Financial Analysis of Oyu Tolgoi Presented to: OPPORTUNITIES & CHALLENGES: THE CHANGING FACE OF 21ST CENTURY MONGOLIA: AN INTERDISCIPLINARY INTERNATIONAL SYMPOSIUM (IDIS 2014)
ROE Less COE Spread Drives Performance of S&P 500John Rickmeier
The S&P 500 stock market average index has had a remarkable history of tracking the recovery in the return on equity (ROE) above the cost of equity (COE) for its average of 500 component companies. Each time ROE has risen above COE, a bull market occurred as the spread between ROE and COE widened toward 10%, as in the late 1990’s, years 2002 to 2007, and the latest recovery from 2009 to 2016.
Biogen Idec is a leading biotechnology firm that has experienced strong growth through niche pharmaceutical products. However, an analyst's model projects the stock is overvalued given limitations on sustained high growth rates as markets become saturated and competitors increase efforts. The model finds a 73% probability the stock is fairly priced between $180-300 but only 5.25% above $300. The analyst advises taking profits and waiting for new product approvals and guidance.
Draft Two:
This report looks at one approach to the standard scheduling problem by constructing a model for use by high schools and small colleges/universities. This iteration of the model builds up an integer programming optimization model, aiming to maximize credit hours following constraints: 1) required class hours per course-week; 2) instructor preference for teaching-free days; 3) restricting group-room assignments to Integer: (0,1); 4) restricting number of instructors per group-room to Integer:(0,1); and other constraints. The model searches through two thousand variable fields: 1) ten instructors; with potential to occupy: 2) eight group-room assignments; over 3) five potential course time slots per day; over five days each week – vis. 10 X 8 X 5 X 5. But the model has capability beyond the two thousand variables. For instance, if the system limits a department teaching hours to two time slots per day (or different days), the system could accommodate several departments to minimize scheduling conflicts while maximizing satisfaction for instructors and students.
This project uses the robust solver mechanism in OpenSolver, an open source project developed by Andrew Mason in the Department of Engineering Science at the University of Auckland. The standard solver issued with Microsoft Excel is limited to only 200 variable fields. The OpenSolver mechanism does not impose artificial limits to the number of potential variable fields.
This chart plots the 90-pay prior Moving Average price of Gold, 90-days prior to the Mongolian Tugrik spot price. In other words, it plots the average gold price from 180 to 90 pays prior of the day's gold price. The regression fit is perhaps too close to be coincidental, with an R-Value (Pearson Correlation) of 0.97 .
This document reviews options for Mongolia-based MCS-APB Tiger Brewery to dispose of or utilize brewers spent grains (BSG) in an economic and environmentally-friendly manner. It analyzes both minimal capital investment options like donating or composting BSG, as well as more capital-intensive options like installing biogas production infrastructure. The three most viable options are identified as: 1) Producing methane for energy recovery through anaerobic digestion, 2) Selling or donating BSG to livestock farmers, and 3) Installing a cogeneration facility to produce steam and electricity from BSG. Financial analysis of capital-intensive options like using BSG to produce steam/power
This document describes a Monte Carlo analysis of stakeholder interests in the Oyu Tolgoi minerals project in Mongolia. It constructs probabilistic models to forecast copper and gold prices, project revenue and cash flow over 35 years for the project. The analysis estimates the discounted cash flow and net present value for stakeholders, including the Government of Mongolia, Rio Tinto, and Turquoise Hill Resources. The models indicate the government will likely secure over 73% of projected cash flows from the project through royalties, taxes and equity.
This document provides economic projections for various commodities from 2015 to 2026, including changes in price, volume, export value, and other metrics. It includes projections for coal, copper concentrate, iron ore, crude oil, zinc ore, non-money gold, calcite, molybdenum, washed cashmere, combed cashmere, and total mineral contributions. For each commodity, it shows the projected annual percentage change in price and volume, as well as total export value. The projections contain values for mean price changes, standard deviation of price changes, and other statistical indicators.
ROE Less COE Spread Drives Performance of S&P 500John Rickmeier
The S&P 500 stock market average index has had a remarkable history of tracking the recovery in the return on equity (ROE) above the cost of equity (COE) for its average of 500 component companies. Each time ROE has risen above COE, a bull market occurred as the spread between ROE and COE widened toward 10%, as in the late 1990’s, years 2002 to 2007, and the latest recovery from 2009 to 2016.
Biogen Idec is a leading biotechnology firm that has experienced strong growth through niche pharmaceutical products. However, an analyst's model projects the stock is overvalued given limitations on sustained high growth rates as markets become saturated and competitors increase efforts. The model finds a 73% probability the stock is fairly priced between $180-300 but only 5.25% above $300. The analyst advises taking profits and waiting for new product approvals and guidance.
Draft Two:
This report looks at one approach to the standard scheduling problem by constructing a model for use by high schools and small colleges/universities. This iteration of the model builds up an integer programming optimization model, aiming to maximize credit hours following constraints: 1) required class hours per course-week; 2) instructor preference for teaching-free days; 3) restricting group-room assignments to Integer: (0,1); 4) restricting number of instructors per group-room to Integer:(0,1); and other constraints. The model searches through two thousand variable fields: 1) ten instructors; with potential to occupy: 2) eight group-room assignments; over 3) five potential course time slots per day; over five days each week – vis. 10 X 8 X 5 X 5. But the model has capability beyond the two thousand variables. For instance, if the system limits a department teaching hours to two time slots per day (or different days), the system could accommodate several departments to minimize scheduling conflicts while maximizing satisfaction for instructors and students.
This project uses the robust solver mechanism in OpenSolver, an open source project developed by Andrew Mason in the Department of Engineering Science at the University of Auckland. The standard solver issued with Microsoft Excel is limited to only 200 variable fields. The OpenSolver mechanism does not impose artificial limits to the number of potential variable fields.
This chart plots the 90-pay prior Moving Average price of Gold, 90-days prior to the Mongolian Tugrik spot price. In other words, it plots the average gold price from 180 to 90 pays prior of the day's gold price. The regression fit is perhaps too close to be coincidental, with an R-Value (Pearson Correlation) of 0.97 .
