

1999 2000 2001 2002 2003 2004 2005 2006 2007

1. Listed companies 418 410 400 403 402 395 392 387 384

2. Market capitalization (in mln.)

In MNT 4 428,0 40482,8 41283,3 35847,6 49513,4 29832,1 55.701.0 131179,1 716 272,3

In US dollar 32,1 36,9 37,5 31,9 42,4 24,7 45,6 112,6 612,2

3. Trading value (in mln.)

In MNT 3 274,2 2 973,3 1 723,3 1 373,0 895,9 654,0 2.547.3 12 604,3 62 126,8

In US dollar 3,1 2,7 1,6 1,2 0,8 0,5 2,1 10,8 53,1

4. Trading volume (in mln.) 21,4 35,4 15,9 9,8 8,1 9,1 25,9 74,5 116,3

5. Daily average

Value (MNT in mln.) 13,0 11,7 6,8 5,4 3,6 2,6 10,1 49,8 245,6

Volume (in thousands) 85,1 138,9 62,3 38,6 32,3 35,6 102,6 294,6 458,9

6. Bond trading value (MNT in bln.)

Government 11132,1 30750,2 41690,7 21722,5 12463,8 6.767.7 4 461,5 39 599,3

Corporate 1 204,3 2 958,0 2 988,3 2 776,5 2.663.7 960,9 850,7

7. ÒÎÐ-20 index:

High 274,2 506,3 963,0 1 450,4 1 045,5 910,7 1053,0 2 030,81 13 676,95

Low 192,1 260,4 479,8 803,7 541,8 477,6 502,2 988,04 2 031,88

Average 230,3 359,3 650,8 1 120,6 740,7 667,4 796,9 1 291,91 6 699,87

Close 255,7 469,9 814,0 933,9 895,9 585,7 1019,2 2 030,81 10 618,78

8. Number of transaction (in thousands) 60,8 29,5 14,7 14,8 13,5 13,0 9,1 11,6 28,9

9. Number of accounts in CD* (in thousands)

270,2 277,2 273,3 277,3 281,2 287,8 292,7 309,1 74,9

10. Member broker dealers company 41 42 42 34 26 25 24 25 30

11. Member investment funds 16 17 16 2 - - - - -

12. Exchange rate US$ / MNT** 1 072 1 097 1 102 1 125 1 168 1 209 1221 1165 1169,97

13. Inflation rate*** 10,0 8,1 11,2 1,6 4,7 11,0 9,5 6,0 15,1

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

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FINaNCIaL StatEMENt

BALANCE SHEET (in MNT)

Assets 2007 2006 2005 2004 2003 2002

Cash 463,514,965 113,442,072 125,884,918 64,918,163 23,165,792 129,272,475

Accounts receivable 29,777,518 37,582,857 42,774,229 128,721,495 243,116,718 1,403,676,701

Inventories 48,368,083 45,484,232 40,885,678 41,544,557 40,678,618 48,237,621

Current assets 174,030,331 36,963,255 70,000 689,147 416,764 656,548

Total current assets 715,690,898 233,472,417 209,614,833 235,873,362 307,377,891 1,581,843,345

Fixed assets 1,987,666,892 1,932,777,592 1,933,616,517 1,992,706,900 2,032,304,087 2,514,718,506

Accumulated depreciation

(245,204,715) -295,903,457 (301,612,325) -288,849,584 -285,610,935 -281,481,243

Total non-current assets

1,742,462,177 1,636,874,135 1,632,004,191 1,703,857,316 1,746,693,152 2,233,237,262

Total assets 2,458,153,075 1,870,346,551 1,841,619,024 1,939,730,678 2,054,071,043 3,815,080,607

Liabilities

Accounts payable

share - - 836,872,929

dividend - - 323,540,486

bond - - 1,032,545

Other accounts payable 12,688,100 12,688,100 12,700,581 14,651,072 14,752,356 222,464,631

Total current liabilities 12,688,100 12,688,100 12,700,581 14,651,072 14,752,356 1,383,910,590

Total liabilities 12,688,100 12,688,100 12,700,581 14,651,072 14,752,356 1,383,910,590

Shareholders’ equity

Equity: State 1,867,708,800 1,791,969,748 1,784,969,748 1,873,832,870 1,866,899,108 2,265,886,585

Special fund 7,862,828 7,554,728 7,484,628 7,359,368 7,398,678 7,282,199

Retained earnings:

for accounting period

511,759,371 21,669,908 (7,423,302) -116,249,770 85,806 58,851,664

for previous period

56,083,976 34,414,068 41,837,370 158,001,333 158,001,333 99,149,570

Revaluation of fixed assets

2,050,000 2,050,000 2,050,000 2,050,000 6,933,762

Total equity 2,445,464,975 1,857,658,451 1,828,918,443 1,925,079,606 2,039,318,687 2,431,170,118

Total liabilities and equity

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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INCOME STATEMENT (in MNT)

