|A young team of the first Mongolian professional investment company Ard Financial Group JSC, led by a well-known economist and banker Mr. Ganhuyag Chuluun (founder of XacBank), is successfully managing the wealth of its 700+ shareholders by undertaking aggressive investment activities that resulted in double digit growth. We spoke to the Investor relations officer Mr. Tamir Bilegt on how Mongolian citizens can invest and benefit from their savings.|
Before we talk about the recent developments at your company, I would like to introduce you to our readers. Although you haven’t been working for long at Ard Financial Group, last week you have been appointed as CEO of Investor Nation JSC. Congratulations.
Thank you. First of all, I would like to convey my best regards and summer’s greetings to all your readers and your staff. Thank you for your interest in our company and invitation to speak about our activities. My name is Tamir Bilegt, I am a graduate of the Institute of Finance and Economics, majoring in Banking and Finance Administration. As a student I did my internship at XacBank and ever since, I admired and respected Mr. Ganhuyag’s management style. At the end of 2015, the Investor Nation’s crowd-funding initiative on Facebook caught my attention and I approached Mr. Gankhuyag asking if I can be part of this new initiative. Luckily, my job application was accepted and since then I am a happy and proud member of the Ard family. In my opinion, the Ard Financial Group, probably the first Mongolian professional investment company, has several advantages: it has a very young and dynamic, yet very competent team, whom the management opens up genuine growth opportunities, motivates and prizes strong performance and achievements. For example, last week the company distributed its shares as performance bonuses to the employees. I became a shareholder too. By doing so, the company began to realize a decision of the Ard Financial Group’s Board Meeting held on March 31st to grant 10 percent of the company shares to the employees in the course of the next 4 years. My position of an Investor Relations Officer is not yet common in Mongolia. Thus, in the past 6 months, I was learning by doing, making sure that the expectations of our shareholders are met, information is disclosed, and new investments continue to flow in. I am grateful that my efforts were useful and I’m honored that our management appointed me as a new CEO of the Investor Nation during the last Board meeting. For the future, I am planning to work closely with the Board members to ensure that the investment of over 700 shareholders of the Investor Nation JSC are well managed. I reiterate, I will continue my efforts in explaining to all interested parties the benefits of engaging in the capital market.
Ard Financial Group recently has been very active, publicly informing about all its progress. Please tell us about your recent accomplishments and ongoing projects. How are these contributing to the Mongolian economy?
In January this year, the Investor Nation crowdfunding project on Facebook has been officialized and a closed joint stock company was established. We organized our shareholders using Chinggis Khan’s “Aravt” system (groupping our investors in tens, hundreds etc.) and democratically elected our Board members. By investing in financial instruments such as government bonds, Mongol Post JSC shares, we achieved 60% growth in equity value as of May 26th. A historical decision was made att our latest Board meeting: to merge Investor Nation JSC and Jinst Uvs JSC with the objective to get listed on the Mongolian Stock Exchange (subject to ratification by the shareholders of Investor Nation JSC and Jinst Uvs JSC). As for Ard Financial Group, we increased our share at Ard Insurance LLC from 55 percent to 85 percent by concluding mutually beneficial deals with minority shareholders. In addition, we acquired one of the first Mongolian stock brokerage companies Altan Horomsog, which has 21 years of trading history. We filed an application to the Financial Regulatory Commission to merge Altan Horomsog and our stock brokerage company Ard Securities. As a result, the Ard Securities will become one of the largest Mongolian stock brokerage companies with more than 46,000 customers. Apart from this, we are working on establishing two investment funds – the first Mongolian public pension fund and a private investment fund “EIT”, which will be managing the non-financial sector assets. Last week the Association of Rural Microfinance Development of Mongolia has succesfully organized its biannual national conference, where the executives of more than 100 CSCooperatives from all over Mongolia decided to expand the scope of the Association.
All of our actions are aimed at rejuvenating the Mongolian capital market so that the citizens (our retail shareholders) will start receiving real economic benefits. People are shifting from being consumers to become asset owners. This is a tremendous change that will affect the economy in the long run.
People generally do not have enough knowledge about the capital market and shares. However, the Investor Nation JSC managed to raise funds from 700+ people. As we know, at first the leverage was for people to jointly participate in the privatiosation of the former printing house building and land. What other advantages of your company attract potential investors?
I believe that 1,400+ retail and institutional investors of both Ard Financial Group and Investor Nation JSC are attracted to our historical average annual return on investment of 140-705 percent for our past investments. In addition, the effective management team and transparent governance practices boost confidence of our investors. As part of our information disclosure policy, each year we disseminate the annual reports to our shareholders, as well publish the quarterly reports online. The ultimate mission of our company is to establish a truly national, publicly owned bank. Potential large national institutional investors as well as retail investors are highly attracted to this idea.
