Weekly Market Watch by Galt & Taggart

Weekly Market Watch by Galt & Taggart

The FINANCIAL -- Economy

Exports up 25.0% y/y in May 2017

In May 2017, exports increased 25.0% y/y to US$ 215.2mn, imports were up 3.8% y/y to US$ 633.2mn and the trade deficit narrowed 4.6% y/y to US$ 418.0mn. Overall in 5M17 exports were up 28.7% to US$1.0bn, imports increased 10.8% to US$ 2.9bn and the trade deficit widened 3.4% to US$ 1.9bn.

Increased exports of copper (+134.1% y/y), cars (+38.3% y/y), Wine (+60.0% y/y) and spirits (+92.7% y/y) were the major commodities driving export growth in May 2017. 

Petroleum (+12.9% y/y), cars (-13.0% y/y), copper (+252.2% y/y), pharmaceuticals (+2.5% y/y) and phones (+28.7% y/y) represented the top 5 imported commodities in May 2017. 

Producer price index unchanged m/m and up 9.4% y/y in May 2017

PPI for industrial goods remained unchanged m/m in May 2017, according to GeoStat. A 0.6% price increase for manufacturing contributed the most to the overall index change as prices were up for manufacture of basic metals and fabricated metal products (+1.9% m/m) and electrical and optical equipment (+30.9% m/m).

Annual PPI was up 9.4% in May 2017. Rising prices in manufacturing (+9.1% y/y) contributed the most to the overall index change. Prices were also up for supply of electricity, gas and water (+7.8% y/y) and for mining and quarrying (+22.2% y/y). 

NBG Purchased USD$ 30.0mn

On June 19 and 20, 2017, the NBG intervened on the FX market and purchased USD$ 10.0mn and USD$ 20.0mn, respectively on its foreign exchange auction. 

Fixed income

Corporate Eurobonds: BGEO Group Eurobonds (BGEOLN) closed at 5.6% yield, trading at 101.9 (+0.1% w/w).   Bank of Georgia GEL-denominated Eurobonds (GEBGG) were trading at 100.3 (unchanged w/w), yielding 10.9%. GOGC Eurobonds (GEOROG) were trading at 105.4 (unchanged w/w), yielding 5.2%. Georgian Railway Eurobonds (GRAIL) traded at a premium at 110.4 (-0.3% w/w), yielding 5.4%. 

Georgian Sovereign Eurobonds (GEORG) closed at 111.9 (-0.1% w/w) at 3.5% yield to maturity.

Equities

BGEO Group (BGEO LN) shares closed at GBP 34.92/share (-3.83% w/w and -5.29% m/m). More than 448k shares traded in the range of GBP 34.57 – 36.41/share. Average daily traded volume was 117k in the last 4 weeks. FTSE 250 Index, of which BGEO is a constituent, lost 0.65% w/w and lost 1.17% m/m. The volume of BGEO shares traded was at 1.14% of its capitalization.

 TBC Bank Group (TBCG LN) closed the week at GBP 16.68 (-3.64% w/w and -0.42% m/m). More than 127k shares changed hands in the range of GBP 16.38 – 17.53/share. Averaged daily traded volume was 232k in the last 4 weeks.

Georgia Healthcare Group (GHG LN) shares closed at GBP 3.80/share (-3.68% w/w and +8.49% m/m). More than 240k shares were traded in the range of GBP 3.80 – 4.03/share.  Average daily traded volume was 98k in the last 4 weeks. The volume of GHG shares traded was at 0.18% of its capitalization.

Money Market

Refinancing loans: National Bank of Georgia (NBG) issued 7-day refinancing loans of GEL 1,330mn (US$ 552.3mn). 

Ministry of Finance Treasury Bills: 1-year GEL 50.0mn (US$ 20.8mn) T-Bills of Ministry of Finance were sold at the auction held at NBG on June 21, 2017. The weighted average yield was fixed at 7.383%. The nearest treasury security auction is scheduled for June 28, 2017, where GEL 20.0mn nominal value 5-year T-Notes will be sold.