A conference on "Key issues of the capital market development" was held between senior officials of the state owned companies, insurance and securities organizations. During the conference a study on capital market made by over 10 lawyers of the National Institute of Legislation was presented. Its findings says that the Law on Securities is not clear, lacking specific provisions and incapable of regulating market progress. Many problems, creating big hindrance in the development of the capital market, were revealed and detected such as unrealistic source of information and lack of human resource.
Once again, Mr.L.Tseveenravdan, the President of the Mongolian Securities Traders Association shares his opinion on the challenging issues. Q: Capital market relays on trust. But this trust is lost. What would you say about it? L.Tseveenravdan: Yes, in some extent, it is lost. Shares issued in last two years were poorly traded and with much disputes, such as Hermes and Anod Bank shares. There were few good shares offered including Remicon, but it is sold by only 75% of its face value. Q: Was it affected by the financial crisis? L.Tseveenravdan: No, it wasn't. it was because of poor management of listed companies. In other words, they lack of announcements, reports and distributing their dividend. Also shares of listed companies are collected by few traders and investors. Therefore, small traders and investors lost their interest. Q: Can this gathered shares phenomenon be limited? L.Tseveenravdan: Once it is sold, it can't be. But we should pay attention on the further steps and issuance. Transparency is lost when few people own majority of shares. Q: There was discussion about offering Baganuur and Shivee-Ovoo shares of state owned mines at the Mongolian Stock Exchange. Is it possible? L.Tseveenravdan: Possible, over 50 broker dealer and underwriter companies are ready for it. Over 40 of them have trader seat at MSE. Remaining 10 companies are waiting for mining companies to be listed. Broker and dealer companies are passive in trading, but conducting market study and research on foreign and domestic environment and index. Q: What is your opinion on Anod and Zoos Bank shares? L.Tseveenravdan: State considers bankruptcy of Anod Bank. Actually, irresponsible actions of state organizations and agencies played big role to create such a situation. Officially, Central Bank should have permit the Financial Regulatory Commission on Anod Bank IPO. Also last eight months' financial report should have reported. With absence of such actions, FRC allowed Anod Bank start its IPO based on illegal notification of the Central Bank. Anod share, worth of ₮20 billion, sold out in two days. Without flexible interaction and synchronization of state organizations, people and shareholders suffer the loss originated by shares with poor quality. | 
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