John Polomny's  Instablog

John Polomny
Send Message
John Polomny is an individual investor and speculator seeking unique, overlooked, and well researched opportunities and speculations from all over the world.
My company:
My blog:
  • Mongolia To Provide Subsidized Mortgages 5 comments
    Jun 17, 2013 10:59 AM | about stocks: MNGGF


    Mongolia's central bank plans to cut interest rates on mortgages by almost half to 8 percent from around 15 percent this month, following a new policy approved by the government to ease financial burdens on the middle class.

    The new mortgages require a down payment of 10 percent to 30 percent and must be paid back in 20 years, the Bank of Mongolia's Chief Economist Sandagdorj Bold said yesterday in a telephone interview. The loans are valid for apartments smaller than 80 square meters (861 square feet), qualified applicants must have a full-time job, and monthly payments cannot exceed 45 percent of the family income, he said. The policy goes into effect on June 17.

    Mongolia is experiencing double-digit growth and new job opportunities in the mining industry and its supply chain are building a middle class that is in need of housing. The strongest demand is in Ulaanbaatar, where half the city residents live in unplanned neighborhoods called "ger districts," which lack infrastructure such as running water and central heating.

    "The intended purpose is to support the middle class and support the long-term sustainable economic growth by increasing the savings of the middle class," said Bold, adding that the 8 percent figure is meant to track the Bank of Mongolia's target rate for inflation. "It can vary plus or minus one percent depending on performance of the inflation."

    I am against this from a political and ethical standpoint but it will benefit the real estate market in Mongolia longer term. Although these are exactly the types of schemes that help create bubbles. Should be helpful to Mongolia Growth Group down the line as the entire real estate market will increase in value as people begin borrowing for homes and apartments.

    Disclosure: I am long OTCPK:MNGGF.

    Stocks: MNGGF
Back To John Polomny's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (5)
Track new comments
  • MSE.Investor
    , contributor
    Comments (90) | Send Message
    Great timing :)
    19 Jun 2013, 10:37 PM Reply Like
  • John Polomny
    , contributor
    Comments (609) | Send Message
    Author’s reply » Hmm, isnt there an election in Mongolia in the next few days? LOL.
    20 Jun 2013, 08:31 AM Reply Like
  • MSE.Investor
    , contributor
    Comments (90) | Send Message
    Didn't some plan for a celebration tomorrow ? :)
    20 Jun 2013, 10:33 AM Reply Like
  • John Polomny
    , contributor
    Comments (609) | Send Message
    Author’s reply » Are you referring to another rumor of concentrate shipments from Oyu Tolgoi. I am not commenting until it is confirmed by a minimum of 10 reputable independent sources including copies of the weigh tickets at the border crossing!
    20 Jun 2013, 11:01 AM Reply Like
  • MSE.Investor
    , contributor
    Comments (90) | Send Message
    :) Exactly.



    A classic in Mongolia.


    Now what is interesting is some kind of issues related to:
    "The event on June 14 had been postponed due to a demand from the government that Rio Tinto keep all export revenue in Mongolia, Prime Minister Norov Altankhuyag said earlier this week."



    Some are assuming that behind this is a tax related problem linked to using some offshore entities (which would be covered anyway in the agreement)
    or some are flagging something else:
    " "If the delay comes down to where cash proceeds from sales are held, you can understand why this is an issue (for investors), given the government of Mongolia"s recent history of freezing bank accounts," he added."


    Why would it be so critical for OT's cash to be held in local Mongolian banks?
    One may wonder, really...


    21 Jun 2013, 01:40 AM Reply Like
Full index of posts »
Latest Followers


More »

Latest Comments

Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.