Ulaanbaatar-based Silk Road Management has launched the Silk Road Australia index to complement its Silk Road Hong Kong index which tracks Hong Kong-listed mining and energy stocks in Mongolia.

The Australian index initially covers 10 companies with a market capitalisation of around $US1.2 billion ($A1.1 billion), with Guildford Coal the largest with a market capitalisation of $331.1 million at the end of December.

The other companies on the index are fellow coal hopeful Aspire Mining, new listing FeOre, Kyrgyz Republic-focused Kentor Gold, copper-gold explorer Voyager Resources, coal play Xanadu Mines, iron ore company Haranga Resources, oil stock Jupiter Energy, Kyrgyz gold developer Manas Resources and coal minnow Modun Resources.

Coal companies make up 56% of the index’s total market capitalisation followed by metals (40%) and oil and gas (4%).

Silk Road managing partner Alisher Ali said there was huge potential for the index.

“We believe that the Silk Road Australia index with albeit modest $1.2 billion market capitalisation is expected to expand significantly in coming years on the back of upcoming IPOs of Mongolia-focused resource companies on the ASX and accelerated acquisitions in the mining sector in Mongolia by existing ASX-listed companies,” he said.

“Similarly, the Silk Road Hong Kong Index more than tripled to $12 billion in market capitalisation at end-2010 from $3.4 billion at the beginning of the same year due to three IPOs of Mongolian resources companies on the Hong Kong Stock Exchange – Mongolian Mining Corp, SouthGobi Energy and Winsway Coking Coal Holdings.

“We anticipate that Australian institutional and retail investors will seek exposure to new resource markets in the Silk Road region after witnessing the massive success of the mining sector in Australia.”