Weekly Market Watch by Galt & Taggart

Weekly Market Watch by Galt & Taggart

The FINANCIAL -- Economy

Real GDP grew 5.3% y/y in May 2017

Georgia’s economy expanded 5.3% y/y in May 2017, after growing 2.1% y/y in previous month, according to GeoStat’s rapid estimates. Overall, in 5M17 GDP growth was 4.5% y/y. Monthly rapid estimates are based on VAT turnover, fiscal and monetary statistics.

NPLs at 3.7% in May 2017

In May 2017, the banking sector loan portfolio increased 14.3% y/y after growing 13.3% y/y in previous month, excluding the exchange rate effect. In unadjusted terms, loan portfolio was up 25.7% y/y and 0.9% m/m to GEL 19.1bn (US$ 7.9bn). Deposits were up 12.4% y/y excluding the exchange rate effect. In unadjusted terms, deposits were up 21.4% y/y and up 1.1% m/m to GEL 16.4bn (US$ 6.7bn). Deposit dollarization reached 68.6% (+1.6ppts y/y and -0.1ppts m/m). NPLs stood at 3.7% in May 2017, flat y/y and  m/m.

NBG Purchased USD$ 40.0mn

On 26 and 28 June 2017, the NBG intervened on the FX market and purchased US$ 20.0mn and US$ 20.0mn, respectively on its foreign exchange auction. Overall, NBG purchased US$ 89.8mn YTD.

Fixed income

Corporate Eurobonds: BGEO Group Eurobonds (BGEOLN) closed at 5.6% yield, trading at 101.8 (-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 105.5 (+0.1% w/w), yielding 5.1%. Georgian Railway Eurobonds (GRAIL) traded at a premium at 110.2 (-0.2% w/w), yielding 5.4%. 

Georgian Sovereign Eurobonds (GEORG) closed at 111.8 (-0.1% w/w) at 3.5% yield to maturity

Equities

BGEO Group (BGEO LN) shares closed at GBP 34.94/share (+0.06% w/w and -5.49% m/m). More than 452k shares traded in the range of GBP 34.11 – 35.41/share. Average daily traded volume was 115k in the last 4 weeks. FTSE 250 Index, of which BGEO is a constituent, lost 0.88% w/w and lost 3.39% m/m. The volume of BGEO shares traded was at 1.15% of its capitalization.

TBC Bank Group (TBCG LN) closed the week at GBP 16.84 (-5.04% w/w and -6.82% m/m). More than 819k shares changed hands in the range of GBP 15.50 – 16.52/share. Averaged daily traded volume was 235k in the last 4 weeks.

Georgia Healthcare Group (GHG LN) shares closed at GBP 3.56/share (-6.38% w/w and +2.23% m/m). More than 215k shares were traded in the range of GBP 3.50 – 3.80/share.  Average daily traded volume was 98k in the last 4 weeks. The volume of GHG shares traded was at 0.16% of its capitalization.

Money Market

Refinancing loans: National Bank of Georgia (NBG) issued 7-day refinancing loans of GEL 1,150mn (US$ 477.7mn). 

Ministry of Finance Treasury Bills: 5-year GEL 20.0mn (US$ 8.3mn) T-Notes of Ministry of Finance were sold at the auction held at NBG on June 28, 2017. The weighted average yield was fixed at 8.228%. The nearest treasury security auction is scheduled for July 5, 2017, where GEL 50.0mn nominal value 1-year T-Bills will be sold.