Economy - Inflation was 1.9% y/y and 0.7% m/m in November 2018

Economy - Inflation was 1.9% y/y and 0.7% m/m in November 2018

Economy - Inflation was 1.9% y/y and 0.7% m/m in November 2018

The FINANCIAL -- Annual CPI inflation was 1.9% in November 2018 down from 2.3% in previous month, according to Geostat. Core inflation was 1.3% in November 2018 down from 1.7% recorded in previous month.

Annual price changes were driven by price increases in transport (+3.8% y/y, +0.49ppts), healthcare (+5.5% y/y, +0.46ppts), alcoholic beverages and tobacco (+4.6% y/y, +0.31ppts) categories. On a monthly basis, there was 0.7% inflation in November 2018 mostly affected by price increase in food and non-alcoholic beverages (+1.4% m/m, +0.41ppts).

Tourist arrivals up 14.0% y/y in November 2018

Total international visits to Georgia increased 5.8% y/y to 0.49mn in November 2018, according to the Ministry of Internal Affairs. A 14.0% y/y increase in tourist arrivals (0.38mn trips, 63.3% of total) drove the growth. Out of top countries, in November 2018, international visitors continued to increase from Russia (+25.2% y/y), Azerbaijan (+5.4% y/y) and Iran (+18.2% y/y) while visitors were down from Armenia (-1.3% y/y) and Turkey (-17.4% y/y). Total international visitors stood at 8.1mn (+10.6% y/y) in 11M18, while tourist arrivals stood at 4.5mn (+17.2% y/y).

International reserves stood at US$ 3.1bn in November 2018

Gross international reserves were up 3.0% y/y to US$ 3.1bn and were flat m/m in November 2018 according to NBG. Change in reserves was attributed to FX auctions (total purchase of US$ 20.0mn in November), government FX operations and/or asset revaluation.

NBG purchased US$ 5.0mn

On 6 December 2018, the NBG intervened on the FX market and purchased US$ 5.0mn to curb GEL’s appreciation. Overall, during Apr-Dec 2018, the NBG purchased US$ 137.5mn on its 13 FX auctions.

Fixed income

Corporate Eurobonds: Bank of Georgia Group Eurobonds (GEBGG) closed at 6.5% yield, trading at 98.1 (-0.1% 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 91.8 (-0.2% w/w), yielding 8.1%.

GOGC Eurobonds (GEOROG) were trading at 100.6 (-0.2% w/w), yielding 6.5%. Georgian Railway Eurobonds (GRAIL) traded at a premium at 104.2 (-0.5% w/w), yielding 6.4%.

Georgian Sovereign Eurobonds (GEORG) closed at 105.3 (+0.2% w/w) at 4.5% yield to maturity.

Equities

Bank of Georgia Group (BGEO LN) shares closed at GBP 13.53/share (-1.24% w/w and -20.12% m/m). More than 363k shares traded in the range of GBP 13.03 – 14.00/share. Average daily traded volume was 68k in the last 4 weeks. FTSE 250 Index, of which BGEO is a constituent, lost 3.45% w/w and lost 6.81% m/m. The volume of BGEO shares traded was at 0.74% of its capitalization.

Georgia Capital (CGEO LN) shares closed at GBP 10.75/share (-0.92% w/w and -13.65% m/m). More than 127k shares traded in the range of GBP 10.52 – 11.00/share. Average daily traded volume was 46 in the last 4 weeks. The volume of CGEO shares traded was at 0.34% of its capitalization.

TBC Bank Group (TBCG LN) closed the week at GBP 14.68 (-1.87% w/w and -11.88% m/m). More than 70k shares changed hands in the range of GBP 13.88 – 15.32/share. Average daily traded volume was 21k in the last 4 weeks. The volume of TBCG shares traded was at 0.13% of its capitalization.

Georgia Healthcare Group (GHG LN) shares closed at GBP 2.20/share (-4.56% w/w and -8.33% m/m). More than 155k shares were traded in the range of GBP 2.20 – 2.34/share. Average daily traded volume was 24k in the last 4 weeks. The volume of GHG shares traded was at 0.12% of its capitalization. BGEO Group PLC (BGEO LN)

Money Market

Refinancing loans: National Bank of Georgia (NBG) issued 7-day refinancing loans of GEL 1,360mn (US$ 508.7mn).

Ministry of Finance T-Bills:

1-year GEL 40.0mn (US$ 14.9mn) T-Bills of Ministry of Finance were sold at the auction held at NBG on December 5, 2018. The weighted average yield was fixed at 7.160%. The nearest treasury security auction is scheduled for December 12, 2018, where GEL 40.0mn nominal value 2-year Benchmark Bonds and GEL 20.0mn nominal value 182-days T-Bills will be sold.