The macroeconomic environment in Mongolia is charging forward once again on the back of rising export revenue and improved current account. As a result the tugrik is fairly stable, sovereign dollar spreads are tight, and with ongoing investment in export capacity and growing underlying export volume exports we continue to expect further macro gains ahead.

The main source of downside risk, of course, is China - Mongolia's sole export market - as the ongoing construction and property shakeout raises the potential for macro volatility. On balance, however, we believe that property woes will have only limited impact on mainland demand for Mongolian coal and copper, as we have already seen in the past couple of years.

We remain invested in Mongolian equities and dollar credit on the back of medium-term structural growth prospects.