Revenues 2007 2006 2005 2004 2003 2002

Securities transaction commission of:

securities trading 679 427 427 217 079 580 47 436 023 30 498 275 146 411 650 222 914 148

off-exchange trading

Fees

listing, member companies, research 144 965 270 54 081 147 55 343 538 50 699 813 59 473 337

Other 54 329 783 61 400 380 70 261 777 11 633 297 98 537 952 11 365 739

Total revenues 878 722 480 278 479 960 171 778 947 97 475 110 295 649 415 293 753 225

Expenses

Salary, social insurance, incentives 119 174 964 86 101 307 70 012 268 72 569 598 81 179 186 73 408 874

Utilization expenses (electricity, gas, water)

10 742 460 7 045 833 7 769 574 7 581 641 9 751 429 9 187 507

Business trip, Board of Governors 72 966 070 27 970 482 16 572 160 16 871 583 23 705 226 20 692 486

Transportation, fuel, repairs 26 243 647 21 354 773 13 811 067 8 878 800 29 737 916 9 442 250

Raw materials 8 224 359 10 934 568 7 624 585 2 886 955 3 398 417 3 728 972

Depreciation 67 438 108 22 906 278 12 762 742 57 673 353 45 620 617 51 519 607

Advertising and promotion, training 9 580 470 13 902 022 6 567 778 2 649 299 5 733 854 6 180 086

Printing-and postage 13 721 515 12 001 692 11 203 937 6 607 967 17 514 023 11 773 027

Others 25 938 414 48 975 364 26 889 794 10 132 420 70 691 779 6 702 719

Total expenses 354 030 009 251 192 318 173 213 904 185 851 616 287 332 447 192 635 527

Non-operating revenue

Exchange rate changes, others 128 851 92 306 224 364 36 968

Non-operating expenses

Exchange rate changes, others 12 933 100 5 617 734 6 117 196 27 965 570 8 455 526 42 303 002

Operating profit / loss 511 759 371 21 669 908 (7 423 302) -116 249 770 85 806 58 851 664

Extra- ordinary income

Extra-ordinary expenses

Profit before provision for Tax 511 759 371 21 669 908 (7 423 302) -116 249 770 85 806 58 851 664

Income tax expenses

Net profit / loss for accounting period 511 759 371 21 669 908 (7 423 302) -116 249 770 85 806 58 851 664

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MSE HIStoRICaL tIMELINE

1991 January 18 MSE established according to the Government decree No.22 May 22 Privatization law enacted. 1992 February 07 Primary market trading started. 1994 September 26 Securities law enacted. November 14 Mongolian Securities Commission established. 1995 July 01 Privatization of securities companies has started. July 31 Securities Dealers and Brokers Association founded. august 28 Secondary market trading started. 1996 october 25 The first trading day of the Government bond. 1998 February 11 Off-exchange trading started. october 01 The MSE joined as a full-member in Federation of Euro-Asian Stock Exchange1999 august 25 A software for trading was introduced. September 10 1000th trading day November 01 The MSE has started to calculate composite price

index.2000 January 21 The first Securities Company with foreign investment registered as a member of MSE September 26 Structure of the MSE reorganized. November 16 Trading of the Government bond restarted. 2001 January 18 10th anniversary of the MSE. June 08 Corporate bond trading started. 2002 December 03 Memorandum of Understanding on Mutual Cooperation with Taiwan Stock Exchange was

signed2003 March 26 MSE was divided two independent organizations: “Mongolian Stock Exchange” “Securities Clearing House and Central Depository”

March 26 MSE was reorganized as a profit making state owned Shareholding Company

November 06 Shares of the MSE listed on the Stock Exchange. 2004 october 29 First time the special license has been issued to an Underwriting Company on security market2005 March 30 “Information Center” of MSE established November 01 “Training center” of capital market was established.2006 January 18 Celebrated 15th anniversary of MSE June 15 Memorandum of Understanding with Korea Ex

change was signed July 19 Memorandum of Understanding with Istanbul

Stock Exchange was signed2007 January 4 FRC Announces 2007 as a “Financial Market Development Year” august 1 3000th trading has commenced with total transaction val ue of 1 bln MNT august 6 Letter of Intent with GreTai Securities Market was

signed august 21 Joint Project research has started with Korea Exchange December 05 Signed on Memorandum of Understanding on

further cooperation with Hong Kong Stock Exchanges and Clearing Limited


LIStING at MSEListing proceduresListing criteriaListing feeListed companies

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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 General criteria Specific criteria

Shareholders equity Above 10 mln MNT Above MNT 10 mln

Value of non-current assets within the issuing securities

Not less than 10% Not less than 20%

Number of Shareholders At least 50 At least 50

Percentage of public offered securities


Duration of corporate existence At least 1 year At least 3 years

Income/loss amountMust show some income. If the company is in loss, loss amount should be not higher than 30% of its total asset.