This document reviews options for Mongolia-based MCS-APB Tiger Brewery to dispose of or utilize brewers spent grains (BSG) in an economic and environmentally-friendly manner. It analyzes both minimal capital investment options like donating or composting BSG, as well as more capital-intensive options like installing biogas production infrastructure. The three most viable options are identified as: 1) Producing methane for energy recovery through anaerobic digestion, 2) Selling or donating BSG to livestock farmers, and 3) Installing a cogeneration facility to produce steam and electricity from BSG. Financial analysis of capital-intensive options like using BSG to produce steam/power
This document describes a Monte Carlo analysis of stakeholder interests in the Oyu Tolgoi minerals project in Mongolia. It constructs probabilistic models to forecast copper and gold prices, project revenue and cash flow over 35 years for the project. The analysis estimates the discounted cash flow and net present value for stakeholders, including the Government of Mongolia, Rio Tinto, and Turquoise Hill Resources. The models indicate the government will likely secure over 73% of projected cash flows from the project through royalties, taxes and equity.
This document provides economic projections for various commodities from 2015 to 2026, including changes in price, volume, export value, and other metrics. It includes projections for coal, copper concentrate, iron ore, crude oil, zinc ore, non-money gold, calcite, molybdenum, washed cashmere, combed cashmere, and total mineral contributions. For each commodity, it shows the projected annual percentage change in price and volume, as well as total export value. The projections contain values for mean price changes, standard deviation of price changes, and other statistical indicators.
Long-term iron-ore prices will be 30-40% higher than average industry forecasts of $75/t, largely due to depletion of existing iron-ore deposits. Three forecasting methods were used: marginal costs, global marginal incentive price, and big three marginal incentive price. All concluded prices will be $102-105/t by 2020, 30-40% above consensus. Depletion means new projects must supply 310Mt in 10 years to sustain production, but consensus forecasts do not account for this. Higher long-term prices are needed to incentivize the large investments required for new projects.
This document discusses strategic scenarios and decision points regarding crude-by-rail transportation. It begins by outlining key performance forces that could impact crude-by-rail's viability, including volatility in natural gas and oil pricing, regulations around crude oil exports, and safety regulations. It then presents a framework analyzing how different combinations of these forces could play out across three dimensions: crude oil exports, natural gas pricing, and safety regulations. Under this framework, 27 scenarios are possible, though not all are equally likely. The document concludes by suggesting stakeholders assess the highest probability and impact scenarios to focus on, such as one combining regulatory backlash and coal market recovery.
This document describes a stochastic volatility model built for the front month Brent oil futures contracts traded on the Intercontinental Exchange in London. It implements a multifactor stochastic volatility model using Bayesian Markov chain Monte Carlo methods. The model is used to forecast conditional volatility and moments, extract risk measures, and could enable option pricing. Summary statistics show the return data exhibits volatility clustering, fat tails, and is stationary.
This paper builds and implements stochastic volatility models for predicting volatility in the Brent oil futures market on the Intercontinental Commodity Exchange in London. Stochastic volatility models describe volatility as having its own stochastic process over time, allowing for applications in derivative pricing, risk assessment, and portfolio management. The paper estimates optimal stochastic volatility models using Bayesian Markov chain Monte Carlo methods and extracts conditional moments, forecasts future volatility, and evaluates model fit. Analysis of stochastic volatility models can provide insight into commodity market behavior and enable more accurate forecasts.
The document discusses forward-looking statements and provides disclaimers regarding reliance on third party information and securities offerings. It notes that certain statements could be considered forward-looking and no guarantee is made about expectations reflected in such statements. It also states that the presentation does not constitute an offer to sell securities.
Implementing an integrated architecture for IFRS9 and scenario-based expected credit loss (ECL) calculations. Key points:
1. An integrated solution is proposed that allows for both unconditional, simulation-based ECL estimates and conditional, scenario-based ECL estimates using the same underlying models and architecture.
2. An integrated logical architecture is described that includes modules for credit cycle modeling, probability of default (PD), loss given default (LGD) and exposure at default (EAD) forecasting, ECL forecasting, and scenario forecasting.
3. The architecture leverages existing Basel PD/LGD/EAD models and allows for both batch processing and integrated stress testing and I
3.4 – "Natural Gas – Conventional & Unconventional Gas Sources" – Jakub Sieme...Pomcert
The document discusses conventional and unconventional natural gas sources and forecasts for future natural gas supply and demand. It summarizes projections from organizations like IGU and IEA that see global gas demand increasing from around 3 trillion cubic meters in 2008 to 4.4-4.9 trillion cubic meters by 2030. Unconventional gas sources like shale gas are expected to play a larger role, particularly in the US where production of unconventional gas could meet 45% of demand by 2035. Infrastructure like pipelines will also need to expand to accommodate increased gas trade and supply security.
TIL is one of the oldest construction equipment suppliers in India. Rising infrastructure spending and private capital expenditure are expected to boost demand for construction equipment. Total infrastructure and industrial capex is projected to grow at a CAGR of 13% from FY2010 to FY2012. TIL is well positioned to capitalize on growth opportunities, with the ability to leverage its long experience and product alliances. The report estimates TIL will register a CAGR of 31% in revenues and 24% in profits from FY2010 to FY2012. At current price levels, TIL stock is trading at an attractive valuation.
The study is based on a detailed analysis of 303 major mining companies that operated between 1980 and 2009. From this it estimated that in 2009 the world’s minerals industry generated $800 billion in sales, $100 billion in profits and paid $75 billion in direct taxes (excluding royalties and import duties).
The study shows that industry returns are very volatile, with changes of +/-30% not uncommon – driven by fluctuations in commodity prices. During the period 1980-2000 the industry generated an average return on capital no better than investing in US Government Bonds. This situation has improved in the last five years, due to the rising prices caused by strong demand from China.
Another characteristic is that the industry is very capital-intensive and spends most of its profits on growing the business. Consequently, Governments need to be mindful that increasing taxes during boom-times may be counter-productive … and may kill the golden goose.
4. Global X ASX Investor Day 2022.pptxWANG YINGJIE
This document provides a summary of a presentation on three investment themes: electric vehicles, decarbonization, and robotics/AI. It notes that predicting the future is difficult, but investing requires predicting themes that will impact the future. The presentation discusses how each theme is reaching an inflection point and identifies related risks like potential lithium supply constraints that could slow electric vehicle adoption. Investment opportunities in materials and technologies supporting these themes are also examined.
