The FINANCIAL — Economy
Trade deficit down 4.6% y/y in 1H16, excluding one-offs
In June 2016, imports increased 3.0% y/y to US$ 625.0mn (excluding donated C-hepatitis medication imports totaling US$ 840mn), exports fell 15.5% y/y to US$ 167.9mn, and the trade deficit widened 12.0% y/y to US$ 457.1mn, according to GeoStat’s preliminary figures. In 1H16, the trade deficit was down 4.6% y/y to US$ 2.3bn, excluding one-offs. Detailed foreign trade statistics will be available on July 19, 2016.
Money transfers up 4.9% y/y in June 2016
In June 2016, money transfers increased 4.9% y/y to US$ 105.4mn, according to NBG. Reduced remittances from Russia (-13.8% y/y, 34.1% of total), and Greece (-4.2% y/y, 12.5% of total) were the only major countries negatively affecting growth of remittances. Money transfers grew robustly from all other remitting countries: Italy (+33.0% y/y), USA (+24.4% y/y), Turkey (+16.4% y/y), Israel (+87.0% y/y), and Spain (+37.7% y/y). Overall, money transfers were down by just 1.6% y/y to US$ 530.2mn in 1H16.
Producer price index down 2.0% m/m and down 6.0% y/y in June 2016
PPI for industrial goods decreased 2.0% m/m in June 2016, according to GeoStat. A 2.6% price decrease for manufacturing contributed to most to the overall index change. Prices were down for manufacturing of the following: basic and fabricated metals (-4.8% m/m), food products, beverages and tobacco (-1.5% m/m), chemical products (-7.5% m/m), and textiles (-25.6% m/m). Prices were up for mining and quarrying (+4.6% m/m).
Annual PPI decreased 6.0% in June 2016, after falling 2.8% in May 2016. Falling prices in manufacturing contributed most to the overall index change (-9.0% y/y, -7.58ppts) as prices were down for manufacture of basic and fabricated metals, food products, beverages and tobacco and for chemical products. Meanwhile, supply of electricity, gas and water prices were up 17.6% y/y.
Fixed income
Corporate Eurobonds: Bank of Georgia Eurobonds (GEBGG) closed at 3.3% yield, trading at 104.1 (-0.6% w/w). GOGC’s Eurobonds (GEOROG 05/17) were trading at 101.9 (-0.1% w/w), yielding 4.4% and (GEOROG 04/21) were trading at 104.4 (+0.4% w/w), yielding 5.7%. Georgian Railway Eurobonds (GRAIL) traded at a premium at 111.4 (+0.2% w/w), yielding 5.5%.
Georgian Sovereign Eurobonds (GEORG) closed at 111.5 (+0.6% w/w) at 4.2% yield to maturity.
Equities
BGEO Group (BGEO LN) shares closed at GBP 27.39/share (+4.22% w/w and +13.18% m/m). More than 258k shares traded in the range of GBP 26.19 – 28.21/share. Average daily traded volume was 74k in the last 4 weeks, less than in the previous month. FTSE 250 Index, of which BGEO is a constituent, gained 3.19% w/w and gained 2.42% m/m. The volume of BGEO shares traded was at 0.66% of its capitalization.
TBC Bank (TBCB LI) closed the week at US$ 13.40 (+3.88% w/w and +3.08% m/m). More than 245k GDRs changed hands in the range of US$ 12.70 – 13.40/GDR. Average daily traded volume was 22k in the last 4 weeks, less than in the previous month.
Georgia Healthcare Group (GHG LN) shares closed at GBP 3.40/share (+9.32% w/w and +22.74% m/m). More than 203k shares were traded in the range of GBP 3.14 – 3.50/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.
Money Market
Refinancing loans: National Bank of Georgia (NBG) issued 7-day refinancing loans of GEL 570mn (US$ 242.3mn).
Certificates of deposit: NBG sold 91-day, GEL 20mn (US$ 8.5mn) certificates of deposit, with an average yield of 6.47% (up 2bps from previous issue).
Ministry of Finance Treasury Notes: 1-year GEL 45.0mn (US$ 19.2mn) T-Bills of Ministry of Finance were sold at the auction held at NBG on July 13, 2016. The weighted average yield was fixed at 6.788%. The nearest treasury securities auction is scheduled for July 20, 2016, where GEL 20mn nominal value 5-year T-Notes will be sold.
