Mongolia: 2010-2020 OutlookMongolia: 2010-2020 Outlook

Summary

? Mongolia: Massive Resources

? Mongolia 2010: Start of Multi-Year Bull Market

? Mongolia: Today and in 2020

? Growth Drivers

? Similar Growth Stories:

Kazakhstan

Qatar

? Conclusions2

3Mongolia: overview

? Land Area: 1.56m sq.km(50% size of India)

? Population: 2.7m(lowest density in the world)

? Capital: Ulaanbaatar

? Religion: 95% Buddhism

? Literacy rate: 97.8%

? Language: Khalka Mongol

? Currency: Mongolian Togrog (MNT)

? Political System: Democracy

? GDP (2010): $6.6bn

? GDP per capita: $2,400

? GDP est 2025: $60bn

? GDP growth (2010-25): c.20% pa

? GDP per capita (2025): $20,000

Source: National Statistics Office of Mongolia

6.6 7.78.9 10.2

12.315.3

19.1

23.7

28.0

31.935.1

0

5

10

15

20

25

30

35

40

2010 2011f 2012f 2013f 2014f 2015f 2016f 2017f 2018f 2019f 2020f

GDP, US$bn (LHS)

4

Mongolia: economic growth

10 largest deposits worth US$1.3tn

Source: Temasek

GDP Growth

Source: Eurasia Capital estimates

Fast growing economy

Drivers of growth: investment, demand for resources and commodity prices

Large scale production starting at Oyu Tolgoi, Tavan Tolgoi and other mines

GDP forecast to grow 10x to $60bn by 2025

Best Performing Market

5

MSE Top-20 up 138% in 2010, best performing market globally

MNT +12.9% vs USD in 2010, second best performing currency globally

5,500

6,500

7,500

8,500

9,500

10,500

11,500

12,500

4-Ja

n18

-Jan

1-Fe

b15

-Feb

1-M

ar15

-Mar

29-M

ar12

-Apr

26-A

pr10

-May

24-M

ay7-

Jun

21-J

un5-

Jul

19-J

ul2-

Aug

16-A

ug30

-Aug

MSE Top-20 index

Source: MSE Source: Bank of Mongolia

1290

1310

1330

1350

1370

1390

1410

1430

1450

1470

1490 MNT vs USD

Mongolia - Saudi Arabia of Mining

6

Coal from Mongolia to China is happening. It is expanding,probably doubling every two years, Tom Albanese, CEO,Rio Tinto

The country is incredibly resource rich, another SaudiArabia, next to the largest population in the world,Mongolia could be the Saudi Arabia of Asia Mark Faber,Emerging markets investor

I expect frontier markets, like Mongolia, will continue tohave very compelling investment opportunities over thenext year and beyond. Mark Mobius, Chairman,Templeton Emerging Markets

7Mongolia in 2010 and 2020

GDP, US$bn

GDP per capita, US$

MSE Mkt Cap, US$bn

2020

6.6355x

18% per year

2,450 10,000

1 20

MNT/US$ rate 1,300?900?

2010

Bank Assets, US$bn 2.82.8 2525

4x

20x

9x

+30%

82010 2020

Copper

Iron ore

Coal

600,000 tn peryear

3.5m tn per year 12m tn per year

17m tn per year 100m tn per year

1.5m tn per year

Gold5tn per year 50tn per year

Crude Oil0.3m tn per year 4m tn per year

Source: Eurasia Capital estimates

Commodity Output

9Growth Story I: Kazakhstan

GDP, US$bn

GDP per capita, US$

KASE MrktCap,US$bn

2007

25 1054.2x

1,250 6,750

1.2 70*

Banking assets, US$bn

Property, $/m2

370

2002

3,700

88 9797

5.5x

10x

58x

12x

* $100bn 2008

residential

retail

land

400 8,00020x

50x1,000 50,000

10

Growth Story II: Qatar

GDP, US$bn

GDP per capita, US$

Qatar SE MktCap,US$bn

2010

1011111x or22% p.a.

15,000 82,000

4 104

Banking assets, US$bn

Population, mn 0.6

1998

1.7

1111 133133

5.5x

2.8x

27x

12x

Conclusions

Fastest growing economy in next decade (2010-2020)

11

Economy

Investments, exports, wealth creationDrivers

Mining, banking, property, consumerIndustries

All asset classes, esp. local public equitiesOpportunities

Democracy, political stability, pro-business governmentEnvironment

Right Place and Right Time to Invest!MONGOLIA

12

? Eurasia Capital is a Hong Kong-based pan-regional investment bankwith strong presence and focus in frontier markets in Eurasia

? Strong focus on Mongolia and Central Asia

? Team of 30 professionals with five offices in the region

? Pan-regional team provides full-fledged advisory and brokerage servicesto resource companies, private equity groups and hedge funds

? Advises on cross-border M&As and strategic investments in resourcessector

Eurasia Capital

13

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