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http://zgm.mn/post/1412/

Ruling party sends 2019 Monetary Policy Guidelines for final discussion

​DP faction leaves session over SME Development Fund scandal​

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http://zgm.mn/post/1412/


Parliament’s plenary session began with a protest of the Democratic Party (DP) faction yesterday. The DP members hung up banners, declaring not to attend plenary sessions and standing committee meetings until the MPs involved in SME Development Fund scandal are ousted and left the session. Without the DP faction, the remaining Parliament members held the first discussion on 2019 Monetary Policy Guidelines, during which the Governor of Bank of Mongolia (BoM) Bayartsaikhan Nadmid informed that the bank has injected USD 720 million into the foreign exchange (FX) market so far this year and is planning USD 1 billion currency intervention before the end of 2018. This is expected to reduce the weakening MNT rate at about 5 percent fluctuation. “The Law on Currency Regulation, which is currently under discussion by the Parliament, includes an article that states transactions of Oyu Tolgoi and other private entities that has stability agreement with the Government shall be made through BoM accounts. The approval of the bill will help grow FX reserves,” addressed Mr. Bayartsaikhan.

The Parliament members further touched upon eight percent mortgage loan program, highlighting that the mortgage loan repayments currently stand at 98 percent from total outstanding loans. The related standing committee noted the low accessibility of mortgage loan in 2017-2018 and suggested to increase the program financing in 2019. In turn, the Governor of the BoM Bayartsaikhan noted the difficulty for the BoM to independently settle the mortgage loan issue and reminded that the International Monetary Fund suggested to transfer the management of mortgage program to the Government starting from January 2019. He also highlighted that the BoM is currently making an effort in further reducing commercial bank lending rate, which was recently lowered from 21 percent to 17.8. Additionally, the BoM is operating under MNT 3 trillion deficit and Mr. Bayartsaikhan informed that the only measure of maintaining the balance is to issue Government securities and bonds; however, considering the current situation, he announced that the BoM will repay its debt from operational revenue.

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70 children become victims to cancer every year in Mongolia

One out of four children suffering from cancer are dying at early age in Mongolia

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An 18-months old baby was delivered to his second surgery table just recently. Diagnosed with a rare type of cancer that the country is unable to treat, the infant was sent abroad in hopes that better medical care and equipment would save this brave little heart.

Witnessing the cruelty of the world since birth, this tiny sprout cannot even express the amount of agony he is in. Unfortunately, hundreds of children are suffering from the same illness, struggling to get the better of the excruciating pain. For them, the Pediatric Cancer Hospital of the National Center for Maternal and Child Health (NCMCH) is the only home they know. Some are receiving radiation therapy and some are on surgery beds. It is heart-wrenching to even imagine how much pain they are in.

Up until now, we understood that cancer was an illness for only the elders. But the situation is different now. We can see that cancer is a threat to everyone including infants.

At the NCMCH, 60 infants were diagnosed with cancers in 2016. But the number of cancer discovery among newborns increased to 70 last year. Adding the children that are currently being treated, nearly 700 children are suffering from cancer as of today. The number is constantly on the rise without decreasing. As miserable as it is, the country does not have a single study on the cause of this growing number of pediatric cancer.

“The cause of 95 percent of pediatric cancer remain undiscovered. The remaining five percent are due to genetic mutations, in other words hereditary. The rise in cancer victims is driven by two factors. First, improving diagnosis. We now can discover multiple types of cancer with modern medicine. Secondly, the increasing number of illness that is following the evolution of society,” explained a spokesperson of the NCMCH.

The global rate of successful pediatric cancer treatment is currently at 80 percent. But the rate stands at 75 percent for Mongolia. This means that one out of four children are departing this world at the very starting point.

“Although we cannot ascertain the root of the cause, there are assumptions. For example, it could be a numerous virus or the vulnerability after a common cold could inflict the tumor. Due to the lack of official studies, we cannot be sure whether if air pollution is another source or not. But it is definitely slowing the process of treatment,” said an oncologist at the NCMCH.

It is obvious that there are many factors at play for cancer. But it would not be false to say air pollution is the root of all the potential risks. Troubled by the actual danger among children, another doctor remarked, “I am worried about the newborns. Because they have a very high chance of becoming victims of cancer in just a few years. Although it is not proven scientifically, there is a high chance that this probability could be real.”

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Khurelbaatar Chimed: 319 entities drew loans from two funds

Total losses of three key funds total MNT 395.3 billion

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Minister of Finance Khurelbaatar Chimed held a press conference after the Cabinet meeting yesterday to disclose the results of investigations on state-owned funds, which was conducted following the disclosure of Small and Medium-sized Enterprise Development Fund scandal. However, the finance minister refused full disclosure and postponed the matter onto the fourth week.

The investigations on special purpose funds have been completed weeks ago. But the Cabinet is refusing the reveal the information of loaners, assuring to present it next week. This was the third time the Cabinet postponed the results.

Mr. Khurelbaatar addressed, “There are cases where a single entity was granted loans from three different funds and there are a total of 319 private entities that have drawn loans from two funds. 

Many companies are overdue on repayment, but due to the fact that the Bank of Mongolia does not register the repayment of these funds, the reimbursement has been under a major delay. The overdue loans were reduced from the initial amount of MNT 130 billion to MNT 100 billion in the last one to two months.”