No criteria


19


Listing criteria for Bonds

Criteria General criteria Specific criteriaShareholders equity Above MNT 10 mln Above MNT 10 mln

Real estate assets size of the whole capital


Listing securities volume and value

From 50 thousand shares MNT 500 mln and above

From 100 thousand shares MNT 1 bln and above

Duration of corporate existenceAt least 3 years permanent operation and well ran during last year

At least 5 years permanent operation

GuarantySecurity, guaranty is required. In some cases, guaranty is not required.

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 Fees (proportional fees)

10 000 000 – 500 000 000 500 000

500 000 001 – 5 000 000 000 750 000 + 0.02% for up 500 000 000

5 000 000 001 and above1 700 000 + 0.01% for up 5 000 000 000

Joint Stock Company - 100% state owned companies 500 000

annual fee Fees (proportional fees)

100 000 000 0.4%

100 000 001 – 500 000 000 400 000 + 0.001% for up 100 000 000

500 000 001 and above 800 000 + 0.00001% for up 500 000 000

Joint Stock Company – 100% state owned companies 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.

20


Admittance fee Fees (proportional fee)

Government and General obligation bond 0.05% of total traded value

Company bond 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 2001 2002 2003 2004 2005 2006 2007

Listed companies 411 401 403 402 395 392 387 384

Newly listed 5 - 8 12 4 3 3 5

Delisted 12 10 6 13 11 7 8 8

Listed &Delisted shares (in thousand)

Newly listed shares 1 436,8 - 385 901,8 569 865,7 791 861,7 147 266,1 120 000,0 156 128,7

Additional listed shares

1 077,8 1 436,8 406,0 - - 577 120,0 9,6 10000,00

Delisted shares 3 170,0 1 612,3 3 313,5 14 366,9 7 573,9 711 977,0 11 210,9 1 091,8

Shareholder’s meeting 176 152 148 119 117 136 138 153

Pay dividend 17 22 16 20 12 17 23 28

Listed companies in 2007

CompanyOutstanding

sharesPar value of

shares ( MNT)Date of listing Shareholders

Dîrnod auto zam 74 922 100 2007.02.10 State owned company

Tuul Songino usnii nuuts 120 000 000 1 000 2007.04.13 Joint stock company

High-B-Oil 5 000 000 100 2007.05.02 Joint stock company

Darkhanii tumurlugiin uildver 21 353 312 1 000 2007.08.02 State owned company

Olloo 9 700 497 100 2007.09.12 Joint stock company


21


Delisted companies in 2007

Company Date of delisting ReasonArtsat mogoi 2007.01.05 Reorganization of company

Teewerchin-7 2007.01.26 Reorganization of company

UB barilga 2007.02.27 Reorganization of company

Tuulcashmere 2007.03.06 Reorganization of company

Altan tulguur 2007.07.17 Reorganization of company

Zuun turuun 2007.10.05 Reorganization of company

Mongol shuudan trans 2007.10.26 Reorganization of company Auto diesel 2007.12.03 Reorganization of company

30 LEaDING CoMPaNIES LIStED oN MSE

(By market capitalization)

Rank Name of stocks MNT in mln.

1 Mon.Tsakh.Kholboo 129 351,38

2 Baganuur 92 287,18

3 Gobi 53 827,76

4 NIKI 52 377,40

5 Shivee ovoo 52 334,49

6 Zoos bank 39 900,00

7 BDSec 34 000,00

8 Tuul songino usnii nuuts 28 632,06

9 Shariin gol 23 133,21

10 Tavan tolgoi 18 696,15

11 Jenco tour bureau 18 500,00

12 Apu 14 114,66

13 Bayangol hotel 13 538,08

14 UID 12 514,67

15 Mongol shiltgeen 12 500,00

16 Mongol securities 12 300,00

17 Spirt bal buram 10 568,69

18 Makhimpex 10 261,95

19 UB hotel 9 690,08

20 Eermel 5 566,91

21 Erdenet khivs 4 503,08

22 Moninjbar 3 872,09

23 Darkhan nekhii 3 205,89

24 Zoos goyol 3 154,15

25 Talkh chicker 3 071,11

26 Berkh uul 2 859,31

27 Mongol emimpex 2 720,71

28 Darkhan makh-expo 2 689,23

29 Material impex 2 668,00

30 Takhi Co 2 379,97

Total 675 218,23

Percentage in total market capital 94,27%

22


CoMPaNIES aND SECURItEIS LIStED at MSE 2006-2007

(As of December 31st 2007)

2006 2007 Change

Total number of listed companies Type: State owned Private

387 384 - 6

59 56 - 3

328 328 0

Total volume of listed securities (quantity)Ownership type: State Private investors

2,270,794,712 2,491,116,030 +220,321,318

1,866,939,156 1,855,073,030 - 11,866,126

403,855,556 636,043,697 +232,188,141

Companies that issued new securities Type: - State owned Volume of issued securities - IPO Volume of issued securities

