Weekly Market Watch by Galt & Taggart

The FINANCIAL -- Economy

FDI up 3.7% y/y in 1Q17

FDI in Georgia stood at US$ 403.3mn (+3.7% y/y) in 1Q17, according to GeoStat’s preliminary figures. Similar to previous quarters, the transport and communications sector was the largest FDI recipient at US$ 141.1mn (-30.1% y/y, 35.0% of total) in 1Q17, followed by the real estate at US$ 80.3mn (+277.0% y/y, 19.9% of total), and the financial sector at US$ 79.6mn (+37.8% y/y, 19.7% of total). Azerbaijan topped the list of investors with US$ 97.3mn, followed by Turkey at US$ 81.5mn, UK at US$ 80.1mn, and United Arab Emirates at US$ 38.7mn. 

Tourist arrivals up 19.6% y/y in May 2017 

Total international arrivals to Georgia increased 5.7% y/y to 0.55mn visitors in May 2017, according to the Ministry of Internal Affairs. Arrival growth was mainly driven by surge in tourist arrivals increasing 19.6% y/y to 0.25mn persons (44.4% of total) in May after posting a 29.7% y/y growth in April 2017. Out of top countries by arrivals, in May 2017, visitors continued to increase from Armenia (+8.9% y/y), Russia (+16.8% y/y), Ukraine (+20.2% y/y) and Azerbaijan (+8.5% y/y), while arrivals were down from Turkey (-24.4% y/y). Arrivals from EU were up 13.0% y/y to over 28,000 visitors. In 5M17 international arrivals increased 9.7% y/y to 2.3mn visitors, while tourist arrivals increased 25.0% y/y to 0.98mn. 

International reserves up 10.0% y/y in May 2017

Gross international reserves were up 10.0% y/y to US$ 2.8bn in May 2017, while reserves were up 2.9% on monthly bases, according to NBG. There were no interventions in the FX market by NBG in May; The increase in reserves was related to government FX operations and/or asset revaluation.

Fixed income

Corporate Eurobonds: BGEO Group Eurobonds (BGEOLN) closed at 5.6% yield, trading at 101.9 (+0.5% w/w). GOGC Eurobonds (GEOROG) were trading at 105.6 (unchanged w/w), yielding 5.1%. Georgian Railway Eurobonds (GRAIL) traded at a premium at 110.7 (-0.1% w/w), yielding 5.3%. Bank Of Georgia Eurobonds (GEBGG) were trading at 100.5 (-0.2% w/w), yielding 10.8%. 

Georgian Sovereign Eurobonds (GEORG) closed at 111.9 (+0.2% w/w) at 3.5% yield to maturity.


BGEO Group (BGEO LN) shares closed at GBP 37.12/share (+0.57% w/w and +1.48% m/m). More than 450k shares traded in the range of GBP 35.51 – 37.22/share. Average daily traded volume was 78k in the last 4 weeks. FTSE 250 Index, of which BGEO is a constituent, lost 1.27% w/w and lost 0.35% 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 18.18 (+3.59% w/w and +10.18% m/m). More than 354k shares changed hands in the range of GBP 16.55 – 18.33/share. Averaged daily traded volume was 200k in the last 4 weeks.

Georgia Healthcare Group (GHG LN) shares closed at GBP 3.50/share (unchanged w/w and -5.41% m/m). More than 304k shares were traded in the range of GBP 3.40 – 3.68/share.  Average daily traded volume was 632k in the last 4 weeks. The volume of GHG shares traded was at 0.23% of its capitalization.

Money Market

Refinancing loans: National Bank of Georgia (NBG) issued 7-day refinancing loans of GEL 1,150mn (US$ 477.4mn). 

Ministry of Finance Treasury Notes: 1-year GEL 50.0mn (US$ 20.8mn) T-Bills of Ministry of Finance were sold at the auction held at NBG on June 7, 2017. The weighted average yield was fixed at 7.447%. The nearest treasury security auction is scheduled for June 14, 2017, where GEL 40.0mn nominal value 2-year T-Notes and GEL 20.0mn nominal value 182-days T-Bills  will be sold.





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