Weekly Market Watch

Weekly Market Watch

Weekly Market Watch

The FINANCIAL -- ECONOMY -- Exports up 17.1% y/y in September 2018 In September 2018, exports increased by 17.1% y/y to US$ 301.7mn, imports were up 3.3% y/y to US$ 711.4mn and the trade de􀂿 cit narrowed 4.9% y/y to US$ 409.7mn, according to GeoStat.

In September 2018, copper (+63.9% y/y), ferroalloys (+52.5% y/y), cars (+36.8% y/y), cigarettes (+213.3% y/y) and wine (-3.3% y/y) were the top 5 exported commodities.

A 25.6% of exports was directed to the EU (+25.4% y/y), 45.1% to the CIS (+22.1% y/y) and 29.3% to other countries (+4.6% y/y). In September 2018, petroleum (-4.0% y/y), cars (-7.6% y/y), copper (+41.7% y/y), pharmaceuticals (-11.9% y/y) and phones (+9.5% y/y) represented the top 5 imported commodities. Overall, in 9M18, the trade de􀂿 cit was up 15.5% y/y at US$ 4.2bn as exports were up 25.7% y/y to US$ 2.4bn and imports increased by 19.1% y/y to US$ 6.7bn. Money transfers up 5.6% y/y in September 2018 In September 2018, money transfers increased 5.6% y/y to US$ 131.3mn, after growing 11.4% y/y in the previous month, according to NBG. From major remitting countries,
money transfers were up from Italy (+25.9% y/y, 12.5% of total), USA (+12.9% y/y, 10.8% of total), Greece (+8.7% y/y, 10.8% of total) and Israel (+7.6% y/y, 9.5% of total), while remittances were down from Russia (-7.5% y/y, 28.7% of total) and Turkey (-24.1% y/y, 5.5% of total).

Overall, in 9M18 money transfers were up 16.0% y/y to US$ 1.2bn. Producer price index up 5.5% y/y in September 2018 Annual PPI for industrial
goods was up 5.5% in September 2018, according to GeoStat. Rising prices in manufacturing (+4.5% y/y) and supply of electricity, gas and water
(+14.1% y/y) contributed the most to the overall index change.

FIXED INCOME

Corporate Eurobonds: Bank of Georgia Group Eurobonds (GEBGG) closed at 6.5% yield, trading at 98.1 (+0.2% w/w). Bank of Georgia GELdenominated Eurobonds (GEBGG) were trading at 100.5 (unchanged w/w), yielding 10.7%. Georgia Capital Eurobonds (GEOCAP) were trading at 92.3 (-0.1% w/w), yielding 7.9%. GOGC Eurobonds (GEOROG) were trading at 103.0 (unchanged w/w), yielding 5.5%. Georgian Railway Eurobonds (GRAIL) traded at a premium at 106.1 (unchanged w/w), yielding 5.9%. Georgian Sovereign Eurobonds (GEORG) closed at 104.9 (-0.2% w/w) at 4.8% yield to maturity.

EQUITIES

Bank of Georgia Group (BGEO LN) shares closed at GBP 16.08/share (+0.20% w/w and -12.38% m/m). More than 280k shares traded in the range of GBP 15.31 – 17.05/share. Average daily traded volume was 60k in the last 4 weeks. FTSE 250 Index, of which BGEO is a constituent, lost
0.79% w/w and lost 8.18% m/m. The volume of BGEO shares traded was at 0.57% of its capitalization. Georgia Capital (CGEO LN) shares closed at GBP 11.46/share (-1.02% w/w and +10.62% m/m). More than 424k shares traded in the range of GBP 11.35 – 11.70/share. Average daily traded volume was 62k in the last 4 weeks. The volume of CGEO shares traded was at 1.11% of its capitalization. TBC Bank Group (TBCG LN)
closed the week at GBP 15.02 (-8.33% w/w and -7.66% m/m). More than 149k shares changed hands in the range of GBP 15.02 – 16.58/share. Average daily traded volume was 24k in the last 4 weeks. The volume of TBCG shares traded was at 0.28% of its capitalization. Georgia Healthcare Group (GHG LN) shares closed at GBP 2.20/ share (+0.92% w/w and -1.12% m/m). More than 157k shares were traded in the range of GBP 2.14 – 2.30/share. Average daily traded volume was 25k in the last 4 weeks. The volume of GHG shares traded was at 0.12% of its capitalization

MONEY MARKET

Re􀂿 nancing loans: National Bank of Georgia (NBG) issued 7-day re􀂿 nancing loans of GEL 1,380mn (US$ 514.2mn). Ministry of Finance Benchmark Bonds: 10- year GEL 25.0mn (US$ 9.3mn) Benchmark Bonds of Ministry of Finance were sold at the auction held at NBG on October 17, 2018. The weighted average yield was 􀂿 xed at 8.822%. The nearest treasury security auction is scheduled for October 24, 2018, where GEL 30.0mn nominal value 5-year Benchmark Bonds will be sold.