3 5 +2

- 1 +1

- 21,353,312 +21,353,312

3 4 +1

120,000,000 134 775 419 +14 775 419

Companies that issued addional securities Volume of addional securities

1 1 0

9,617 10 000 000 +9 990 383

Number of delisted companiesNumber of shares

8 8 0

11,210,905 1,091,828 -10,119,077

Tender offer 8 8 0

Companies that delivered shareholders meeting minutes to MSE

3 6 +3


tRaDING at MSEtrading process and mechanismMarket highlights Stock trading 30 active traded StocksBond tradingClearing and Settlement

24


tRaDING PRoCESS aND MECHaNISM

trading process

All listed securities on MSE are traded through Exchange’s electronic trading plat-form 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 bro-ker’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

Mongolian Stock Exchange

498499500501502

Buy order

Sell order

Investor Investor

Price prioriy time prioriy

Buy orderBuy order Sell order Sell order

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 tradestock’s secondary market tradecompany’s bond primary market, secondary market tradegovernment and general obligation bond’s secondary market tradederivatives trade


25


Following types of trade conducted using auction method:Government and General obligation bond’s primary market tradeGovernment ownership securities tradeTrades executed by the order of law enforcement of authorized bodySecurities 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 whole-some 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 bln0.3% 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 thou-sand 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

Trading volume (shares) Trading value (MNT)

Total Daily Ave. Total Daily Ave.

1995 84 6,6 78,4 811,5 9,7

1996 236 39.87061 106.0 4,484.8 54.5

1997 253 33.65989 133.0 12 165,7 48.1

1998 253 33.07354 130.7 10 756,0 42,5

1999 252 21.44667 85.1 3 274,2 13.0

2000 255 148.51234 143.2 14 105.4 439.8

2001 255 479.40410 78.7 33 677.8 1309.5

2002 255 792.13786 65.4 46 019.2 2221.9

2003 250 514.33490 65.2 25 598.3 2760.5

2004 255 208.21980 80.3 15 894.3 4212.7

2005 253 401.20000 175.1 11 978.1 6799.8

2006 253 220.70000 319.3 18 026.7 2292.0

2007 253 658.90200 502.9 102 576.1 4221.0

26


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 Name of stocksVolume

(tous.shares)Rank

Name of stocks

Value (MNT.mln)

1 Jenco tour bureau 25,181,500 1Tuul songino usnii nuuts

13,701,418,260

2 Mongol emimpex 17,604,600 2 Shariin gol 8,015,049,461

3 Berkh uul 16,219,988 3 Gobi 7,200,927,584

4Tuul songino usnii nuuts

13,701,056 4 Baganuur 5,627,677,045

5 Moninjbar 12,195,006 5 Zoos bank 4,568,838,651

6 Olloo 8,774,614 6 Shivee ovoo 3,463,453,620

7 High-B-Oil 4,299,052 7Jenco tour bureau

3,127,936,103

8 Shariin gol 2,794,276 8 Berkh uul 2,011,761,280

9 Zoos bank 2,209,815 9 NIKI 1,709,892,586

10 Baganuur 1,411,570 10 Moninjbar 1,581,731,848

11 Gobi 1,337,821 11 Olloo 1,332,634,284

12 Shivee ovoo 1,149,302 12Mongol shiltgeen

1,285,771,948

13 UID 1,144,771 13Mongol emimpex

1,197,112,800

14 Mongol shiltgeen 1,113,275 14 Tavan tolgoi 958,423,785

15 Auto impex 955,816 15 Makhimpex 849,388,766

16 NIKI 911,204 16 High-B Oil 514,145,005

17 UB buk 618,392 17Mon.Tsakh.Kholboo

478,741,455

18 Makhimpex 603,056 18Bayangol hotel

465,940,797

2007200620052004200320022001200019991998199719961995

116.174.5

25.99.1

8.19.8

15.935.4

21.433.1

33.724.1

6.6

0.0 50.0 100.0 150.0

2007200620052004200320022001200019991998199719961995

70000,060000,050000,040000,030000,020000,010000,00,0

811.5

4340.5

12165.7

10756.0

3274.22973.3

1723.3

1.373.0

895.9

654.0

2547.4

12604.3

62126.8

Trading volume (mln shares) Trading value (MNT in mln)


27


19 ZGMS 320,500 19 UB buk 459,691,366

20 Dornod 270,725 20 UID 417,586,307

21 Material impex 215,908 21Tumriin zavod

401,193,000

22 Tegsh 168,497 22Material impex

325,027,960

23 Mongol savkhi 166,630 23 BDSec 291,158,770

24 BDSec 145,581 24 Auto impex 260,574,243

25 Sonsgolon barmat 143,380 25Darkhan makh-expo

210,593,084

26 Torgon ur 138,722 26Dornod autozam

189,830,048

27Mon.Tsakh.Kholboo

104,335 27 Tegsh 164,734,087

28 Kherlen khivs 103,800 28Spirt bal buram

150,946,337

29 Dornod autozam 97,249 29 Khash ord 108,299,080

30Darkhan makh-expo

84,320 30 UB hotel 84,588,808

Percentage in all stocks

98.37 98.44

Total 114,184,761 61,155,068,368

BoND tRaDING

The total trading volume of the bonds in 2007 was 542.8 thousand and the total trad-ing 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