Since the establishment of the Farming Support Fund, over 16,000 entities have drawn loans two or more times. The minister explained that the majority of these were used to pay off previous debts. Further more, a request has been delivered to the Cabinet on dissolving some of these funds. Mr. Khurelbaatar then noted to provide details on the matter once the Cabinet reaches a decision.

Farming Support, Livestock Protection, and Employment Promotion funds granted MNT 938.8 billion worth loans to individuals and entities. As of 2017, the total loss amounted to MNT 395.3 billion. The minister suspects that the loaners may have saved the loans in commercial banks as the interest is lower than savings rates.







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Eight companies announce to disburse dividends so far

Roadshow for Ard Credit IPO to take place today

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Within the legal obligations, the Mongolian Stock Exchange (MSE)-listed firms are required to have announced the information regarding the dividends by today. As of today, eight companies have announced to distribute dividends.

For instance, Gobi JSC has informed to allocate MNT 5.3 billion, or MNT 6.8 per share from the net profits of 2018. The dividend is scheduled to be distributed starting from April 25, either via cash at the headquarter or via bank transfers. Last year, Gobi JSC distributed MNT 1.7 billion in dividends.

Mongol Basalt JSC will be oneyear- old since its IPO in May. The company, which offered 30 percent of its stake, announced to disburse MNT 56.4 million or MNT 1 per share from the net profits of 2018. Disclosure of dividend distribution within the first year after going public had a positive effect on the company’s stock as the price increased from MNT 250 per share to MNT 260 within a week.

Next on the list is Bayan Teeg JSC. The company, which is operating a coal business, is planning to allocate MNT 3,958.7 per share, which is the highest amount of dividend distribution as of today. The dividends will be administered by June 1.

Another public company in the same business field, Tavan Tolgoi JSC has announced its 2018 financial report. Within the financial year, the coal exporter earned a total of MNT 226.4 billion in sales revenue and MNT 52.6 billion in net profits, which is three times lower than the 2017 net profits. The board of Tavan Tolgoi disclosed to disburse MNT 998.7 per share. The company allocated MNT 2,410 per share last year.

A farming industry firm Khuvsgul Altan  Duulga JSC also announced to distribute MNT 1.88 billion, or MNT 120 per share in dividends this year. The company offered a seasoned issue last year and raised MNT 3.74 billion, doubling the number of shareholders, and its market capitalization reached MNT 16.1 billion.

Starting from May 1, a publicly- owned postal service provider Mongolian Post JSC will disburse MNT 468 million, or MNT 4.7 per share, while Talkh Chikher JSC announced to allocate MNT 204.7 million or MNT 200 per share from July 1. Next up is a national meat and meat products manufacturer Makh Impex JSC. The company is planning to administer MNT 456 million or MNT 120 per share in October 2019.

As of today, 305 public firms are listed at the Financial Regulatory Commission. As of the end of 2018, the market capitalization of the MSE stood at MNT 2.5 trillion, a 2.9 growth year over year.

Additionally, the second IPO of 2019 was announced recently. Ard Credit LLC, which operates a non-banking financial institution (NBFI) and has signed a deal with Mongolian Post JSC on delivery service, is planning to raise MNT 4.9- 5.4 billion at MNT 70-85 per share by offering 25 percent of its stake to built up a loan source. Half of the shares are being offered to strategic investors and the other half is for the public. The company announced a roadshow for its IPO at 6.30PM at Corporate Convention Center today.

As of today, a total of 539 NBFIs are operating in Mongolia. Net equity of the NBFIs totaled MNT 1.3 trillion last year, a 32.5 percent growth year over year.

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Parliament to discuss tax package next month

Stakeholders of business sectors discuss package bills on tax

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The Parliament is expected to discuss the package bills on taxes during the Spring session. Accordingly, the Ministry of Finance, General Tax Office, Mongolian National Chamber of Commerce and Industry (MNCCI), Confederation of Mongolian Trade Unions, and business representatives held a discussion on the package bills yesterday. At the meeting, MP Battumur Baagaa informed that the Parliament is planning to call an irregular session to discuss the bill next month.

Lkhagvajav Baatarjav, President of the MNCCI, addressed, “Business representatives held long discussions with the Ministry of Finance on the package bills. We believe that these laws are well-prepared for setting the foundation of a good tax system.”

Minister of Finance Khurelbaatar Chimed highlighted that the key changes in the package bills are the extension of the tax payment period from two months to 24 months, instant repayment of overpaid taxes, the improved authority of tax officials, prevention of investigation on no-risk taxpayers, annulment of the prescription period on tax evasions, and improved accountability of tax authorities.

“Within the frames of the bill, the Government will hold policy to support fair and responsible taxpayers and cut the costs of deductibles. We will take firm actions against tax evasions, avoidance, and unfair taxpayers, collecting full taxes in accordance with the law,” noted Mr. Khurelbaatar. The bill sets a fixed tax rate of 10 percent and entities with an annual income of MNT 50 million or lower will pay 1 percent tax and are required to submit a single financial report throughout the year. While the entities with an annual income of MNT 3 billion or lower are required to submit half-annual reports, the high-income firms are required to submit quarterly reports.

Key changes in the Corporate Income Tax include a reduction of 20 percent tax on the outbound transfer of income to 15 percent, 20 percent deductibles on dividends to foreigners to 5 percent, and 10 percent tax on bank-based financial sourcing to 5 percent.