Economy

Economy

Economy

The FINANCIAL -- Trade deficit down in November 2018

Exports increased 19.6% y/y to US$ 283.3mn in November 2018, while imports were down 3.1% y/y to US$ 738.0mn and the trade deficit decreased by 13.3% y/y to US$ 454.7mn, according to GeoStat’s preliminary figures. In 11M18, trade deficit was up 13.3% y/y to US$ 5.3bn as exports increased by 24.0% y/y to US$ 3.0bn and imports were up 16.8% y/y to US$ 8.3bn. Detailed foreign trade statistics will be available on December 19, 2018.

Money transfers up 9.0% y/y in November 2018

Money transfers increased 9.0% y/y to US$ 133.1mn in November 2018, after growing 11.6% y/y in the previous month, according to NBG. From major remitting countries, money transfers were up from Italy (+28.3% y/y, 12.4% of total), Greece (+17.3% y/y, 11.0% of total), USA (+13.2% y/y, 9.8% of total) and Israel (+13.7% y/y, 9.8% of total), while remittances were down from Russia (-3.4% y/y, 28.4% of total) and Turkey (-20.5% y/y, 5.7% of total). Overall, in 11M18 money transfers were up 14.9% y/y to US$ 1.4bn.

FDI down in 3Q18

FDI decreased by 48.2% y/y to US$ 322.6mn in 3Q18, according to GeoStat’s preliminary figures. Completion stage of PB gas pipeline construction, ownership transfer from non-resident to resident units and reduction of liabilities to non-resident direct investors were main reasons behind the FDI drop. The manufacturing sector was the largest FDI recipient at US$ 56.5mn (+28.5% y/y), followed by transport and communication sector at US$ 54.5mn (-68.4% y/y), energy sector at US$ 46.3mn (-49.9% y/y), real estate at US$ 38.4mn (+20.7% y/y) and hotels and restaurants at US$ 36.0mn (+21.3% y/y). Netherlands topped the list of investors with US$ 49.7mn (-40.8% y/y), followed by South Korea at US$ 40.2mn (+161.2% y/y), Azerbaijan at US$ 33.1mn (-78.0% y/y) and Turkey at US$ 32.1mn (-77.2% y/y).

NBG purchased US$ 25.0mn

On 10 and 12 December 2018, the NBG intervened on the FX market and purchased US$ 10.0mn and US$ 15.0mn, respectively. Overall, during Apr-Dec 2018, the NBG purchased US$ 162.5mn on its 15 FX auctions.

Fixed income

Corporate Eurobonds: Bank of Georgia Group Eurobonds (GEBGG) closed at 6.5% yield, trading at 97.9 (-0.2% w/w). Bank of Georgia GEL-denominated Eurobonds (GEBGG) were trading at 99.8 (unchanged w/w), yielding 11.2%. Georgia Capital Eurobonds (GEOCAP) were trading at 91.3 (-0.5% w/w), yielding 8.2%.

GOGC Eurobonds (GEOROG) were trading at 100.7 (+0.1% w/w), yielding 6.4%. Georgian Railway Eurobonds (GRAIL) traded at a premium at 104.1 (-0.1% w/w), yielding 6.5%.

Georgian Sovereign Eurobonds (GEORG) closed at 105.4 (+0.1% w/w) at 4.4% yield to maturity.

Equities

Bank of Georgia Group (BGEO LN) shares closed at GBP 13.47/share (-0.46% w/w and -15.56% m/m). More than 388k shares traded in the range of GBP 13.06 – 14.03/share. Average daily traded volume was 74k in the last 4 weeks. FTSE 250 Index, of which BGEO is a constituent, lost 0.94% w/w and lost 6.52% m/m. The volume of BGEO shares traded was at 0.79% of its capitalization.

Georgia Capital (CGEO LN) shares closed at GBP 10.00/share (-6.96% w/w and -14.56% m/m). More than 126k shares traded in the range of GBP 10.00 – 10.80/share. Average daily traded volume was 46 in the last 4 weeks. The volume of CGEO shares traded was at 0.33% of its capitalization.

TBC Bank Group (TBCG LN) closed the week at GBP 14.06 (-4.22% w/w and -14.79% m/m). More than 157k shares changed hands in the range of GBP 13.68 – 14.52/share. Average daily traded volume was 24k in the last 4 weeks. The volume of TBCG shares traded was at 0.29% of its capitalization.

Georgia Healthcare Group (GHG LN) shares closed at GBP 2.20/share (unchanged w/w and -7.56% m/m). More than 490k shares were traded in the range of GBP 2.10 – 2.23/share. Average daily traded volume was 52k in the last 4 weeks. The volume of GHG shares traded was at 0.37% of its capitalization. BGEO Group PLC (BGEO LN)

Money Market

Refinancing loans: National Bank of Georgia (NBG) issued 7-day refinancing loans of GEL 1,570mn (US$ 590.4mn).

Ministry of Finance Benchmark Bonds: 2-year GEL 40.0mn (US$ 15.0mn) Benchmark Bonds of Ministry of Finance were sold at the auction held at NBG on December 12, 2018. The weighted average yield was fixed at 7.253%. The nearest treasury security auction is scheduled for December 26, 2018, where GEL 30.0mn nominal value 5-year Benchmark Bonds will be sold.

Ministry of Finance T-Bills: 182-days GEL 20.0mn (US$ 7.5mn) T-Bills of Ministry of Finance were sold at the auction held at NBG on December 12, 2018. The weighted average yield was fixed at 7.018%.