Mission of the Investor Nation JSC is to establish a bank. Undoubtedly, the leadership of Mr. Ganhuyag Chuluun, founder of XacBank, now one of the top 4 national banks, will succeed. However, the 3 million Mongolian citizens already have 14 commercial banks. What will be the competitive advantage of your bank? Are you planning to establish a bank through crowd funding?
Yes, this will be a revolution in the banking sector, true democratization of a bank as a financial institution. We all use banks in our everyday lives: to make transactions, obtain loans; make deposits to our saving accounts. On the other hand, the banking sector is the most stable and profitable industry indeed. Then why the regular citizens, bank customers cannot benefit from banking operations? This is what we are calling a true democratization of the banking sector. We are confident that we will reach our goal of establishing a bank that is owned by the citizens. Public support and encouragement gives us an immense motivation to pursue our goal. Our new bank will become a true FinTech institution that offers the most innovative services and products. This will be a complete new bank that does not have numerous branches and ATMs, but mobilizes the existing infrastructure that we possess.
Investor Nation JSC is planning to get listed on the Mongolian Stock Exchange through a merger with Jinst Uvs JSC. Thus it will become the first Mongolian publicly traded professional investment company. Recently you have announced that the selling price per share is set at MNT 1,250, and that you decreased the minimum investment size from MNT 1 million to MNT 300,000. Since the Mongolian Government proposed to purchase the 30 percent of the 1,072 Erdenes Tavan Tolgoi JSC shares distributed to every Mongolian citizen for MNT 300,000, probably a lot of people will be interested in investing in Ard Financial Group. What would you advise to them?
We believe that the citizens should embrace this possibility and make the most out of their share of the national treasure. Since Erdenes Tavan Tolgoi JSC shares are purchased with a buy-back option, our advice would be not spend the cash on the market by purchasing goods and services, because it will boost inflation and negatively affect the economy. Instead, we are encouraging the citizens to consider re-investment of these monies into active enterprises, like ours, and grow their wealth.
Investor Nation JSC is now a minority shareholder of the Mongol Post JSC. Also I heard that you are planning to invest in Ard Insurance LLC. It means that the Mongolian consumers will now become the stakeholders of the company, services of which they use on a daily basis. How will these shareholders benefit from these assets?
We are not planning to distribute any dividends to our shareholders. We are trying to introduce the system of highly developed capital markets, where shareholders yield the profits from the increase of share value. Economically it is more rewarding to shareholders compared to receiving dividends. Thus, the value of our shareholders’ investment will increase when the profitability and valuation of these companies will increase. Recently we were invited by the Mongol Post JSC to contribute to the formulation of their Business Plan for 2017. In addition, we introduced to the Mongol Post management an innovative global addressing system originated from Great Britain called “what3words”. Implementation of this technology in Mongolia will provide an address to every nomadic household scattered throughout our cast country of ours. This will enable them to receive public services, post and parcels with no hassle. The major international publications (Forbes, The Guardian, Foreign Policy, ABC News, Cnet, Quartz etc.) are writing about Mongolia becoming the first country to provide a unique address to every household. The Forbes magazine technology editors will visit Mongolia to write up a cover story on the launch of the Mongolian version of the “what3words” technology, planned on July 1st. The Ard Financial Group sees the Mongol Post JSC as a strategic investment; therefore we are working towards increasing our share ownership via negotiating with other private shareholders.
A company like yours, representing interests of hundreds of people, surely has a corporate social responsibility practice in place?
Definitely. We continuously acknowledge our responsibility before the society. As implementation of this we initiate various cultural, sports and humanitarian events, and support other’s initiatives. We are proud that Mongolian Paraolympic athletes, successfully competing in domestic and international tournaments, are members of our staff. Every year at the Mother and child’s day we visit the special secondary school no. 29 for disabled children to give out presents and donations. In terms of sport, for many years we are supporters of children’s futsal competition “Duulian 2020” and national wrestling tournament “Chingeltei mountain grace”.
What are your future plans?
First of all, we are striving to process requests from 200+ citizens, who sold their Erdenes Tavan Tolgoi JSC 322 shares for MNT 300,000 and want to re-invest in Ard Financial Group and Investor Nation JSC without any hassle and delay. Our brokerage company Ard Securities is working together with other large brokerage companies to come up with a simple solution. Currently, Ard Financial Group is negotiating with 3 large potential investors, who would like to secure Board seats, which requires minimum 10% share ownership. In order to contribute to the public financial education we are planning to produce series of video lectures on how to participate in the capital market and how to benefit from shares. These lectures will be also available as info graphics. This fall we will organize a large business forum and fair under the “Investor Nation” brand, scalable to the Mongolian Economic Forum. Adding to this, we will activate our latest initiative – the “IPO Club”, which we see as a platform for Mongolian capital market players and interested parties to share information and come up with joint proposals and solutions. Of course, our biggest task is to get Investor Nation JSC listed on the Mongolian Stock Exchange and ring the bell.
Looks like you have a lot on your plate. Thank you for a detailed interview. Good luck in your endeavors.
Thank you. Good luck to Mongol Post. Stronger. Together.