“Capital Market-Key to Development” conference which invited representatives from Mongolian financial market, government and half-government industrial organizations took place yesterday at the Foreign Ministry. It was the first conference which called representatives from bond, insurance organizations.
The meeting was attended by Vice Minister for Finance T.Ochirkhuu, Mongol bank president L.Purevdorj, director of Financial Regulation Bureau D.Bayarsaikhan and director of Government Property Bureau D.Sugar.
Prime Minister S.Batbold said the bond in the market is equal to 2.3 percent of the GDP was too little. Financial market is based on capital market and cash market. But the capital market is almost left over in Mongolian economy as 95-96 percent of total investments are cash markets. These markets must be 50:50. S.Batbold urged to raise the proportion of capital market by 2-3 times next year.
In order to make it possible, better legal condition must be created as well as training professionals in the sector.
Director of Mongolian Stock Exchange R.Sodkhuu said most marketable stocks must be available to the investors. Furthermore, high speed network and most developed infrastructure should be compounded as well as raising the knowledge of the people.
Director of Eurasia Capital Company Marat Yutegenov said only about 100 of the 360 companies registered in Mongolian stock exchange had audits. But only two of them were audited by famous international companies while the information regarding the rest is very poor.
“If we really want to develop the sector, company knowledge about finances must be improved” he added.
Participants also said the state owned factories have political burdens. There are about 90 state owned organizations in infrastructural field. This year 72.7 percent of them worked with losses. The representatives said it was because the Government does limit the prices of their products. Director of Shivee Ovoo Mine Kh.Balsandorj told the PM that the operation of these companies should be independent from political affairs.
