Weekly Market Watch by Galt & Taggart

Weekly Market Watch by Galt & Taggart

Weekly Market Watch by Galt & Taggart

The FINANCIAL -- Economy

Real GDP growth was 5.7% y/y in October 2017

Georgia’s economy expanded 5.7% y/y in October 2017, highest monthly growth since July 2014, according to GeoStat’s rapid estimates. Overall, in 10M17 real GDP growth was 4.9% y/y (growth was 2.4% y/y in 10M16). In October 2017, the growth was recorded in hotels and restaurants, manufacturing, trade and transport sectors, while growth was down in construction and real estate operations. Monthly rapid estimates are based on VAT turnover, fiscal and monetary statistics.

Tbilisi hosted Belt & Road Forum 2017

On November 28-29, 2017, Tbilisi Belt and Road biennial high-level Forum of 2017 hosted over 1000 government officials, international organizations, experts and business representatives to discuss issues pertaining to the constantly evolving regional and global trade landscape, including trade facilitation, opportunities of e-commerce and digital connectivity, transport infrastructure and energy sector. The Forum also offered companies opportunities to participate in business-to-business meetings to network, share experiences and knowledge.

Fixed income

Corporate Eurobonds: BGEO Group Eurobonds (BGEOLN) closed at 5.1% yield, trading at 104.3 (+0.7% w/w). Bank of Georgia GEL-denominated Eurobonds (GEBGG) were trading at 100.5 (unchanged w/w), yielding 10.8%. GOGC Eurobonds (GEOROG) were trading at 107.5 (unchanged w/w), yielding 4.3%. Georgian Railway Eurobonds (GRAIL) traded at a premium at 112.1 (+0.1% w/w), yielding 4.8%.

Georgian Sovereign Eurobonds (GEORG) closed at 112.2 (-0.1% w/w) at 3.0% yield to maturity. Georgia Eurobonds, YTM (%)

Equities

BGEO Group (BGEO LN) shares closed at GBP 32.69/share (-1.95% w/w and -7.66% m/m). More than 284k shares traded in the range of GBP 32.28 – 33.53/share. Average daily traded volume was 70k in the last 4 weeks. FTSE 250 Index, of which BGEO is a constituent, lost 0.86% w/w and lost 2.14% m/m. The volume of BGEO shares traded was at 0.72% of its capitalization.

TBC Bank Group (TBCG LN) closed the week at GBP 15.60 (-4.18% w/w and -9.57% m/m). More than 162k shares changed hands in the range of GBP 15.28 – 16.33 share. Averaged daily traded volume was 22k in the last 4 weeks.

Georgia Healthcare Group (GHG LN) shares closed at GBP 3.40/share (+0.15% w/w and -5.56% m/m). More than 47k shares were traded in the range of GBP 3.35 – 3.52/share. Average daily traded volume was 8k in the last 4 weeks. The volume of GHG shares traded was at 0.04% of its capitalization.

Money Market

Refinancing loans: National Bank of Georgia (NBG) issued 7-day refinancing loans of GEL 1,120mn (US$ 411.4mn).

Certificates of deposit: NBG sold 91-day, GEL 20mn (US$ 7.3mn) certificates of deposit, with an average yield of 7.16% (up 0.07ppts from previous issue).

Ministry of Finance Treasury Notes:

5-year GEL 20.0mn (US$ 7.3mn) T-Notes of Ministry of Finance were sold at the auction held at NBG on November 29, 2017. The weighted average yield was fixed at 7.778%. The nearest treasury security auction is scheduled for December 6, 2017, where GEL 20.0mn nominal value 1-year T-Bills will be sold.