YearTotal

issued Purchased (by investors)

Banks % Business Com. % Individuals %

1996 114,3 144,3 100,0

2000 11 132,1 9 810,7 88,1 1 315,4 11,8 6,0 0,1

2001 30 647,9 30 452,1 99,4 119,6 0,4 76,2 0,2

2002 41 690,7 41 115,8 98,6 574,6 1,3 27,3 0,1

2003 21 722,5 21 625,7 99,6 46,0 0,2 50,8 0,2

2004 12 463,8 12 463,8 100,0 0,0 0,0 0,0 0,0

2005 6 767,7 6 767,7 100,0 0,0 0,0 0,0 0,0

2006 4 461,5 4 461,5 100,0 0,0 0,0 0,0 0,0

2007 39 599,3 39 539,3 99,8 59,3 0,2 0,8 0,002

28


Corporate bond trading

YearTotal

issued

Purchased bonds by investors (MNT in mln.)

Banks % Business Com. % Individuals %

2001 1 200,0 592,3 49,4 50,6 4,2 557,2 46,4

2002 2 955,5 1 349,6 45,7 530,0 17,9 1 075,9 36,4

2003 2 737,4 1 589,0 58,0 882,6 32,2 265,8 9,7

2004 2 776,5 2 498,3 90,0 147,0 5,3 131,2 4,7

2005 2 663,7 1612,0 60,5 287,2 10,8 764,5 28,7

2006 960,9 0,0 0,0 446,8 46,5 514,1 53,5

2007 850,0 0,0 0,0 225,5 26,5 625,2 73,5

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 se-curities 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 ex-ecuted 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 Se-curities 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.


MSE INDEXEStop-20 index, 2006-2007

30


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 MSEComposite index, which consists from all companies that listed at MSE

7 Sector based indexes. Sector Index calculated from combination of top 10 compa-nies that represent below sectors:

Mining-10Agriculture-10Industry-10Trade and Service-10Tourism-10Construction-10Transportation-10

top-20 index

MSE started calculating the Top 20 since the opening of secondary market (cash trad-ing). 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 ses-sion.

top-20 Index, 2006-2007

14000

13000

12000

11000

10000

9000

8000

7000

6000

5000

4000

3000

2000

1000

006 07


31


LISt oF CoMPaNIES tHat CoMPLEtE tHE toP-20 INDEX oF MoN-GoLIaN StoCk EXCHaNGE

As of January, 2008

# Security nameMarket

Capitalization by MNT

Average daily trade by MNT R

anki

ng

Cod

e

1 GOBI 53,827,762,500 53,892,286 3 354

2 BAGANUUR 92,287,184,000 43,654,370 4 396

3 SHIVEE OVOO 52,334,493,900 26,410,638 5 460

4 ZOOS BANK 39,900,000,000 22,355,615 6 520

5 NICI 52,377,400,000 12,741,977 8 428

6 SHARIN GOL 23,133,213,411 63,064,993 9 309

7 TAVAN TOLGOI 18,696,146,000 5,891,544 11 458

8 JENCO TOUR BUREAU 18,500,000,000 19,904,324 11 521

9 MON.TSAHILGAAN HOLBOO 129,351,380,000 3,353,558 13 209

10 BAYANGOL ZB 13,538,080,000 3,294,527 14 13

11 MONGOL SHILTGEEN 12,500,000,000 9,830,946 15 517

12 ULSIIN IKH DELGUUR 12,514,669,000 2,851,976 16 484

13 BDSEC 34,000,000,000 2,256,376 19 522

14 MAKH IMPEX 10,261,946,700 1,773,069 20 208

15 MONINJBAR 3,872,092,852 3,987,444 22 25

16 SPIRT BAL BURAM 10,568,691,000 980,714 22 46

17 ULAANBAATAR ZB 9,690,083,300 608,453 24 3

18 EERMEL 5,566,912,000 378,473 25 191

19 APU 14,114,663,000 317,171 27 90

20 MATERIALIMPEX 2,668,001,700 2,406,425 29 379

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 re-placed with: Jenco Tour Bureau, BDSec, Shariin Gol, APU, Ulaanbaatar ZB, while 15 other companies remained in the Index basket.

32


TOP-20 INDEX IN 2007 (Daily)

Month 1 2 3 4 5 6 7 8 9 10 11 12

Day

1 2,161.93 2,467.24 2,910.40 8,213.07 11,692.68 10,449.58

2 2,031.88 2,148.82 2,493.67 3,027.24 2,876.35 4,402.37 8,246.99 11,391.43 10,342.15

3 2,044.57 3,001.45 2,851.77 4,300.74 8,327.99 13,519.11 11,450.30 9,444.85

4 2,051.39 3,017.47 2,855.49 3,340.29 4,473.55 13,676.95 11,191.57 9,441.35

5 2,057.25 2,146.65 2,526.73 3,038.34 3,404.80 4,473.54 13,528.90 11,499.69 10,387.44 9,458.54

