Mongolia Growth Group Ltd. Publishes March 2013 Monthly Letter to Shareholders: "The other factor in property price appreciation, which shows up later in the cycle, is the creation of a strong banking sector and mortgage market. For a point of reference, today in Ulaanbaatar, if you want to borrow US Dollars they will cost you nearly 20% while Mongolian Togrog will cost you over 25% a year. In addition, it is difficult to get mortgages that are longer than a few years in duration. Clearly, this is the reason for mid-teen yields on premium stabilized assets-with many second tier assets valued at over 20% yields. In the past few months, we have seen a number of data points that would make us believe that interest rates may have begun to decline and lead to this second leg of price appreciation becoming relevant.
In 2012, the Mongolian government raised $1.5 billion at interest rates of 4.125% for $0.5 billion and 5.125% for $1.0 billion. This money is now filtering into the economy as the government chooses various programs to finance."
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