Weekly Market Watch by Galt & Taggart

Weekly Market Watch by Galt & Taggart

The FINANCIAL -- Economy

Real GDP grew 2.1% y/y in April 2017 

Georgia’s economy expanded 2.1% y/y in April 2017, after growing 5.3% y/y in previous month, according to GeoStat’s rapid estimates. Overall, in 4M17 GDP growth was 4.2% y/y. Monthly rapid estimates are based on VAT turnover, fiscal and monetary statistics.

Inflation was 6.6% y/y and flat m/m in May 2017

The annual CPI inflation was 6.6% in May 2017 after 6.1% inflation in previous month, according to GeoStat. Core inflation was 3.7% in May, up from 3.3% in previous month. Overall price changes were driven by price increases in food and non-alcoholic beverages (+8.3% y/y, +2.53ppts), transport (+17.5% y/y, +2.13ppts), and alcoholic beverages and tobacco (+15.0% y/y, +0.97ppts) categories. On a monthly basis, prices were flat in May 2017. Price increase in transport (+0.5% m/m, +0.07ppts) and price increase in miscellaneous goods and services (+1.8% m/m, +0.08ppts) categories were the major drivers of monthly Inflation dynamics.

Fixed income

Corporate Eurobonds: BGEO Group Eurobonds (BGEOLN) closed at 5.7% yield, trading at 101.4 (+0.1% w/w). GOGC Eurobonds (GEOROG) were trading at 105.6 (+0.2% w/w), yielding 5.1%. Georgian Railway Eurobonds (GRAIL) traded at a premium at 110.8 (+0.1% w/w), yielding 5.3%. 

Georgian Sovereign Eurobonds (GEORG) closed at 111.6 (+0.2% w/w) at 3.6% yield to maturity.

Equities

BGEO Group (BGEO LN) shares closed at GBP 36.91/share (-1.42% w/w and +2.19% m/m). More than 421k shares traded in the range of GBP 36.46 – 37.57/share. Average daily traded volume was 79k in the last 4 weeks. FTSE 250 Index, of which BGEO is a constituent, lost 0.11% w/w and gained 1.00% m/m. The volume of BGEO shares traded was at 1.07% of its capitalization.

TBC Bank Group (TBCG LN) closed the week at GBP 17.55 (+3.54% w/w and +7.01% m/m). More than 544k shares changed hands in the range of GBP 16.65 – 17.70/share. Averaged daily traded volume was 71k in the last 4 weeks.

Georgia Healthcare Group (GHG LN) shares closed at GBP 3.50/share (+0.57% w/w and -5.41% m/m). More than 124k shares were traded in the range of GBP 3.43 – 3.58/share.  Average daily traded volume was 589k in the last 4 weeks. The volume of GHG shares traded was at 0.09% of its capitalization.

Money Market

Refinancing loans: National Bank of Georgia (NBG) issued 7-day refinancing loans of GEL 1,250mn (US$ 516.9mn). 

Ministry of Finance Treasury Notes: 5-year GEL 20.0mn (US$ 8.2mn) T-Notes of Ministry of Finance were sold at the auction held at NBG on May 31, 2017. The weighted average yield was fixed at 8.378%. The nearest treasury security auction is scheduled for June 7, 2017, where GEL 50.0mn nominal value 1-year T-Bills will be sold.