6 2,181.70 2,561.70 3,038.14 3,469.68 4,551.39 8,386.94 13,276.08 10,589.18 9,588.42

7 2,203.72 2,596.54 2,835.41 3,511.56 8,597.58 13,200.86 10,625.45 9,517.48

8 2,067.97 2,212.34 2,828.38 3,538.26 8,698.65 11,637.23 10,403.56

9 2,071.70 2,213.56 2,637.78 3,043.50 2,782.87 4,925.45 9,801.80 11,596.98 10,324.66

10 2,076.62 2,964.35 2,784.18 4,926.27 10,051.23 13,054.17 11,565.33 9,847.83

11 2,076.51 2,964.76 2,831.79 3,893.44 12,896.89 11,544.66 9,878.63

12 2,083.67 2,222.77 2,637.33 2,972.56 4,013.31 12,407.35 11,525.91 10,284.90 9,904.88

13 2,225.14 2,660.62 2,955.92 4,019.47 10,360.44 11,890.05 10,249.96 9,854.43

14 2,229.63 2,681.57 2,910.20 4,033.76 10,538.80 12,063.14 10,247.69 9,940.51

15 2,083.67 2,230.62 2,725.59 2,902.04 4,117.14 10,558.26 11,404.84 10,204.77

16 2,093.44 2,278.17 2,725.84 2,955.92 2,909.28 7,521.44 10,959.97 11,229.19 10,098.60

17 2,084.87 2,963.67 2,907.22 7,542.98 11,141.56 11,890.34 11,163.71 10,006.11

18 2,095.97 2,964.93 2,927.93 4,110.33 7,573.30 11,731.70 11,187.53 9,978.50

19 2,133.08 2,800.67 2,961.99 4,147.69 7,650.88 11,860.41 11,216.68 10,052.36 10,261.85

20 2,284.64 2,870.83 2,955.81 4,287.15 7,735.61 11,154.56 11,915.63 9,989.62 10,326.00

21 2,287.28 2,877.24 3,141.60 4,241.67 11,292.50 11,906.43 10,049.47 10,557.37

22 2,139.03 2,309.43 2,901.36 3,194.90 4,387.53 11,325.04 11,123.27 9,981.59

23 2,139.17 2,309.43 2,976.91 2,954.63 3,208.20 7,863.78 11,510.76 10,960.01 9,999.68

24 2,146.01 2,937.43 3,285.43 7,914.68 11,720.42 11,788.34 10,860.23 10,568.33

25 2,146.10 2,919.05 3,276.72 4,422.74 8,092.75 12,169.67 10,676.17 10,558.94

26 2,147.06 2,342.35 3,012.10 2,918.35 4,360.39 8,131.94 12,511.07 10,799.34 10,452.56

27 2,397.43 2,988.73 2,914.94 4,390.00 7,772.49 11,864.06 12,131.72 9,954.37 10,281.24

28 2,431.10 2,996.82 3,275.10 4,441.78 11,940.81 11,814.43 9,852.63 10,170.65

29 2,151.77 3,025.00 3,280.89 4,408.17 11,714.22 10,783.46 9,647.36 10,256.13

30 2,149.87 3,019.26 2,911.32 3,282.40 8,066.76 12,157.40 10,785.22 9,640.15

31 2,152.55 3,336.29 8,122.64 12,712.45 10,657.09

High 2152.55 2431.10 3025.00 3043.50 3336.29 4441.78 8131.94 12712.45 13676.95 11692.68 10625.45 10568.33

Low 2031.88 2146.65 2467.24 2911.32 2782.87 3340.29 4300.74 8213.07 11731.70 10657.09 9640.15 9441.35

Average 2101.10 2253.51 2770.65 2970.56 3017.17 4026.96 6633.82 10490.24 12461.66 11214.89 10160.72 10014.03


MEMBER CoMPaNIESLegislations and Rules application for membership Membership fee Member broker &

dealer companiesStock trading volume

of broker & dealer companiesContact information

34


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 stipu-lated 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 in-creased 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 req-uisite 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 agree-ment 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 Sold

Broker dealers company

Volume (thous. shares)

Value (MNT in

mln.)Rank Broker dealers company

Volume (thous. shares)

Value (MNT in mln.)