- Industrial demand for silver is forecast to grow significantly over the next five years, increasing from 487 million ounces in 2010 to 666 million ounces in 2015.
- Strong economic growth in developing countries like China and India has been a major driver of increased industrial silver demand over the past decade.
- While global economic growth is expected to slow in 2011, it is forecast to gradually increase over 2012-2015, supporting ongoing growth in industrial silver usage.
- Higher silver prices are expected to encourage some substitution away from silver in certain industrial applications, but silver's unique properties limit alternatives and substitution will be a long-term process.
Sensitivity of Ireland’s potential carbon budget pathways with varying social...IEA-ETSAP
Sensitivity of Ireland’s potential carbon budget pathways with varying social discount rates in an energy system optimization model
Mr. Jason Mc Guire, UCC
Strong first-quarter earnings growth positions the company for success in 2013. The company improved adjusted EBIT by $34 million in Q1 2013 and expects full-year adjusted EBIT to grow by at least $100 million. Upside to the outlook will depend on the pace of the US housing recovery and its impact on building materials margins. Owens Corning composites is positioned for improved returns as the glass fiber market grows and capacity utilization tightens due to rebuilding needs in China.
NGO data manipulation of financial markets?
Everywhere data has been manipulated to suite or fit
the Greenpeace & Co 100% WindSolar UTOPIA?
Not 1 word on Methane 10,000 billion tons of Gas? Puts long term large Green Energy investment decisions into an unforeseeable level of risk, as the go no go or careful timing for these very capital intensive investments in the long term, is suddenly unimaginable or non existing 4 the investor = Not a word Not 1 in Carbon Tracker?
Growing demand for high performance, light weight materials in automotive and aerospace industries is expected to remain a key driving factor for the global carbon fiber reinforced plastics (CFRP) market.
For More Information Visit - http://www.grandviewresearch.com/industry-analysis/carbon-fiber-market
Belo Sun Corporate Presentation March 2014 Websitebelosunhelia
This corporate presentation from Belo Sun Mining Corporation provides information on its Volta Grande gold project in Brazil. Key points include:
- Volta Grande is described as the largest developing gold project in Brazil, with over 5 million ounces of gold in the measured and indicated resource categories.
- A preliminary economic assessment is underway and will be released in stages, evaluating opportunities for expanding production and reducing costs over the 21-year mine life.
- Belo Sun has an experienced management team and board with decades of experience developing mining projects in Brazil.
- The project is located near infrastructure in a mining-friendly jurisdiction, and has potential for further resource expansion on additional targets on the large land package.
$11.00
$3.00
$4.00
$5.00
$2.00
$37.80
Total Operating Cost
$62.80
Capital Cost (Note 2)
$Million
Mine Equipment
Crushing & Screening Plant
Rail Infrastructure
Rail Yard
General Infrastructure
Contingency
$15.0
$15.0
$30.0
$10.0
$15.0
$11.6
Total Capital Cost
$96.6
Century Iron Mines Corporation
1) Century Iron Mines Corporation presented information on its iron ore projects and financial
This document compares the strategies of ArcelorMittal and Tata Steel, two major steel companies. It analyzes their corporate strategies, including geographical presence, acquisitions vs organic growth, vertical integration, and portfolio management. It also examines the macro environment of the steel industry using PESTLE analysis and discusses factors like cyclical demand, capacity utilization, costs, trade, and regulations that influence industry strategies. Finally, it provides a SWOT analysis and compares the key strategies of the two companies, such as ArcelorMittal's focus on acquisitions and mining and Tata Steel's emphasis on branding and new product development.
Ras Laffan is constructing LNG facilities in Qatar to supply Korea Gas (Kogas) under a long term contract. Broadway is considering investing in Ras Laffan's project finance bonds. The summary analyzes the bonds and recommends:
1) Initially investing in the 2006 bond which has moderate risk and return outweighs risks.
2) Negotiating a higher return if investing in the higher risk 2014 bond due to longer maturity.
3) Not investing in both bonds due to lack of diversification and higher overall risk exposure.
- Magnesita is moving forward with vertical integration of raw materials through expansion of M-30 sinter production and exploitation of graphite deposits. This will increase competitiveness by reducing reliance on imported materials facing price pressures.
- The company continued its global expansion of the CPP refractory solutions model, adding new contracts in various regions. This positions Magnesita as the sole provider of CPP services worldwide.
- Despite challenges in 3Q2010 like currency impacts, revenues and profitability remained stable due to the company's balanced portfolio and high vertical integration.
Beharry, Lyndon Mw: Oyu Tolgoi article appears on page 251 (247 in the PDF file)
International Minerals Processing Conference Ulaanbaatar Mongolia 2016
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Long-term iron-ore prices will be 30-40% higher than average industry forecasts of $75/t, largely due to depletion of existing iron-ore deposits. Three forecasting methods were used: marginal costs, global marginal incentive price, and big three marginal incentive price. All concluded prices will be $102-105/t by 2020, 30-40% above consensus. Depletion means new projects must supply 310Mt in 10 years to sustain production, but consensus forecasts do not account for this. Higher long-term prices are needed to incentivize the large investments required for new projects.
This document discusses strategic scenarios and decision points regarding crude-by-rail transportation. It begins by outlining key performance forces that could impact crude-by-rail's viability, including volatility in natural gas and oil pricing, regulations around crude oil exports, and safety regulations. It then presents a framework analyzing how different combinations of these forces could play out across three dimensions: crude oil exports, natural gas pricing, and safety regulations. Under this framework, 27 scenarios are possible, though not all are equally likely. The document concludes by suggesting stakeholders assess the highest probability and impact scenarios to focus on, such as one combining regulatory backlash and coal market recovery.
This document describes a stochastic volatility model built for the front month Brent oil futures contracts traded on the Intercontinental Exchange in London. It implements a multifactor stochastic volatility model using Bayesian Markov chain Monte Carlo methods. The model is used to forecast conditional volatility and moments, extract risk measures, and could enable option pricing. Summary statistics show the return data exhibits volatility clustering, fat tails, and is stationary.
