Georgia: Weekly Market Watch 

Georgia: Weekly Market Watch 

Georgia: Weekly Market Watch 

The FINANCIAL -- Economy

Trade deficit up 5.0% y/y in April 2016

In April 2016, exports decreased 11.1% y/y to US$ 165.3mn, imports fell 0.5% y/y to US$ 549.3mn (excluding one-offs), and the trade deficit widened 5.0% y/y to US$ 384mn, according to GeoStat. Reduced ferroy-alloys exports (-29.2% y/y) and car re-exports (-28.6% y/y) were the major commodities weighing on export growth, while copper ores (+18.1% y/y), nuts (+21.2% y/y), wine (+21.5% y/y), gold (+40.1% y/y), and spirituous beverages (+35.9% y/y) posted increases in April.

Petroleum (-23.7% y/y), cars (-9.7% y/y), pharmaceuticals (+0.7% y/y, excluding one-offs), gases (-22.2% y/y), and copper ores (-39.5% y/y) represented the top 5 imported commodities in April 2015.

In 4M16, trade deficit was down 14.0% y/y to US$ 1.42bn as exports fell 11.7% y/y to US$ 608.1mn and imports fell 13.7% y/y to US$ 2.02bn (excluding one-offs).

Producer price index down 1.2% m/m and down 1.6% y/y in April 2016

PPI for industrial goods decreased 1.2% m/m in April 2016, according to GeoStat. A 1.3% decline in manufacturing prices contributed the most to the overall index change. Prices were down for manufacture of food products, beverages and tobacco (-1.3% m/m), and for manufacture of machinery and equipment (-21.8% m/m). Prices were also down for mining and quarrying (-2.6% m/m).

Annual PPI decreased 1.6% in April 2016 after growing 1.9% in March. Falling prices in manufacturing contributed most to the overall index change (-4.3% y/y, -3.58ppts) as prices were down for manufacture of food products, beverages and tobacco, and manufacture of basic and fabricated metals. Mining and quarrying prices were down 12.5% y/y while supply of electricity, gas and water prices were up 20.5% y/y.

NBG buys US$ 100mn

Last week, NBG intervened on the FX market 4 times and purchased US$ 100mn, aimed at curbing the appreciation of the national currency. Overall, NBG bought total of US$ 195mn at 11 interventions during March 17 - May 20. GEL strengthened 2.3% w/w and 10.4% YTD against the US$.

Fixed income

Corporate Eurobonds: Bank of Georgia Eurobonds (GEBGG) closed at 3.6% yield, trading at 104.5 (+0.1% w/w). GOGC Eurobonds (GEOROG) were trading at 101.9 (-0.3% w/w), yielding 4.9%. Georgian Railway Eurobonds (GRAIL) traded at a premium at 109.6 (+0.6% w/w), yielding 5.9%. Georgian Sovereign Eurobonds (GEORG) closed at 110.8 (-0.1% w/w) at 4.4% yield to maturity. Georgia Eurobonds, YTM (%)

Equities

BGEO Group (BGEO LN) shares closed at GBP 23.99/share (+2.87% w/w and +13.59% m/m). More than 314k shares traded in the range of GBP 22.85 – 24.50/share. Average daily traded volume was 52k in the last 4 weeks, more than in the previous month. FTSE 250 Index, of which BOGH is a constituent, gained 1.57% w/w and lost 0.63% m/m, respectively. The volume of BOGH shares traded was at 0.80% of its capitalization. 

 TBC Bank (TBCB LI) closed the week at US$ 12.00 (+7.14% w/w and +20.00% m/m). More than 78k GDRs changed hands in the range of GBP 11.25 – 12.00//GDR. Average daily traded volume was 11k in the last 4 weeks, more than in the previous month.

Georgia Healthcare Group (GHG LN) shares closed at GBP 2.32/share (+18.97% w/w and +28.89% m/m). More than 266k shares were traded in the range of GBP 2.02 – 2.55/share. Average daily traded volume was 24k in the last 4 weeks. The volume of GHG shares traded was at 0.09% of its capitalization. BGEO Group PLC (BGEO LN)

Equities

BGEO Group (BGEO LN) shares closed at GBP 23.99/share (+2.87% w/w and +13.59% m/m). More than 314k shares traded in the range of GBP 22.85 – 24.50/share. Average daily traded volume was 52k in the last 4 weeks, more than in the previous month. FTSE 250 Index, of which BOGH is a constituent, gained 1.57% w/w and lost 0.63% m/m, respectively. The volume of BOGH shares traded was at 0.80% of its capitalization. 

 TBC Bank (TBCB LI) closed the week at US$ 12.00 (+7.14% w/w and +20.00% m/m). More than 78k GDRs changed hands in the range of GBP 11.25 – 12.00//GDR. Average daily traded volume was 11k in the last 4 weeks, more than in the previous month.

Georgia Healthcare Group (GHG LN) shares closed at GBP 2.32/share (+18.97% w/w and +28.89% m/m). More than 266k shares were traded in the range of GBP 2.02 – 2.55/share. Average daily traded volume was 24k in the last 4 weeks. The volume of GHG shares traded was at 0.09% of its capitalization. BGEO Group PLC (BGEO LN)

Money Market

Refinancing loans: National Bank of Georgia (NBG) issued 7-day refinancing loans of GEL 680mn (US$ 314.4mn).

Certificates of deposit: NBG sold 91-day, GEL 20mn (US$ 9.1mn) certificates of deposit, with an average yield of 7.50% (down 102bps from previous issue).

Ministry of Finance Treasury Notes: 1-year GEL 45.0mn (US$ 20.7mn) T-Bills of Ministry of Finance were sold at the auction held at NBG on May 18, 2016. The weighted average yield was fixed at 7.986%. The nearest treasury securities auction is scheduled for June 1, 2016, where GEL 25mn nominal value 1-year T-Bills will be sold.

Provided exclusively to The FINANCIAL by Galt & Taggart