BDSEC 67,823.3 41,337.9 1 BDSEC 73,254.8 35,024.9

GLOBAL ASSET 2,803.8 6,225.5 2 DELGERKHANGAI 5,048.8 13,199.2

DELGERKHANGAI 7,208.4 3,395.6 3 WORLDKEY 2,272.1 3,266.6

WORLD KEY 2,112.1 2,186.0 4 ZERGED 17,886.4 1,587.6


35


ZERGED 18,227.2 1,357.4 5 BULGAN BROKER 1,782.6 1,321.6

DARKHAN BROKER 3,775.6 1,170.4 6 ARGAI BEST 770.8 1,023.7

KHANSH INVEST 1,496.3 1,110.6 7 DARKHAN BROKER 2,104.4 843.4

BATS 1,779.0 969.5 8 BATS 1,159.0 635.4

ALTAN SAN 1,715.5 791.5 9 MONSEC 555.4 530.0

ARGAI BEST 1,568.4 700.7 10 MERGEN SANAA 594.8 453.0

CHANDMANI BAYAN

1,891.7 596.7 11 GENDEX 552.3 440.1

GENDEX 664.6 588.0 12 CHANDMANI BAYAN 683.6 438.2

BULGAN BROKER 1,349.5 326.6 13 MONGOL SECURITIES 441.2 428.3

MERGEN SANAA 347.0 224.2 14 ERDENEST 543.7 325.2

MONSEC 646.8 223.8 15 TAVAN BOGD 157.7 273.2

MONGOL SECURITIES

542.4 197.9 16 MASDAQ 256.5 266.0

SANAR 382.5 115.4 17 KHANSH INVEST 363.7 260.6

ERDENEST 242.1 113.9 18 GLOBAL ASSET 93.0 197.8

MASDAQ 419.6 94.6 19 CCP 548.5 135.3

CCP 153.9 92.2 20 ALTAN SAN 86.0 133.4

BATS INVEST 238.2 73.3 21 UNDURKHAAN INVEST 98.3 110.8

TAVAN BOGD 300.4 60.6 22 ALTAN KHOROMSOG 88.4 108.8

FRONTIER 28.2 53.0 23 SANAR 163.4 94.3

ALTAN KHOROMSOG

160.5 50.0 24 NIKI 38.7 91.1

UNDURKHAAN INVEST

98.6 33.0 25 BATS INVEST 163.5 69.3

BLOOMSBURY 87.1 18.1 26 BUMBAT ALTAI 61.8 67.3

NIKI 31.1 12.2 27 MUNKHUD 207.6 61.9

BUMBAT ALTAI 9.5 7.6 28 BLOOMSBURY 4.8 1.6

MUNKHUD 0.7 0.4 29 FRONTIER 0.0 0.0

TOTAL 116,104 62,127 109,982.0 61,388.7

36


CoNtaCt INFoRMatIoN

NoBroker dealers

companyHead office

FaxTrading

floorDirector E-mail

1 AJNAI INVEST 345757 345656 313765 D.Munkhsaihan [email protected]

2ALTAN KHOROMSOG

455822 313648 T.Munkhur

3 ALTAN SAN 99118082 310683 TS.Tsend [email protected]

4 ARGAI BEST 99113297 313324 D.Aruinbold [email protected]

5 BATSINVEST 320773 343477 323774 L.Javzmaa

6 BATS 326042 - D.Batnasan [email protected]

7 BDSEC 321763 321763 313372 D.Dayanbilguun [email protected]

8 BLOOMSBURY 356060 310487 B. Myagmarsuren

9 BULGAN BROKER 322708 313323 N.Amgalan [email protected]

10 BUMBAT ALTAI 99431203 - O.Shirnedev

11 CHANDMANI BAYAN 95253102 313656 B.Batsaikhan

12 CCP 331754 - S. Gantulga [email protected]

13 DARKHAN BROKER 328970 - Sh.Dorjsuren

14DELGERKHANGAI SEC.

95252453 313235 M.Batorgil

15 ERDENEST 99356857 313301 A.Aruinsain

16 FRONTIER 70119999 99007069 Masateru Igata [email protected]

17 GENDEX 636335 632959 323807 B.Bathuyag

18 GLOBAL ASSET 320889 - Li Keong Guu

19 KHANSH INVEST 684596 321021 TS.Altanchimegkhansh_invest2004@

yahoo.com

20 MASDAQ 99881008 313327 V.Battulga [email protected]

21 MERGENSANAA 451626 311020 M.Tumurtugoo

22 MONGOL SEC. 95252719 462130 314518 Z.Nomundari [email protected]

23 MONSEC 91918840 313526 M.Otgonbaatarmonsecl182004@yahoo.

com

24 MUNKHUD 95256869 310547 G.Batmunkh

25 NIKI 324790 310510 U.Tuvshinjargal

26 SANAR 99098709 313634 B.Enkhbayar [email protected]

27 TAVAN BOGD 351210 313291 K.Aliya [email protected]

28UNDURKHAAN INVEST

682861 313311 N.Oyuntungalag

29 ZERGED 367609 313346 Sh.Erdene

30 WORLD KEY 330594 330594 313676 Ganzorig [email protected]


otHER aCtIVItIES oF MSE

Information centertraining centerSports competition Publications

38


INFoRMatIoN CENtER

In 30th March of 2005 MSE has established Information center in order to dissemi-nate 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, inter-views, 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 oper-ates 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 insti-tutes. 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 partici-pants of training course and seminars.