This paper builds and implements stochastic volatility models for predicting volatility in the Brent oil futures market on the Intercontinental Commodity Exchange in London. Stochastic volatility models describe volatility as having its own stochastic process over time, allowing for applications in derivative pricing, risk assessment, and portfolio management. The paper estimates optimal stochastic volatility models using Bayesian Markov chain Monte Carlo methods and extracts conditional moments, forecasts future volatility, and evaluates model fit. Analysis of stochastic volatility models can provide insight into commodity market behavior and enable more accurate forecasts.
The document discusses forward-looking statements and provides disclaimers regarding reliance on third party information and securities offerings. It notes that certain statements could be considered forward-looking and no guarantee is made about expectations reflected in such statements. It also states that the presentation does not constitute an offer to sell securities.
Implementing an integrated architecture for IFRS9 and scenario-based expected credit loss (ECL) calculations. Key points:
1. An integrated solution is proposed that allows for both unconditional, simulation-based ECL estimates and conditional, scenario-based ECL estimates using the same underlying models and architecture.
2. An integrated logical architecture is described that includes modules for credit cycle modeling, probability of default (PD), loss given default (LGD) and exposure at default (EAD) forecasting, ECL forecasting, and scenario forecasting.
3. The architecture leverages existing Basel PD/LGD/EAD models and allows for both batch processing and integrated stress testing and I
3.4 – "Natural Gas – Conventional & Unconventional Gas Sources" – Jakub Sieme...Pomcert
The document discusses conventional and unconventional natural gas sources and forecasts for future natural gas supply and demand. It summarizes projections from organizations like IGU and IEA that see global gas demand increasing from around 3 trillion cubic meters in 2008 to 4.4-4.9 trillion cubic meters by 2030. Unconventional gas sources like shale gas are expected to play a larger role, particularly in the US where production of unconventional gas could meet 45% of demand by 2035. Infrastructure like pipelines will also need to expand to accommodate increased gas trade and supply security.
TIL is one of the oldest construction equipment suppliers in India. Rising infrastructure spending and private capital expenditure are expected to boost demand for construction equipment. Total infrastructure and industrial capex is projected to grow at a CAGR of 13% from FY2010 to FY2012. TIL is well positioned to capitalize on growth opportunities, with the ability to leverage its long experience and product alliances. The report estimates TIL will register a CAGR of 31% in revenues and 24% in profits from FY2010 to FY2012. At current price levels, TIL stock is trading at an attractive valuation.
The study is based on a detailed analysis of 303 major mining companies that operated between 1980 and 2009. From this it estimated that in 2009 the world’s minerals industry generated $800 billion in sales, $100 billion in profits and paid $75 billion in direct taxes (excluding royalties and import duties).
The study shows that industry returns are very volatile, with changes of +/-30% not uncommon – driven by fluctuations in commodity prices. During the period 1980-2000 the industry generated an average return on capital no better than investing in US Government Bonds. This situation has improved in the last five years, due to the rising prices caused by strong demand from China.
Another characteristic is that the industry is very capital-intensive and spends most of its profits on growing the business. Consequently, Governments need to be mindful that increasing taxes during boom-times may be counter-productive … and may kill the golden goose.
4. Global X ASX Investor Day 2022.pptxWANG YINGJIE
This document provides a summary of a presentation on three investment themes: electric vehicles, decarbonization, and robotics/AI. It notes that predicting the future is difficult, but investing requires predicting themes that will impact the future. The presentation discusses how each theme is reaching an inflection point and identifies related risks like potential lithium supply constraints that could slow electric vehicle adoption. Investment opportunities in materials and technologies supporting these themes are also examined.
- Industrial demand for silver is forecast to grow significantly over the next five years, increasing from 487 million ounces in 2010 to 666 million ounces in 2015.
- Strong economic growth in developing countries like China and India has been a major driver of increased industrial silver demand over the past decade.
- While global economic growth is expected to slow in 2011, it is forecast to gradually increase over 2012-2015, supporting ongoing growth in industrial silver usage.
- Higher silver prices are expected to encourage some substitution away from silver in certain industrial applications, but silver's unique properties limit alternatives and substitution will be a long-term process.
Sensitivity of Ireland’s potential carbon budget pathways with varying social...IEA-ETSAP
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Strong first-quarter earnings growth positions the company for success in 2013. The company improved adjusted EBIT by $34 million in Q1 2013 and expects full-year adjusted EBIT to grow by at least $100 million. Upside to the outlook will depend on the pace of the US housing recovery and its impact on building materials margins. Owens Corning composites is positioned for improved returns as the glass fiber market grows and capacity utilization tightens due to rebuilding needs in China.
NGO data manipulation of financial markets?
Everywhere data has been manipulated to suite or fit
the Greenpeace & Co 100% WindSolar UTOPIA?
Not 1 word on Methane 10,000 billion tons of Gas? Puts long term large Green Energy investment decisions into an unforeseeable level of risk, as the go no go or careful timing for these very capital intensive investments in the long term, is suddenly unimaginable or non existing 4 the investor = Not a word Not 1 in Carbon Tracker?
Growing demand for high performance, light weight materials in automotive and aerospace industries is expected to remain a key driving factor for the global carbon fiber reinforced plastics (CFRP) market.
For More Information Visit - http://www.grandviewresearch.com/industry-analysis/carbon-fiber-market
Belo Sun Corporate Presentation March 2014 Websitebelosunhelia
This corporate presentation from Belo Sun Mining Corporation provides information on its Volta Grande gold project in Brazil. Key points include:
- Volta Grande is described as the largest developing gold project in Brazil, with over 5 million ounces of gold in the measured and indicated resource categories.
- A preliminary economic assessment is underway and will be released in stages, evaluating opportunities for expanding production and reducing costs over the 21-year mine life.
- Belo Sun has an experienced management team and board with decades of experience developing mining projects in Brazil.
- The project is located near infrastructure in a mining-friendly jurisdiction, and has potential for further resource expansion on additional targets on the large land package.
$11.00
$3.00
$4.00
$5.00
$2.00
$37.80
Total Operating Cost
$62.80
Capital Cost (Note 2)
$Million
Mine Equipment
Crushing & Screening Plant
Rail Infrastructure
Rail Yard
General Infrastructure
Contingency
$15.0
$15.0
$30.0
$10.0
$15.0
$11.6
Total Capital Cost
$96.6
Century Iron Mines Corporation
1) Century Iron Mines Corporation presented information on its iron ore projects and financial
This document compares the strategies of ArcelorMittal and Tata Steel, two major steel companies. It analyzes their corporate strategies, including geographical presence, acquisitions vs organic growth, vertical integration, and portfolio management. It also examines the macro environment of the steel industry using PESTLE analysis and discusses factors like cyclical demand, capacity utilization, costs, trade, and regulations that influence industry strategies. Finally, it provides a SWOT analysis and compares the key strategies of the two companies, such as ArcelorMittal's focus on acquisitions and mining and Tata Steel's emphasis on branding and new product development.
