The Ministry of Finance recommended the privatization of the Mongolian Stock Exchange (MSE) in their draft of the 2017 budget, proposing a 20 billion MNT price tag.
Last week, Minister of Finance B.Choijilsuren stated that the government would be forced to privatize state-owned companies if operations are not improved, as a reported 70 percent of state run companies have revenue deficits.
The value of the MSE was determined to be 5.45 billion MNT earlier this year, with circulating capital of 913.6 million MNT and fixed assets valued at 3.95 billion MNT. As of the first six months of 2016, the MSE had a revenue deficit of 613.2 million MNT. The revenue loss of the MSE was 956 million MNT in 2014 and 236.1 million MNT in 2015.
Some economists say the reason for the decline in revenue and the increase in costs can be attributed to the Millennium Exchange system, an “ultra low-latency” trading platform that the MSE implemented in July 2012.
The Ministry of Finance also recommended the privatization of five other state-owned companies. The ministry had previously recommended the privatization of the MSE back in 2014. The plan in 2014 was for the government to own 34 percent of the MSE and to offer the remaining 66 percent to private investors. For this year’s recommendation, the ministry has endorsed full privatization.