Weekly Market Watch by Galt & Taggart

Weekly Market Watch by Galt & Taggart

Weekly Market Watch by Galt & Taggart

The FINANCIAL -- Economy -- Exports up 16.6% y/y in August 2018. In August 2018, exports increased by 16.6% y/y to US$ 275.6mn, imports were up 8.3% y/y to US$ 761.1mn and the trade deficit widened 4.1% y/y to US$ 486.5mn, according to GeoStat.

In August 2018, copper (+28.9% y/y), cars (+96.8% y/y), ferro-alloys (-10.8% y/y), wine (+9.0% y/y) and cigarettes (+327.3% y/y) were the top 5 exported commodities. A 13.9% of exports was directed to the EU (-38.3% y/y), 55.4% to the CIS (+47.2% y/y) and 30.7% to other countries (+19.8% y/y).

In August 2018, petroleum (+41.5% y/y), cars (+30.6% y/y), copper (-10.1% y/y), pharmaceuticals (+7.9% y/y) and cigarettes (+189.2% y/y) represented the top 5 imported commodities.

Overall, in 8M18, the trade deficit was up 17.9% y/y at US$ 3.8bn as exports were up 27.1% y/y to US$ 2.1bn and imports increased by 21.0% y/y to US$ 6.0bn.

Money transfers up 11.4% y/y in August 2018

In August 2018, money transfers increased 11.4% y/y to US$ 135.6mn, after growing 19.3% y/y in the previous month, according to NBG. From major remitting countries, money transfers were up from Russia (+2.9% y/y, 30.6% of total), Italy (+28.2% y/y, 12.0% of total), USA (+16.4% y/y, 11.0% of total), Israel (+20.3% y/y, 9.6% of total) and Greece (+9.8% y/y, 9.3% of total), while remittances were down from Turkey (-25.6% y/y, 5.4% of total). Overall, in 8M18 money transfers were up 17.5% y/y to US$ 1.0bn.

Producer price index up 6.6% y/y in August 2018

Annual PPI for industrial goods was up 6.6% in August 2018, according to GeoStat. Rising prices in manufacturing (+5.8% y/y) and supply of electricity, gas and water (+14.1% y/y) contributed the most to the overall index change.

NBG purchased US$ 10.0mn

On September 19, 2018, the NBG intervened on the FX market and purchased US$ 10.0mn. Overall, during April-September 2018, the NBG purchased US$ 102.5mn on its 9 FX auctions.

Fixed income

Corporate Eurobonds: Bank of Georgia Group Eurobonds (GEBGG) closed at 6.4% yield, trading at 98.2 (unchanged w/w). Bank of Georgia GEL-denominated Eurobonds (GEBGG) were trading at 100.5 (unchanged w/w), yielding 10.7%. Georgia Capital Eurobonds (GEOCAP) were trading at 92.1 (unchanged% w/w), yielding 7.9%.

GOGC Eurobonds (GEOROG) were trading at 103.2 (unchanged w/w), yielding 5.4%. Georgian Railway Eurobonds (GRAIL) traded at a premium at 106.0 (unchanged w/w), yielding 6.0%.

Georgian Sovereign Eurobonds (GEORG) closed at 105.1 (-0.2% w/w) at 4.6% yield to maturity. Georgia Eurobonds, YTM (%)

Equities

Bank of Georgia Group (BGEO LN) shares closed at GBP 18.79/share (+5.93% w/w and +10.36% m/m). More than 416k shares traded in the range of GBP 17.78 – 19.27/share. Average daily traded volume was 50k in the last 4 weeks. FTSE 250 Index, of which BGEO is a constituent, gained 0.97% w/w and lost 0.33% m/m. The volume of BGEO shares traded was at 0.85% of its capitalization.

Georgia Capital (CGEO LN) shares closed at GBP 11.09/share (+8.73% w/w and +6.66% m/m). More than 262k shares traded in the range of GBP 10.05 – 11.09/share. Average daily traded volume was 48k in the last 4 weeks. The volume of CGEO shares traded was at 0.68% of its capitalization.

TBC Bank Group (TBCG LN) closed the week at GBP 16.42 (+3.01% w/w and -0.48% m/m). More than 105k shares changed hands in the range of GBP 15.86 – 16.60/share. Average daily traded volume was 20k in the last 4 weeks. The volume of TBCG shares traded was at 0.19% of its capitalization.

Georgia Healthcare Group (GHG LN) shares closed at GBP 2.15/share (-8.70% w/w and -17.31% m/m). More than 92k shares were traded in the range of GBP 2.15 – 2.38/share. Average daily traded volume was 32k in the last 4 weeks. The volume of GHG shares traded was at 0.07% of its capitalization. BGEO Group PLC (BGEO LN)
Money Market

Refinancing loans: National Bank of Georgia (NBG) issued 7-day refinancing loans of GEL 1,290mn (US$ 492.8mn).

Ministry of Finance Benchmark Bonds:

The nearest treasury security auction is scheduled for September 26, 2018, where GEL 30.0mn nominal value 5-year Benchmark Bonds will be sold.

 

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