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John Polomny is an individual investor and speculator seeking unique, overlooked, and well researched opportunities and speculations from all over the world.
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  • Mongolian Government Finally Getting More Investor Friendly 5 comments
    Oct 4, 2013 8:53 AM

    As we expected:

    Mongolia has passed a law aimed at reviving foreign investment by easing restrictions on investors in key sectors such as mining and by providing greater certainty on the taxes they must pay.

    The new regulations take effect on Nov 1 and replace two previous laws, including one that imposed restrictions on foreign investments in strategic sectors after state-owned Aluminum Corp of China (Chalco) made a bid to take control of Mongolia-focused coal miner SouthGobi Resources in 2012.

    Investors and analysts said the new law was a step in the right direction following more than a year of uncertainty over investment rules, which many blamed for a slump of 43 percent in overseas investment in the first half of 2013, on an annual basis.

    It remains to be seen if this and the recent change in board members and more positive tone of discussion regarding OT will lead to a change in investor perceptions. My expectation is that it will happen but over a period of time. The encouraging part of this is that now that the electioneering is over the ruling DP recognizes what needs to get done and understands the country's reliance on FDI. I think that these recent moves underscore that we may be near a bottom on the bad news and my expectation would be more positive news and a move higher in Mongolian related equities.

    One comment on Mongolian Growth Group. Nothing has really changed with the business but the share price has been weak and very volatile. It has not been uncommon to sees days where the price moves up or down 7-10%. My suspicion is that some bigger holders have been selling and this has been weighing on the stock and creating the price swings. I have been selectively buying shares and in some cases picked up shares at around $2.25. I expect positive news going forward for the company and the country as a whole and I think buyers at this level will not regret these prices in a few years.

    Disclosure: I am long OTCPK:MNGGF, TRQ.

    Themes: Mongolia
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Comments (5)
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  • roojoo
    , contributor
    Comments (124) | Send Message
     
    Hey John,
    as for MGG, do you believe there is any chance that the high volume selling happened with the sole intention to drive prices down? It surprised me that at certain days traded volume was 7x the daily average, and other days there was 0 traded volume. Most selling also happened around market close.

     

    If someone were to try and sell a large number of shares with the intention to get the best price, wouldn't he try to spread out the volume more evenly? Major selling also happened directly after the announcement of a 10m private placement that then had to be cancelled. Not sure why anyone would try and sabotage that and if that is what's actually happened, but the way shares were being dumped looked quite irrational to me.

     

    Was a good buying opportunity though as you said.
    6 Oct 2013, 12:18 AM Reply Like
  • John Polomny
    , contributor
    Comments (495) | Send Message
     
    Author’s reply » Some of the participants in the early private placements got in for under a dollar. Maybe they had a personal need for cash or just became frustrated with the politics of the country. Hard to say for sure but the selling pressure took its toll. The positive is that shares are moving from weaker to stronger hands.
    7 Oct 2013, 08:38 AM Reply Like
  • MSE.Investor
    , contributor
    Comments (93) | Send Message
     
    “Mongolian Government Finally Getting More Investor Friendly “

     

    Trying may be, but still far from doing the job as the USDMNT parity shows.

     

    Like it or not, OT is a template for foreign investors so a peace treaty is needed.

     

    Then the 106 licenses problem has to be fixed, otherwise any would-be-investor in Mongolia will have to for an in depth due diligence on any government official that has signed a contract the business is related too, which is not very practical and may cool down many.

     

    Politics:
    isn’t a government reshuffle on the map? May be time consuming?
    14 Oct 2013, 03:09 AM Reply Like
  • John Polomny
    , contributor
    Comments (495) | Send Message
     
    Author’s reply » I would agree but it appears that things are at least moving in the right direction. It will take time to repair the damage but a resolution to OT would go a long way in my view. I expect some resolution by year end.
    14 Oct 2013, 08:00 AM Reply Like
  • MSE.Investor
    , contributor
    Comments (93) | Send Message
     
    "right direction" ? Sure but it was a very low base. :)

     

    And foreign investors are not likely this time to settle for nice words, but real irreversible actions...

     

    Foul once..., foul me twice....
    14 Oct 2013, 09:01 AM Reply Like
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