SPoRtS CoMPEtItIoN

Each year MSE organizes sport competition among member companies and secu-rities 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 bil-liard 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 MSEBrochures (annually, four kinds of brochures in Mongolian)

Detailed information and advices for share and bond issuers, investors and buyers of share and bondsNewspaper, 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 January 1Lunar Holiday February 17-19International Woman’s Day March 08Children’s day June 01Naadam National Festival July 11-13Independent Day November 26


39


StoCk PRICE tRENDS

2000 1 285.88 260.42 274.58 285.882 327.40 288.96 309.11 327.40

3 336.77 289.79 317.91 335.51

4 340.87 306.37 330.55 306.37

5 336.92 313.78 326.26 324.46

2000 6 338.13 315.43 329.88 330.01

7 364.54 331.02 339.49 364.54

8 418.76 358.13 390.78 396.88

9 448.85 409.45 425.91 435.68

10 468.05 425.12 446.97 460.49

11 506.31 459.64 488.96 469.93

2001 1 521.58 479.84 514.17 497.09

2 526.15 492.30 526.15 506.20

3 578.33 513.04 578.33 538.86

4 587.03 541.75 585.20 565.25

5 631.05 555.85 596.36 590.20

6 691.75 579.92 691.75 605.54

7 687.52 592.97 656.31 634.62

8 764.13 646.11 764.13 682.41

9 779.67 673.44 682.05 712.77

10 916.81 684.65 789.86 773.65

11 958.91 783.80 850.83 853.87

12 962.97 757.82 814.02 845.28

2002 1 962.97 757.82 814.02 845.28

2 946.51 809.14 946.51 876.50

3 1125.64 877.65 1096.75 1040.86

4 1307.45 958.13 1142.42 1127.01

5 1362.88 975.62 1257.84 1183.43

6 1296.42 1131.24 1143.80 1226.41

7 1237.10 948.40 1119.86 1112.20

8 1330.13 968.15 1165.38 1183.47

9 1348.33 1062.21 1244.53 1154.05

10 1450.39 1163.14 1167.08 1296.76

11 1257.90 983.76 1105.04 1149.08

12 1128.02 803.68 933.93 1025.82

2003 1 1045.45 824.50 824.74 919.37

2 952.89 755.43 853.95 887.22

3 990.57 675.15 870.88 839.61

4 894.92 757.96 783.77 816.43

5 887.63 723.08 783.20 770.11

6 846.21 727.82 834.73 800.38

7 841.51 743.94 750.20 776.03

8 907.25 617.67 907.25 703.18

9 851.49 577.60 596.31 737.93

10 723.56 541.84 589.64 604.23

11 755.43 568.84 732.08 665.07

40


12 910.79 587.88 895.90 740.69

2004 1 886.06 754.55 837.33 849.85

2 816.72 682.95 682.95 726.59

3 910.7 711.33 802.25 774.93

4 795.37 567.51 610.01 652.15

5 699.61 507.00 604.38 641.87

6 712.42 491.62 492.1 609.24

7 691.87 499.66 629.54 594.15

8 746.5 611.66 619.26 669.68

9 770.08 606.42 619.99 707.36

10 837.37 477.6 757.1 571.41

11 858.72 485.44 666.16 623.03

12 682.13 506.54 585.69 590.68

2005 1 791.47 502.15 601.06 631.14

2 675.4 554.59 675.4 593.96

3 888.07 636.91 865.09 705.96

4 859.69 600.91 777.79 738.15

5 964.22 672.57 815.04 771.69

6 936.73 692.57 692.57 802.33

7 852.93 658.95 680.34 712.86

8 924.91 696.65 770.33 777.46

9 849.28 760.79 836.8 813.63

10 1043.83 843.67 852.44 963.35

11 1048.23 947.72 970.59 1003.21

12 1053.01 955.92 1019.20 995.29

2006 1 1081.03 988.04 1,006.69 1020.14

2 1144.12 1019.71 1,103.37 1077.00

3 1105.37 1054.47 1,095.39 1085.91

4 1117.77 1082.45 1,108.11 1093.26

5 1197.56 1099.63 1,184.37 1147.85

6 1185.39 1166.34 1,168.75 1176.57

7 1171.63 1164.41 1,169.36 1169.23

8 1199.58 1169.36 1,199.58 1178.06

9 1411.29 1272.00 1,410.73 1351.02

10 1665.98 1419.31 1,665.98 1514.27

11 1811.26 1687.30 1,809.07 1772.37

12 2030.81 1755.03 2,030.81 1867.99

2007 1 2152.55 2031.88 2,152.55 2101.10

2 2431.10 2146.65 2,431.10 2253.51

3 3025.00 2467.24 3,019.26 2770.65

4 3043.50 2911.32 2,911.32 2970.65

5 3336.29 2782.87 3,336.29 3017.17

6 4441.78 3340.29 4,408.17 4026.96

7 8131.94 4300.74 8,122.64 6633.82

8 12712.45 8213.07 12,712.45 10490.24

9 13676.95 11731.70 11,814.43 12461.66

10 11692.68 10657.09 10,657.09 11214.89

11 10625.45 9640.15 9,640.15 10160.7212 10568.33 9441.35 10,256.13 10014.03

Documents

Mongolian Stock Exchange -2007 english