Analysis of the dynamics of the Mongolian securities market

The study is devoted to the analysis of the securities market of Mongolia, namely its structure, current trends and development prospects. At this stage, Mongolia’s stock market is in its infancy and certainly represents an important component of the financial system. In 2023, it reached a record market capitalization, which amounted to more than 16.9% of the country’s GDP. Nevertheless, market liquidity remains low for the following reasons: firstly, due to the dominant position of several players, and secondly, due to high transaction costs for investors; Third, due to limited access to global markets. The liquidity of financial instruments on the Moscow Stock Exchange is also negatively affected by the weakness of institutions and the underdeveloped infrastructure of the national economy, excessive dependence on exports of goods and external restrictions. The following factors had a positive impact on the dynamics of the Mongolian stock market: lower deposit rates, reduced capital export opportunities abroad, and an increase in the number of IPOs in the banking sector. The vulnerability of Mongolia’s financial system to external shocks is related to monetary policy, which rapidly accelerates the growth of the financial market, but is unable to ensure it in the long term due to stimulating industrial effects. The study presents the dynamics of market indices, trading volume and capital structure, and concludes that it is important to create a diversified and liquid market that will contribute to the sustainable development of the entire economy. The presented research results prove the urgent need to change the rules and conditions of the financial sector in Mongolia. This is a necessary condition for the transformation of the securities market in order to financially support the ongoing industrialization in the country.