In East Asia Mongolia is a landlocked sovereign state which is bordered by china to south and Russia to the north. Mongolia is separated from Kazakhstan by only 36.76 KM while it does not share a border with Kazakhstan. Mongolia has 18th largest country in the world which has 3 million of people. The area of the country is covered by mountains to west and north. Mongolia has very little arable land which means most of area is covered by grassy steppe. Ulaanbaatar is the capital of the country which is also known as largest city in the country. Almost 30 percent of the population is semi-nomadic and nomadic. Various kind of majority lives in Mongolia like, Buddhists, Islamic, Tuvans, Kazakhs and many others as well. In 1997 for the better economic development of the country Mongolia has joined the World Trade Organization (WTO).
How to invest in Mongolia with brokerages
In the above introduction it is clearly stated that Mongolia is second largest landlocked sovereign state in the world. The growth of Mongolian Stock Exchange rapidly growing since 2010; MSE was world best performer in stock market in the same year which has increment of 121 percent. While investing in Mongolian stock exchange one should know the rule and regulations of Mongolian trade; although one can open a brokerage account in the country without visiting there. Before opening a brokerage account one should learn about the Mongolian securities clearing house and central depository (SCHCD). If you want to go Mongolia then you need to open a bank account in the country. You can open account with trade and development bank, Golomt, or khan bank, always remember that every country has different rules, regulations and barriers to opening bank accounts. For those who are not travelling to Mongolia can seek exposure in Mongolian ResCap, Mongolian CD market, in conjunction with Origo partners. Finding the right broker in Mongolia is not easy. The best way to make a list of facilities which you want from broker, below some important tips you can consider.
Always check if there is sub clause or clause for minimum trade. There are many banks in Mongolia which offers 3-in 1 with saving accounts; while some banks have rules for minimum balance.
Always consider the fees and commissions which are charged by the broking companies. Also understand the facilities which are offered by them.
Research reports: Research service also offered by full service brokerages. This particular research allow to investors to read reports on sectors of interest or companies. You can also access the company data on websites which will help to take better decisions on selling and buying the stocks.
Before investing in Mongolia always look for customer online reviews portal where you can find some useful information about the brokerage companies.
If you are planning to go Mongolia then visit office to talk to executive, also check the office location, registration number, polices, rules and regulations etc.
Considerations and caveats
You need to understand some points before investing like, MSE is illiquid, lots of patience is required while accumulating shares and limited orders are obligatory. MSE opens two hours per day while London stock exchange helping to manage transition, like, better corporate governance and electronic trading etc. each company which is listed in MSE is limited to moving a maximum of 15% up or down in a day. You can visit the website of brokerage firm and talk to them. While connecting with them you must consider some things which are listed below.
How must they are responsive for phone calls or emails
Quality of research which is provided by them
What are their policies on recommending, consulting or advising you about the stocks?
Are they the right firm for you and how much money you are going to invest with them?
All these questions are very important for you while investing in Mongolia with brokerages, however in the world MSE was one of the best performing stock market which has 136% returns in 2010; while many companies going up 200 percent in the same year. For the better investment you can consider Agro’s bond which is known as first corporate bond. The main purpose of issuing the bond is to increase the production amount of meat. You can also consider resource investment capital and BDSec JSC Company for opening a trade account or invest in Mongolia, both the companies is well established in the Mongolian stock exchange which can provide you best meetings.