Ras Laffan is constructing LNG facilities in Qatar to supply Korea Gas (Kogas) under a long term contract. Broadway is considering investing in Ras Laffan's project finance bonds. The summary analyzes the bonds and recommends:
1) Initially investing in the 2006 bond which has moderate risk and return outweighs risks.
2) Negotiating a higher return if investing in the higher risk 2014 bond due to longer maturity.
3) Not investing in both bonds due to lack of diversification and higher overall risk exposure.
- Magnesita is moving forward with vertical integration of raw materials through expansion of M-30 sinter production and exploitation of graphite deposits. This will increase competitiveness by reducing reliance on imported materials facing price pressures.
- The company continued its global expansion of the CPP refractory solutions model, adding new contracts in various regions. This positions Magnesita as the sole provider of CPP services worldwide.
- Despite challenges in 3Q2010 like currency impacts, revenues and profitability remained stable due to the company's balanced portfolio and high vertical integration.
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Beharry, Lyndon Mw: Oyu Tolgoi article appears on page 251 (247 in the PDF file)
International Minerals Processing Conference Ulaanbaatar Mongolia 2016
Lancaster Colony Corporation is one of my favorite equities: Stable, stable, stable.
Lancaster Colony is my *GoTo* example for teaching Corporate Finance. In my limited estimation, Lancaster is one of the few, most visible publicly-traded American companies boasting clean financials, little or no debt, excellent corporate governance, and a balanced executive pay schedule. You cannot get more wholesome than Lancaster. The very name suggests Amish lifestyle, thrift and savings, and quality home-spun products. I've been following Lancaster since I was an MBA candidate in 1995.
I updated my Excel Monte Carlo valuation workbook with Lancaster financials since 2018 to provide a more current Equity Value range. But this conservative analysis propels the firm's pro-forma at a mere 0.00% growth rate in revenue - so it is a low-ball estimate based on the close of books June 30, 2021. I expect LANC will release its 2022 10K late in the week beginning Monday 22 August 2022. Once I review the more current financials, I will complete a valuation with an alternative growth schedule.
Lancaster Colony is based in Ohio, a state with poison pill legislation within the State Code. Lancaster is also closely held and thinly traded. Hence, LANC is virtually immune from hostile takeover.
2022-07-28
I present the final draft of my professional valuation of Lockheed Martin Corporation Equity per Share. I spent some hours cleaning up the prose (mostly light editing). I checked the citations, added "C-5" to Lockheed's notable creations, and worked to tighten up the grammar. As always, subsequent readings will inevitably reveal typographical and grammatical errors, but in general, this report is complete.
I welcome any suggestions or complaints. Feedback always helps me improve my writing and my analysis.
(I will be transitioning to work on a write-up on Gilead Sciences starting next week. From time to time I like to brush up on my biochemistry, molecular biology, and Phase Trial Studies.)
I present the second draft of my professional valuation of Lockheed Martin Corporation Equity per Share. I am satisfied with the variables, the cashflow projections, and the discounting; so this item does carry my estimate of LMT's present valuation.
I worked on the History (p. 2) and the WACC calculations (did some Excel coding after I found a slight Drop down menu / VLookup error) and I finalized the recommendations pp. 6, 7, & 10.
I hope my readers enjoy it as much as I am enjoying producing it!
I am eager to share this report on Lockheed's Monte Carlo Equity Valuation. I have been working on this write-up for Lockheed Martin and I think I am in striking range of completion, so I am sharing the first draft. I hope to round out the PESTLE and Porter Analysis this week and clean up the text, so look forward to a final draft during the first or second week of August.
This Monte Carlo multi-iteration DCF Model returns a fair value for Kraft Heinz: $35.496 . The static Model returns a valuation of $34.388 . These models are conservative estimates projecting zero growth forward using cost factors pulled from the mean of the prior 15 years with a coefficient of variability of the cost factors equal to 10%. Kraft Heinz Company pays a dividend yield of 4.20% ay July 22, 2022.
KHC: Kraft Heinz Company came up on the screen I had completed earlier in the week on Tuesday, and it has been one of my favorites for many years (from before the divestiture of certain assets to Mondelez. Kraft is a textbook example of a stable U.S. entity which made a successful transition to multinational operations through purposefully introducing itself to various foreign markets, and also through astute trades and/or investments into food companies abroad. Kraft has significant presence in Europe, Asia, and Latin America; and a growing presence in Africa.
The Kraft Heinz Company, together with its subsidiaries, manufactures and markets food and beverage products in the United States, Canada, the United Kingdom, and internationally. Its products include condiments and sauces, cheese and dairy products, meals, meats, refreshment beverages, coffee, and other grocery products. The company also offers dressings, healthy snacks, and other categories; and spices and other seasonings. It sells its products through its own sales organizations, as well as through independent brokers, agents, and distributors to chain, wholesale, cooperative and independent grocery accounts, convenience stores, drug stores, value stores, bakeries, pharmacies, mass merchants, club stores, and foodservice distributors and institutions, including hotels, restaurants, hospitals, health care facilities, and government agencies; and online through various e-commerce platforms and retailers. The company was formerly known as H.J. Heinz Holding Corporation and changed its name to The Kraft Heinz Company in July 2015. The Kraft Heinz Company was founded in 1869 and is headquartered in Pittsburgh, Pennsylvania. (FY: 2021-12-25)
GILD 2021 10K: Gilead Sciences, Inc. is a biopharmaceutical company that has pursued and achieved breakthroughs in medicine for more than three decades. In 2021, the firm's primary revenue drivers originate with medications designed to combat HIV, AIDs and its symptoms. Gilead has also produced medications for combatting coronavirus disease 2019 (“COVID-19”). The firm also researches and manufactures medications treating liver disease. The firm serves the international market and has a vibrant and active pipeline of R&D, and potential offerings in various stages of testing and/or awaiting regulatory approval. (FY: 2021-12-31)
These Monte Carlo DCF and Static DCF analyses hold revenue growth to 0.00% (no growth) while modeling the income statement cost components following 15-year historic means and a coefficient of variability of 10%. (Many analysts are forecasting retracting revenue of between 1.0% and 2.5% for the foreseeable years.) Even at no growth of revenue, Monte Carlo analysis returns excellent and stable valuations for Gilead with a lower bound of approximately $43.70 and an upper bound of about $96.80 . In addition Gilead pays a healthy dividend yielding 4.66% at its current trading price of $66.
