Weekly Market Watch by Galt & Taggart

Weekly Market Watch by Galt & Taggart

The FINANCIAL -- Economy

Exports up 36.4% y/y in March 2017 

In March 2017, exports increased 36.4% y/y to US$ 220.8mn, imports were up 12.0% y/y to US$ 618.4mn, and the trade deficit widened 1.9% y/y to US$ 397.6mn according to GeoStat. In 3M17, trade deficit was up 8.3% y/y to US$ 1.1bn, as imports were up 14.9% y/y to US$ 1.7bn and exports were up 30.3% y/y to US$ 0.6bn.

Increased exports of copper (+49.7% y/y), ferro-alloys (+67.0% y/y), cars (+8.7% y/y) and wine (+66.5% y/y) were the major commodities driving strong export growth in March 2017. 26.2% of exports were directed to the EU (+73.7% y/y), 34.1% to the CIS (+37.3% y/y), and 39.7% to other countries (+18.9% y/y).

Petroleum (+69.9% y/y), cars (+23.1% y/y), gases (+58.6% y/y), pharmaceuticals (+6.9% y/y), and copper (-54.7% y/y) represented the top 5 imported commodities in March 2017. 

Producer price index down 1.4% m/m and up 9.1% y/y in March 2017

PPI for industrial goods decreased 1.4% m/m in March 2017, according to GeoStat. A 1.3% price decrease for manufacturing contributed the most to the overall index change as prices were down for manufacture of food products, beverages and tobacco (-1.5% m/m), and basic metals and fabricated metal products (-1.0% m/m).

Annual PPI was up 9.4% in March 2017. Rising prices in manufacturing (+8.6% y/y) contributed the most to the overall index change. Prices were also up for supply of electricity, gas and water (+10.6% y/y) and for mining and quarrying (+12.6% y/y).

NBG Purchased USD$ 9.75mn

On April 18, 2017, the NBG intervened on the FX market and purchased USD$ 9.75mn to curb appreciation of the national currency. This was second intervention since the start of the year. 

Fixed income

Corporate Eurobonds: BGEO Group Eurobonds (BGEOLN) closed at 5.8% yield, trading at 101.0 (unchanged w/w). GOGC Eurobonds (GEOROG) were trading at 105.2 (+0.1% w/w), yielding 5.3%. Georgian Railway Eurobonds (GRAIL) traded at a premium at 110.4 (+0.1% w/w), yielding 5.4%. 

Georgian Sovereign Eurobonds (GEORG) closed at 110.9 (+0.1% w/w) at 3.9% yield to maturity.

Equities

BGEO Group (BGEO LN) shares closed at GBP 35.06/share (+2.66% w/w and +14.50% m/m). More than 568k shares traded in the range of GBP 33.53 – 35.40/share. Average daily traded volume was 106k in the last 4 weeks. FTSE 250 Index, of which BGEO is a constituent, lost 0.84% w/w and gained 1.97% m/m. The volume of BGEO shares traded was at 1.44% of its capitalization.

 TBC Bank Group (TBCG LN) closed the week at GBP 15.39 (+0.59% w/w and +4.34% m/m). More than 58k shares changed hands in the range of GBP 15.00 – 15.40/share. Averaged daily traded volume was 39k in the last 4 weeks.

Georgia Healthcare Group (GHG LN) shares closed at GBP 3.63/share (+0.69% w/w and +0.69% m/m). More than 61k shares were traded in the range of GBP 3.50 – 3.62/share.  Average daily traded volume was 7k in the last 4 weeks. The volume of GHG shares traded was at 0.05% of its capitalization.

Money Market

Refinancing loans: National Bank of Georgia (NBG) issued 7-day refinancing loans of GEL 1,270mn (US$ 530.0mn). 

Ministry of Finance Treasury Notes: 10-year GEL 20.0mn (US$ 8.4mn) T-Notes of Ministry of Finance were sold at the auction held at NBG on April 19, 2017. The weighted average yield was fixed at 9.973%.  The nearest treasury security auction is scheduled for April 26, 2017, where GEL 25.0mn nominal value 5-years T-Notes will be sold.