Source: The Mongolian Mining Journal   Date: May 26, 2010

Mr. D.Achit-Erdene, President of the Mongolian International Capital Corporation, feels a decision on whether to collaborate with the Hong Kong or the Frankfurt Stock Exchange should come only after enforcing here the information disclosure requirements that have already been standardized worldwide.  In general, the accounting system followed by Mongolian companies is very poor. “The language of business is said to be accounting and there is no conversation between a domestic company and an investor” in Mongolia, he says. Certain “essential facet of corporate governance and financial transparency” are not practiced by many companies here and he calls this “the biggest obstacle to the development of our stock exchange and attracting investment”.

He blames this lack on Mongolia’s limited experience with the market economy, while in the West it has for long been part of life. Similarly, the present dearth of enough Mongolians with the skills to help develop the capital markets is also a result of history. “If there is an opportunity, foreigners will come to work here,” he feels. Once the capital markets evolve, Mongolians will learn from foreigners and gradually local professionals will emerge. The problem will be in the state organizations which approve the regulations and coordinate their observance. With salaries low there, it will be difficult to find good professionals.