This analyst will expend some additional effort reviewing the firm's Phase Trial Clinical studies and pipeline for FDA and/or EU approval. Those qualitative reports will follow in the coming month.
I spent the morning updating BBBY: Bed Bath and Beyond. Crazy SGA volatility coupled with Covid quarantines to cripple this long-time Brick & Mortar household goods brand. The firm has some culture *problems*. Notably, stores were traditionally free to run themselves, carrying product lines local management surmised the local community cherished. Hence, there were never any true scale economies in purchasing inventory. Other problems include over-reliance on brick and mortar stores to the detriment of internet marketing; an *early/long-time* history of coupons which never expired; *early/long-time* history of "free" shipping; and other things.
On the plus side, BBBY owns much of its real property and has long-term leases on other holdings. These valuable items are still booked at acquisition costs (c. 1970s-80s real property values) and would generate substantial returns if the firm would transition to a more robust online presence and lease out much of its brick and mortar network. Only time will tell; if, that is, the firm is able to weather the next likely terrible 24 months of horrendous sales...
Monte Carlo DCF projections reflect HUGE volatility. At 0.00% revenue growth, the model returns a range of valuation from a low of -$260.02 (yes, that is a negative number) and up to a maximum of +$256. I had reviewed BBBY way back in 2019, and I think that SWOT analysis is still useful, so I tacked it onto this quantitative analytical summary.
Bed Bath & Beyond Inc., together with its subsidiaries, operates a chain of retail stores. It sells a range of domestics merchandise, including bed linens and related items, bath items, and kitchen textiles; and home furnishings, such as kitchen and tabletop items, fine tabletop, basic housewares, general home furnishings, consumables, and various juvenile products. As of February 26, 2022, the company had 953 stores, which included 771 Bed Bath & Beyond stores in 50 states, the District of Columbia, Puerto Rico, and Canada; 130 buybuy BABY stores in 37 states and Canada; and 52 stores in 6 states under the names Harmon, Harmon Face Values or Face Values. It also offers products through various Websites and applications comprising bedbathandbeyond.com, bedbathandbeyond.ca, harmondiscount.com, facevalues.com, buybuybaby.com, buybuybaby.ca, and decorist.com. In addition, the company operates Decorist, an online interior design platform that provides personalized home design services. Bed Bath & Beyond Inc. was incorporated in 1971 and is headquartered in Union, New Jersey.
Post 2000s, Oil and Gas company valuations are particularly problematic. On the one hand, they still service the bulk of humanity's energy demands. In fact, it is oil, gas, shale, and coal which provide the bulk of the energy used to manufacture Green Energy infrastructure (turbines, solar, hydro, and even geo-thermal) - and fossil fuels will continue to dominate the energy produced for the manufacture of Green Energy technology for decades to come.
But on the other hand, we all know that humanity must move away from fossil fuels and Developed World nation-states all have varying degrees of regulations requiring phasing out fossil fuel use and technology within this century. Less Developed Countries (LDCs) are beginning to leap-frog, totally bypassing fossil fuel energy infrastructure and directly embracing Green Energy production (infrastructure constructed in Developed World and BRIC (mainly China) using fossil fuel energy).
Furthermore, shale oil (fracking) has empowered U.S. and Canada with enough surplus to become net exporters of oil, and this plays havoc with world oil pricing (notwithstanding the current situation of high prices with the ongoing war in Ukraine). So ... revenue growth rates, Capital Expenditures, even Depreciation Schedules all become difficult to model.
This analysis uses a modest forward 12.50% revenue growth rate (normal distribution; coefficient of variability 10%), with cost structure parameters taking the mean of 15-Yr historic patterns (high standard deviations, though); and a U.S. tax loading of 17% accommodating U.S. federal subsidies and favoritism to American Petroleum Institute lobby.
Bear in mind, though, that the Revenue Growth rate could go negative on a dime, as it had done in the 2010s, when oil and gas retracted and spent next to nothing on Capital Expenditure and discovery.
So, yeah. Fossil Fuel producers: oil and gas (not so much coal) are very difficult to value in this climate.
These variables produce a low range of potential value for Devon Energy Corporation. The obvious workaround would be to broaden the coefficient of variability for the Revenue growth rate and cost parameters. But this option is not attractive because, while more accurately mimicking true-to-life historical volatility in asset pricing, it would produce too broad a range of scenario valuation as to be of any practical use. So this instant valuation produces a rather low valuation estimate, indeed.
3M is interesting. It is a multinational conglomerate with production and sales ranging from household goods to medical devices. The numerical analysis is straightforward. But the trick AND the excitement of valuing these types of companies is that it forces the analyst to learn about the various production methods and markets for disparate ranges of products and look at the company as a true portfolio of cash-generating assets - the various productions - while analyzing and rating the risks of all of those different markets.
I first looked at 3M back in 2016, and then - apparently I have never looked at it since, because the Excel file in my Equity Valuation folders has not been revised in five or six years.
Well, it got some treatment today.
This is an econometrics analysis of quantitative data for 3M. I will review some qualitative data in the coming weeks, but based on the numbers, it looks really good. I included 10 iterations of the 1 Million steps to the Monte Carlo DCF. Enjoy.
I valued Biogen back in 2014 for an old friend, and I have looked in on it sporadically over the years. I did not like it back in the 2010s because it had too many competing therapies for multiple schlerosis (from my 2014 report here https://www.slideshare.net/LMBeharry/biib-reportlmbenterprises-59573190):
"• Several of the product offerings address multiple sclerosis, and these pharma products will likely begin cannibalizing each other within the intermediate term. The analyst believes that this cannibalization will curtail growth within the MS product line within the next 18 to 24 months."
and
"• The firm has submitted hemophilia agents, Factor VIII and Factor IX to the US FDA for regulatory review, anticipating marketing approval in 2014-2015. As these hemophilia products are administered orally, analysts expect sales to grow robustly indeed. (i.e. more doctors will prescribe the treatment as it circumvents costly and frequent recurrent need of infusion of clotting factor). Statistics indicate that roughly 20,000 US residents suffer with hemophilia. A market of 20,000 patients is not a growth sector."
