Weekly Market Watch by Galt & Taggart

Weekly Market Watch by Galt & Taggart

Weekly Market Watch by Galt & Taggart

The FINANCIAL -- Economy

Real GDP grew 4.3% y/y in August 2017

Georgia’s economy expanded 4.3% y/y in August 2017, after growing 3.8% y/y in previous month, according to GeoStat’s rapid estimates. Overall, in 8M17 GDP growth was 4.7% y/y. Monthly rapid estimates are based on VAT turnover, fiscal and monetary statistics.

NPLs at 3.3% in August 2017

In August 2017, the banking sector loan portfolio increased 13.6% y/y after growing 13.1% y/y in previous month, excluding the exchange rate effect. In unadjusted terms, loan portfolio was up 19.8% y/y and 0.9% m/m to GEL 19.7bn (US$ 8.1bn). Deposits were up 18.2% y/y excluding the exchange rate effect. In unadjusted terms, deposits were up 22.2% y/y and up 5.0% m/m to GEL 17.8bn (US$ 7.3bn). Deposit dollarization reached 65.5% (-3.5ppts y/y and flat m/m). NPLs stood at 3.3% in August 2017(-0.7% y/y and -0.1% m/m).

Fixed income

Corporate Eurobonds: BGEO Group Eurobonds (BGEOLN) closed at 5.3% yield, trading at 103.4 (+0.1% w/w). Bank of Georgia GEL-denominated Eurobonds (GEBGG) were trading at 100.0 (unchanged w/w), yielding 11.0%. GOGC Eurobonds (GEOROG) were trading at 106.1 (-0.9% w/w), yielding 4.9%. Georgian Railway Eurobonds (GRAIL) traded at a premium at 111.5 (-0.9% w/w), yielding 5.0%.
Georgian Sovereign Eurobonds (GEORG) closed at 112.4 (-0.3% w/w) at 3.1% yield to maturity. Georgia Eurobonds, YTM (%)

Equities

BGEO Group (BGEO LN) shares closed at GBP 32.60/share (-0.91% w/w and -5.29% m/m). More than 216k shares traded in the range of GBP 32.02 – 32.97/share. Average daily traded volume was 54k in the last 4 weeks. FTSE 250 Index, of which BGEO is a constituent, gained 1.77% w/w and gained 1.71% m/m. The volume of BGEO shares traded was at 0.55% of its capitalization.

TBC Bank Group (TBCG LN) closed the week at GBP 16.60 (+1.28% w/w and +5.13% m/m). More than 126k shares changed hands in the range of GBP 16.00 – 16.98/share. Averaged daily traded volume was 33k in the last 4 weeks.

Georgia Healthcare Group (GHG LN) shares closed at GBP 2.95/share (-7.81% w/w and -15.81% m/m). More than 155k shares were traded in the range of GBP 2.95 – 3.20/share. Average daily traded volume was 41k in the last 4 weeks. The volume of GHG shares traded was at 0.12% of its capitalization.

Money Market

Refinancing loans: National Bank of Georgia (NBG) issued 7-day refinancing loans of GEL 1,000mn (US$ 412.0mn).

Ministry of Finance Treasury Bills:

5-year GEL 20.0mn (US$ 8.1mn) T-Notes of Ministry of Finance were sold at the auction held at NBG on September 27, 2017. The weighted average yield was fixed at 7.871%. The nearest treasury security auction is scheduled for October 4, 2017, where GEL 30.0mn nominal value 1-year T-Bills will be sold.