Frontier Securities
Frontier Financial Markets Summary
Dear subscribers,
 
Enclosed please find your Frontier financial markets summary for  August 2, 2010 featuring latest Bank of Mongolia summary of first half of 2010.
As always, if  you have any feedback, suggestions or comments  that you would like share with us please drop me a line at da@frontier.mn
 
 
BOM:
 
MNT CONTINUES TO APPRECIATE,
 
OFFICIAL RESERVES HIT RECORD 1.22B USD,
 
UB INFLATION -16.2%YTD,12.5%YOY
 


According to 2010 H1 summary published by Bank of Mongolia on July 30,2010
 
EXHANGE RATE
 
Exchange rate at the end of H1 became 1386.65 MNT  and depreciate by 2MNT from Q1 and appreciate yoy by 67MNT. Average rate of USD in June of 2010 was 1380.33MNT


NET FOREIGN AND DOMESTIC ASSETS
 
Foreign net assets grew 90.8% or 857 billion MNT yoy, 24.9% or 359.4 billion MNY qoq and reached 1.8 trillion MNT, domestic  assets grew 15.2% or 227.4 billion MNT yoy, 12.4% or 189.8 billion MNT qoq and reached 1.72 trillion MNT.  From standpoint of money supply allocation, 51.1% of total money is in foreign net assets, 48.9 % is domestic net assets.
 
FX NET OFFICIAL RESERVES
 
FX net official reserves grew 89.9% or 581.8 million USD yoy,11.1% or 122.4 million USD and reached 1.22 billion USD equal to 23.4 weeks or 5.9 months of import.
 
Legend:
FX NET OFFICIAL RESERVES in millions of USD(left axis) (as of Q2 of every year)
Light blue column - FX NET OFFICIAL RESERVES
Dark blue line – reserves sufficient for weeks of imports (right axis)
 
PRICES
 
According to information of National Statistics Office nationwide prices of consumer goods and services in Q2 of 2010 rose respectively 3.7 % compared to Q1, 11.4%YTD, 11.4%YOY, in UB 6.9% in Q2, 16.2% YTD an 12.6%YOY. Base inflation calculated using consumer price index rose 0.8% compared to Q1, 3.0% YTD and 6.1%YOY. 6.9% rise in UB CPI was mainly influenced by 13.8% growth in goods and services in foodstuffs and beverages group and 4.1% growth in residential, water, power and fuel group.

Legend:
Inflation
Light blue columns – changes in prices of mutton
Dark blue columns – changes in prices of beef
Black line – UB inflation (left axis)
 
MONEY MARKET
 
In June of 2010 there was in total 134.8 billion MNT worth transactions in interbank market trading and 34.9% were loans issued by condition repo, 31.2% was secondary trading of CBB, 22.0% was interbank savings deposits, 6.7% overnight loans, 5.3% interbank loans. Weighted average annual interest rate of this trading was 10.42%, the interest rate declined 4.6% yoy but rose 3.2% qoq.
 
 
By Dale Choi(Erdenedalai Choinkhor), Editor/Analyst,  da@frontier.mn
 
(Source: BoM, logo of BoM, charts from BoM website, exchange rate chart by Dale Choi, photo of BoM building from news.mn)
 
Frontier Securities
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Frontier Securities based in Ulaanbaatar, Mongolia  is a Mongolia’s first boutique investment bank working to provide clients with best of both worlds: a local investment bank with full cross border service capabilities and international financial markets expertise with particular strengths in Asian financial markets of Hong Kong, Tokyo and Singapore. Please take a look at our Website http://www.frontier.mn/
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