Stock Exchange Trading Volume Slows Compared to Previous Weeks

Ulaanbaatar, May 20, 2026 /MONTSAME/. The National News Agency MONTSAME, in cooperation with MICC LLC (Mongolia International Capital Corporation), is delivering to its readers a weekly overview of Mongolia’s domestic capital market and economic developments.

Weekly Capital Market and Economic Overview

(2026.05.11–2026.05.18)

MONGOLIAN STOCK EXCHANGE

During the week, a total of 24.18 million securities worth MNT 13.64 billion were traded on the Mongolian Stock Exchange. Premium Nexus JSC, Khan Bank JSC, Tenger Insurance JSC, Invescore NBFI JSC, and APU JSC led the market in terms of trading value. A total of three block trades were executed during the period.

• 625,000 shares of Tenger Insurance JSC (TGI) were traded at MNT 800 per share, totaling MNT 500 million;
• 19 million shares of Premium Nexus JSC (CUMN) were traded at MNT 350 per share, totaling MNT 6.65 billion;
• 62,000 shares of Invescore NBFI JSC (INV) were traded at MNT 6,800 per share, totaling MNT 421 million.

Last week, the main indices of the Mongolian Stock Exchange closed lower, reflecting profit-taking following the previous recovery and growing market caution. The TOP-20 index declined by 0.33%, the MSE A index by 0.50%, and the MSE B index by 0.96%. The sharper drop in the MSE B index indicates stronger selling pressure on small-cap stocks. While large-cap stocks remained relatively stable, activity weakened in the small- and mid-cap segments, and trading volumes declined compared to previous weeks.

During this period, key topics influencing the economy and capital markets included the Government’s decision to establish a legal framework for the inheritance of 1,072 shares of “Erdenes Tavantolgoi” JSC, proposed amendments to tax laws, and discussions on increasing the use of external borrowing.

SECURITIES MARKET TURNOVER DOUBLES, PRIMARY MARKET DOMINATES

According to the National Statistics Office, total turnover in Mongolia’s securities market reached MNT 563.7 billion in the first four months of 2026, an increase of MNT 303.7 billion, or 2.2 times, compared to the same period last year.

Primary market trading accounted for 65.5% of total turnover, or MNT 369.2 billion, indicating that companies and institutions remain highly active in raising financing through the market. Secondary market turnover reached MNT 194.5 billion, showing a modest annual increase of 1.3%.

Key indicators:

• Total securities turnover: MNT 563.7 billion
• Annual increase: +MNT 303.7 billion (2.2x)
• Primary market: MNT 369.2 billion
• Secondary market: MNT 194.5 billion
• Securities traded: 185.6 million units (-39.0%)
• Market capitalization: MNT 13.4 trillion (+9.9%)

By structure, corporate bonds accounted for 47.1% of total trading, indicating continued strong demand for fixed-income instruments. Asset-backed securities made up 20.2%, corporate equities 16.8%, and government bonds 15.8%.

The total number of securities traded fell by 39% year-on-year to 185.6 million units, suggesting that market growth is being driven more by high-value transactions and primary market financing rather than trading volume. Liquidity growth in the secondary market remains relatively limited, indicating that broader market participation has yet to expand significantly.

In April 2026, the TOP-20 index reached 50,717 points, up year-on-year but down by 1,710 points from the previous month, reflecting a continued short-term correction following earlier gains. Total market capitalization rose to MNT 13.4 trillion, up 9.9% year-on-year but declining on a monthly basis.

INDUSTRIAL OUTPUT UP 54.1%: MINING CONTINUES TO LEAD GROWTH

According to preliminary data from the National Statistics Office, Mongolia’s total industrial output reached MNT 21.8 trillion in the first four months of 2026, marking a 54.1% increase year-on-year.

The mining and extractive industries were the primary drivers of growth, with output reaching MNT 18.4 trillion, up 67.5% compared to the same period last year.

Metal ore extraction doubled, increasing by MNT 6.0 trillion, while coal production rose by 25.6%, strongly supporting export revenues and industrial sales. Total industrial sales reached MNT 26.6 trillion, up 79.5% year-on-year, of which MNT 20.4 trillion came from mining exports.

Key highlights:

• Metal ore extraction doubled, boosting mining exports
• Industrial production volume index fell by 15.5%, indicating price-driven growth
• Growth in manufacturing remains relatively weak

At the product level, coal production increased by 54.8%, iron ore by 44.4%, iron ore concentrate by 49.3%, and copper concentrate by 29.6%, while production of crude oil, silver concentrate, and zinc concentrate declined.

In manufacturing, output of cement, cashmere products, and combed cashmere increased, while production of water, beverages, meat, and cathode copper decreased.

The industrial production volume index declined by 15.5% year-on-year, indicating that nominal growth is being strongly driven by high commodity prices. While the mining boom supports overall economic growth, it remains uneven across sectors.

Manufacturing growth stood at 8.4%, but declines in products such as beverages, meat, and cathode copper suggest that domestic consumption and non-mining sector recovery remain relatively weak. This is also reflected in the stock market, where consumer and manufacturing sector stocks continue to lag behind mining-related companies.

MONGOLBANK TO STRENGTHEN INDEPENDENCE AND ADVANCE BANKING REFORMS

Officials of the Bank of Mongolia outlined their positions on monetary policy, inflation, banking sector reforms, and macroeconomic risks, as well as near-term policy directions.

Amid rising inflationary pressures, the central bank is focusing on liberalizing the banking sector and strengthening its independence through legal reforms.

The Governor of the Bank of Mongolia, S. Narantsogt, noted that the central bank’s independence is currently assessed at 60%, or “insufficient,” and stated that amendments to the central bank law are being prepared to focus its core mandate on price stability. He also emphasized the need to limit quasi-fiscal programs financed through the central bank and improve coordination between fiscal and monetary policies.

Given that banks account for about 90% of Mongolia’s financial market, reforms are planned to increase competition and reduce ownership concentration. These include enabling foreign banks and international development institutions to become shareholders in Mongolian banks and creating a more open investment environment through amendments to the Banking Law.

According to the Bank of Mongolia, annual inflation reached 10.1% as of April, up 2.7 percentage points from the previous month. Of this increase, 2 percentage points were driven solely by rising prices of meat and fuel. Meat prices rose by 38% year-on-year, while fuel prices increased by 17%, making them the main contributors to inflation.

The policy rate remains at 12%. The central bank explained that inflation is largely supply-driven, and therefore, rather than responding with aggressive monetary tightening, it is focusing on managing second-round effects and inflation expectations. The public’s 12-month inflation expectations stand at 7.9%, below the current inflation rate.

The Bank of Mongolia has also begun exploring a gradual transition of the mortgage financing system to market principles, targeting the 6% concessional mortgage loans more narrowly while expanding market-based products with interest rates of 8–12%. At the same time, policies to protect foreign exchange reserves, curb imports, and support business lending remain in place.