Note that I have not kept up with its pipeline, nor its successes/failures at clinical trial. This printout is solely an exercise in econometric analysis using its historical cost structure to derive an equity valuation.
If you are curious about its current research endeavors, I provide the link for clinical trials here (already sorted for Biogen): https://clinicaltrials.gov/ct2/results?cond=&term=Biogen&cntry=&state=&city=&dist=
This document appears to be a resume or CV for Lyndon Beharry. It includes his educational background, including a Master's in Business Administration and some law school education. It also outlines his extensive professional experience in business, education, and non-profit work over nearly 30 years. This includes experience teaching in Mongolia and managing projects there. The CV highlights his skills in areas like financial modeling, education, and technical writing. Recommendation letters from previous employers in Mongolia praise his teaching abilities and contributions to their organizations.
Exelon Corporation is America's largest utility company, powering over 10 million customers across 6 regulated utility companies. In 2021, Exelon announced plans to separate into two publicly traded companies - Exelon Utilities which will include the regulated utilities, and Exelon Generation which will include competitive power generation and customer-facing energy businesses. The document provides an overview of Exelon's business history, financial performance, and challenges relating to competition and environmental regulation.
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Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
Understanding how timely GST payments influence a lender's decision to approve loans, this topic explores the correlation between GST compliance and creditworthiness. It highlights how consistent GST payments can enhance a business's financial credibility, potentially leading to higher chances of loan approval.
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"Does Foreign Direct Investment Negatively Affect Preservation of Culture in the Global South? Case Studies in Thailand and Cambodia."
Do elements of globalization, such as Foreign Direct Investment (FDI), negatively affect the ability of countries in the Global South to preserve their culture? This research aims to answer this question by employing a cross-sectional comparative case study analysis utilizing methods of difference. Thailand and Cambodia are compared as they are in the same region and have a similar culture. The metric of difference between Thailand and Cambodia is their ability to preserve their culture. This ability is operationalized by their respective attitudes towards FDI; Thailand imposes stringent regulations and limitations on FDI while Cambodia does not hesitate to accept most FDI and imposes fewer limitations. The evidence from this study suggests that FDI from globally influential countries with high gross domestic products (GDPs) (e.g. China, U.S.) challenges the ability of countries with lower GDPs (e.g. Cambodia) to protect their culture. Furthermore, the ability, or lack thereof, of the receiving countries to protect their culture is amplified by the existence and implementation of restrictive FDI policies imposed by their governments.
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In a tight labour market, job-seekers gain bargaining power and leverage it into greater job quality—at least, that’s the conventional wisdom.
Michael, LMIC Economist, presented findings that reveal a weakened relationship between labour market tightness and job quality indicators following the pandemic. Labour market tightness coincided with growth in real wages for only a portion of workers: those in low-wage jobs requiring little education. Several factors—including labour market composition, worker and employer behaviour, and labour market practices—have contributed to the absence of worker benefits. These will be investigated further in future work.
What's a worker’s market? Job quality and labour market tightness
Monte Carlo Analysis of Oyu Tolgoi CashFlows
1.
2. MONTE CARLO ANALYSIS
OT CASHFLOWS
ABSTRACT
This pedagogical project constructs a multi-iteration Monte Carlo
model (with Oracle Crystal Ball) purposed to value the Oyu Tolgoi,
LLC Copper and Gold mineral production. The analyst pursued a
novel approach, using neither constant mineral pricing, nor step
increments in mineral pricing. Rather, the analyst created the
simulation to follow fifty to sixty-year historic patterns of inflation
and individual mineral’s price volatility (Compound Annual Growth
Rates: CAGR) to project future volatility (modeling inflation within
the future mineral’s pricing structure). The analyst prefers this
approach because inflation occurs in the real world.
The Simulation produces: 1) projected aggregate (over prospective 30-
35 years) cash-flow; 2) DCF NPV projections; and finally 3)
appraises the overall Oyu Tolgoi Project and apportions estimates
for the principal shareholders: Erdenes MGL LLC, Rio Tinto (through
its holdings in TRQ), and Turquoise Hill (TRQ excluding Rio Tinto).
The model clearly shows that the Government of Mongolia is highly
favored by this investment scheme. The projections suggest GoM
will secure over 73% of the projected CashFlows, inclusive of
Royalties, Customs charges, Taxes, and FCFE.
3. What is the Monte Carlo
method?
Developed by physicists in
the early 20th century to
account for complex
interactions in quantum
uncertainty;
Randomly fluctuates underlying
parameters;
The analysis constrains the
underlying parameters by some
reasonable and justifiable
measure (distribution parameters
or strange attractors).
By the 1960’s
economists and
financial engineers
had adopted the
Monte Carlo method.
Merton Black Scholes
options pricing model, for
instance, predicts security
price using a continuous
lognormal distribution based
upon Brownian Motion with
Drift (a Monte Carlo random
fluctuation, constrained to the
curve parameters).
MONTE CARLO ANALYSIS
4. Uncertainty
surrounds
potential
outcomes
Inflation rate;
Securities prices;
Commodities prices;
Energy prices;
Machine downtime;
Productivity;
Maintenance time;
Etc.
Monte Carlo forces
the analyst to
study variables
and isolate
patterns (if any) to
project a
continuum of
potential
influence.
Often based upon
historical data;
Tuned to the analyst’s
knowledge of current
news, and the behaviors of
the market, the group, etc.
BENEFITS OF MONTE CARLO
FOR FINANCE
5. BENEFITS OF MONTE CARLO
FOR FINANCE
Monte Carlo produces a probable range of
outcome;
Some consider this superior to the traditional weighted
average calculation of: Best Case; Likely Case; Worst
Case scenario modeling.
Certainly, the model requires:
Excellent hard data from which to draw patterns;
Skill and acumen in analysis;
Fine-tuning to correct for changes in trends and market
behaviors;
Careful interpretation of the model projections.
