Irish bars springing up in Ulan Bator are as sure a sign as any that the outside world is taking an interest in Mongolia.
Those investors who can stomach a large measure of risk have found plenty of returns to be had in Mongolia during the past few years. The IMF estimated economic growth at 11.5 per cent last year and predicts 11.8 per cent for this yearamid a boom in production of rare earth metals and a bonanza of investment.
Mongolia's stock market was the second best-performing of last year, with its 46.9 per cent rise beaten only by a near-doubling of Venezuela's index.
But investors should take the local stock market performance with a grain of salt, given its small capitalisation and poor liquidity, said Mark McFarland, an emerging-markets economist at Emirates NBD. Despite being one of the riskier bets in a balanced portfolio, the country has its merits.
"The phenomenal returns are behind us, and you'll have more reasonable returns over the next five to 10 years," Mr McFarland said. "Our view is that if you can take a longer-term view on Mongolia, you can do very well."
While investing at the start of the country's growth could bring big returns, risks including uncertain completion dates for infrastructure projects and a decelerating pace of growth in neighbouring China were worth bearing in mind.
There are few ways to gain direct exposure to Mongolia, but retail investors looking for liquid stocks may wish to take a look at Ivanhoe Mines, a Canadian mineral company listed on the Toronto Stock Exchange and involved in copper and gold projects. Also of note is Mongolian Mining, a producer of coking coal listed on the Hong Kong Stock Exchange.
Political clamour to nationalise the country's mining industry and efforts to stem inflation could still spoil the party, said Fatema Akashah, an economist at Kuwait China Investment.
"The nature of the mining industry … allows a certain level of stability, as investments in mines take several years of development and orders for resources tend to be large," she wrote in a research note. "Mongolia is a land of opportunity, but investors must be aware of the possible landmines along the way."