Crisis-Hit Mongolia Has an Unlikely Investment Winner
- Copper rallying on supply risks, Trump infrastructure plans
- Probable IMF program not fully priced in: AllianceBernstein
Dump trucks operate in an open pit at the Oyu Tolgoi copper-gold mine, jointly owned by Rio Tinto Group's Turquoise Hill Resources Ltd. unit and state-owned Erdenes Oyu Tolgoi LLC, in Khanbogd, the South Gobi desert, Mongolia, on Saturday, July 23, 2016. Mongolia exported 817,000 tons of copper concentrate in the first half of the year compared with 663,800 tons a year earlier, an increase of 23.1 percent.
Photographer: Taylor Weidman/BloombergWith a shrinking economy, ballooning budget deficit and debt downgrades, Mongolia wasn’t an obvious place to put your money last year. But a rebound in copper and the prospect of an IMF rescue package has turned the country’s dollar bonds into an investment winner.
The notes returned 1.5 percent in the three months through Thursday, the most among nine Asian markets, according to JPMorgan Chase & Co. indexes. The price of copper, which accounts for around a third of Mongolian exports, is up 20 percent over the period amid supply risks and signs U.S. President Donald Trump will ramp up infrastructure spending.