6. MONTE CARLO
STUDY OF COPPER AND GOLD PRICES
This analysis draws historical price data for the
major mineral commodities OT produces:
namely Cu and Au;
Price data is readily available online from a host of sources:
World Bank, various universities, trade firms, etc.
This analysis isolates statistical trends (if any)
among the price data;
The analyst focused on percent change in price over various
intervals: moving year; 5-year; 10-year; 20-year; and 40-year;
Draw basic statistics references: means, deviations, and curve shape.
Oracle Crystal Ball software includes functions to isolate the particular
curve shape parameters based upon data input.
Perform an honest check for correlation;
The analyst looked for correlation to a metric of inflation, in
this case, the US CPI.
10. MONTE CARLO
STUDY OF COPPER AND GOLD PRICES
Historical Data (1952-2013) show high
correlation between the following
United States CPI and Cu Price r-Value: 0.78628
United States CPI and Au Price r-Value: 0.80976
CAGR US CPI and CAGR Au r-Value: 0.89198 (all years
from 1955 to 2013)
Correlation analysis compelled the analyst to
produce a regression equation.
13. MONTE CARLO
STUDY OF COPPER AND GOLD PRICES
The correlation and plots of the changes in price of the
data suggest the following pattern:
The mean (arithmetic average) of US CPI 40-year CAGR equals
4.477% (Accounting for all years from 1952-2013)
One ought to temper this view of US inflation to include the 1970’s rise of OPEC as
a factor in world economy. By the late 1970’s, this contributed to a drastic rise to
US inflation; and many economists would argue that long-term US inflation is more
on the order of 3.00% to 3.50%.
The mean (arithmetic average) of Cu $/lb 40-year CAGR equals
3.303% (Nominal basis and Accounting for all years from 1952-2013)
In the recent past, nominal price of copper rose approximately 1.1% less than US
CPI.
Fiber optic cable (reduced demand for copper in telephony)
Recycled copper (mainly telephony and construction) produce a secondary source of supply.
The mean (arithmetic average) Au $/oz 40-year CAGR equals 6.725%
(Nominal basis and Accounting for all years from 1952-2013)
In the recent past, nominal price of gold rose approximately 2.25% higher than US
CPI.
After revisions to the Bretton Woods accord, particularly after 1971, gold price corrected
itself away from a forced parity relationship to USD to reflect a price more in tune with true
supply and demand for gold to satisfy industrial use and requirements.
14. MONTE CARLO
STUDY OF COPPER AND GOLD PRICES
Problems with the correlation and parameters:
The parameters are based upon past data.
A range of political entities and economic situations influenced the
unfolding of this past data. The future prices may unfold according
to different parameters.
Future technology (influencing supply and demand), future
consumption (demand), and future production (supply) may unfold
differently than in the past 60 years, nullifying any implied or
observed correlation.
Etc.
Solution to these problems?
Temper the parameters by applying current knowledge
and trends to improve the model.
15. COPPER MACROECONOMICS
1970’s-Present, telephony
created drastic changes
to Copper Supply and
Demand.
These forces may be primarily
responsible for the decrease in
real (inflation-adjusted) copper
price.
Hybrid Electric Vehicles
and Plug-in Hybrid
Electric Vehicles are
again forcing a shift in
Copper Demand
Electric vehicles use wound
copper in the motor for the
electro-magnet.
16. COPPER MACROECONOMICS
J.D. Power expects the
compounded annual growth
rate for global HEV sales
between 2010 and 2020 to be
13.8%. Still, despite the
expected rapid growth rate,
sales are projected to be just
3.88 million units in 2020, or
only 5.5% of the 70.9 million
passenger vehicles to be sold
by that year.
The United States is forecasted to
account for 53% of the global
HEV total, followed by Japan
(20%) and Europe (16%), while
the remaining 11% will be
spread among all other
countries.
(http://www.jdpower.com/sites/defa
ult/files/2010_WhitePaper_DriveGre
en2020.pdf)
17. APPLYING THE MONTE CARLO MODEL
FOR OT
Create a cashflow
budget
projection;
Isolate the OT project
parameters for
prospective annual
production, costs,
taxes, and so forth;
Assure that the coding
for the budget allows
that revenue and costs
drivers pull parameters
from a variable field for
dynamic calculation.
18. OT Production Projection
See "Oyu Tolgoi Project, Mongolia Integrated Development Plan" (August 2005), p. 32 and "2013
OYU TOLGOI TECHNICAL REPORT TURQUOISE HILL RESOURCES LTD." (March 2013), p. 54.
19. APPLYING THE MONTE CARLO MODEL
FOR OT
Run the Monte Carlo
model, randomly
fluctuating the
underlying
parameters;
This model runs
approximately 250,000
iterations among each of
several hundred
variables.
Collect the results
and analyze the
projections.
20. WHAT THE MODEL SHOWS FOR OT
Analysis of the existing
Royalties and
Taxation regime:
GoM assesses a 5% on
Royalties directly out of the
mineral sales;
GoM assesses a 5%
Customs duty on Revenue
(less CoGs) minus Treatment
and Refining charges;
GoM assesses a 25% tax on
EBT, following GAAP;
GoM assesses a 10% Value-
Added Tax on EBT;
GoM assesses a 20% With-holding
tax on EBT.
21. CONTINGENCIES AND OPEN ITEMS
Oyu Tolgoi has not
completed
financing for the
lucrative
underground sector
of the mine:
Estimate of debt
placement of $5 Billion or
higher
Add a debt service allocation
to the Cash Flow
Projections;
Amend all cash-flows to the
stakeholders;
Lower the weighted average
cost of capital; thereby
boosting the DCF valuation
These graphics reflect a high
WACC of 12.913%, estimated
solely upon equity. The debt
component will reduce the
WACC overall.
22. This analysis is
incomplete
After GoM and OT confirm
the debt placement and the
cost of debt, the analyst will
complete a more thorough
analysis of Aggregate
CashFlow and Discounted
Cash Flow (NPV);
Five years of hard production
data will produce a greater
confidence in the predictive
power of the Monte Carlo
analysis
The analyst is anxious
(along with all
stakeholders) for
Mongolia’s prosperity
and productivity –
within all economic
sectors.
FINE-TUNING THE MODEL