Weekly Market Watch by Galt & Taggart

Weekly Market Watch by Galt & Taggart

The FINANCIAL -- Economy

Exports up 28.0% y/y in April 2017 

In April 2017, exports increased 28.0% y/y to US$ 211.6mn, imports were up 6.3% y/y to US$ 591.6mn and the trade deficit narrowed 2.9% y/y to US$ 380.0mn. Overall in 4M17 exports were up 29.7% to US$788.1mn, imports increased 12.7% to US$ 2.3bn and the trade deficit widened 5.5% to US$ 1.5bn.

Increased exports of copper (+38.8% y/y), ferro-alloys (+72.6% y/y), pharmaceuticals (+57.2% y/y) and cars (+14.2% y/y) were the major commodities driving export growth in April 2017. A 17.0% of exports were directed to the EU (-1.7% y/y), 42.8% to the CIS countries (+65.0% y/y), and 40.2% to other countries (+15.2% y/y).

Petroleum (+39.5% y/y), copper (+184.2% y/y), cars (+1.6% y/y), gases (+8.7% y/y), and pharmaceuticals (-39.3% y/y) represented the top 5 imported commodities in April 2017. 

Producer price index down 1.3% m/m and up 9.0% y/y in April 2017

PPI for industrial goods decreased 1.3% m/m in April 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 basic metals and fabricated metal products (-4.7% m/m) and manufacture of food products, beverages and tobacco (-0.8% m/m).

Annual PPI was up 9.0% in April 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 (+9.4% y/y) and for mining and quarrying (+14.4% y/y). 

Money transfers up 11.6% y/y in April 2017 

In April 2017, money transfers increased 11.6% y/y to US$ 105.8mn after growing 23.5% y/y in previous month, according to NBG. Money transfers were up from almost all major remitting countries: Russia (+12.1% y/y, 33.4% of total), USA (+12.8% y/y, 10.5% of total), Italy (+3.0% y/y, 9.6% of total), Israel (+92.4% y/y, 8.5% of total) and Turkey (+19.2% y/y, 8.1% of total). While money transfers were down from Greece (-6.6% y/y, 10.4% of total). In 4M17 money transfers were up 19.3% y/y to US$ 395.9mn.

Fixed income

Corporate Eurobonds: BGEO Group Eurobonds (BGEOLN) closed at 5.8% yield, trading at 101.3 (unchanged w/w). GOGC Eurobonds (GEOROG) were trading at 105.4 (-0.2% w/w), yielding 5.2%. Georgian Railway Eurobonds (GRAIL) traded at a premium at 110.7 (-0.1% w/w), yielding 5.3%. 

Georgian Sovereign Eurobonds (GEORG) closed at 111.2 (-0.2% w/w) at 3.7% yield to maturity

Equities

BGEO Group (BGEO LN) shares closed at GBP 36.84/share (+2.13% w/w and +5.44% m/m). More than 404k shares traded in the range of GBP 35.90 – 37.60/share. Average daily traded volume was 94k in the last 4 weeks. FTSE 250 Index, of which BGEO is a constituent, gained 0.25% w/w and gained 2.04% m/m. The volume of BGEO shares traded was at 1.02% of its capitalization.

TBC Bank Group (TBCG LN) closed the week at GBP 16.03 (-2.49% w/w and +4.29% m/m). More than 329k shares changed hands in the range of GBP 15.85 – 16.50/share. Averaged daily traded volume was 87k in the last 4 weeks.

Georgia Healthcare Group (GHG LN) shares closed at GBP 3.45/share (-5.51% w/w and -3.23% m/m). More than 10mn shares were traded in the range of GBP 3.37 – 3.75/share.  Average daily traded volume was 564k in the last 4 weeks. The volume of GHG shares traded was at 7.96% of its capitalization.

Money Market

Refinancing loans: National Bank of Georgia (NBG) issued 7-day refinancing loans of GEL 1,300mn (US$ 539.1mn). 

Certificates of deposit: NBG sold 91-day, GEL 20mn (US$ 8.3mn) certificates of deposit, with an average yield of 7.11% (up by 23bps from previous issue).

Ministry of Finance Treasury Bills: The nearest treasury security auction is scheduled for May 31, 2017, where GEL 20.0mn nominal value 5-Year T-Notes will be sold.