Georgian Weekly Market Watch (January 21 – January 25)

The FINANCIAL — Last week, London traded Bank of Georgia Holdings (BGEO LN) share price increased 0.4% to GBP 12.38. During the week, up to 197,000 shares were traded in the range of GBP 12.20-12.75.

In the debt world, Georgia Sovereign (GEORG, +0.9% to 119.3), Georgian Oil and Gas Corporation (GEOROG, +0.1% to 105.6), Georgian Railway (GRAIL 07/22, +0.5% to 118.7) and Bank of Georgia (GEBGG, +0.5% to 104.6) Eurobonds prices were all up.

On the Georgian Stock Exchange, only Liberty Bank (BANK GG) shares were traded closing at GEL 0.0065 (unchanged), while the BG Index was almost unchanged at 485.0.

Money market — Last week, the National Bank of Georgia (NBG) issued 7-day refinancing loans in the amount of GEL 91mn with an average yield amounting 5.25% (down 1bps). NBG also sold 182-day, GEL 30mn Certificates of Deposits last week. The average yield was 6.02% (up 4bps).

As for the treasury debt, Ministry of Finance sold five-year T-notes in the amount of GEL 10mn with the yield ranging between 8.27-8.43%. Average yield equalled 8.35% (down 34bps). The next one-year T-bills auction is planned for February 13 with total estimated emission of GEL 15mn.

Georgia’s banking sector lending up 2% m/m in December — In December, Georgian commercial banks’ total assets added 2.9% m/m to GEL 14.4bn (US$ 8.7bn), while total equity grew by 3.5% m/m to GEL 2.4bn (US$ 1.4bn). Lending increased by 1.6% m/m to GEL 8.7bn (US$ 5.3bn) and non-bank deposits grew by 2.7% m/m to GEL 7.6bn (US$ 4.6bn). The banking sector posted an aggregate monthly net profit of GEL 18.2mn (US$ 11mn) in December.

FY12 merchandise trade deficit increased by 12% y/y — Georgia’s FY12 foreign trade exports grew by 9% y/y to US$ 2.4bn, while imports added 11% y/y to US$ 7.8bn, widening the foreign trade deficit by 12% y/y to US$ 5.5bn. Azerbaijan accounted for the largest share of Georgia’s exports (26%), followed by Armenia (11%) and the U.S. (10%). On the import side, trade was dominated by flows from Turkey (18%), Azerbaijan (8%) and Ukraine (8%).