Georgia: Weekly Market Watch

Georgia: Weekly Market Watch

Georgia: Weekly Market Watch

The FINANCIAL -- Economy

Real GDP up 4.3% y/y in April 2016

Georgia’s real GDP grew 4.3% y/y in April 2016 after growing 3.4% in March, according to GeoStat’s rapid estimates. In 4M16, output growth averaged 2.8% y/y (growth was 2.7% y/y in 4M15). Monthly rapid estimates are based on VAT turnover, fiscal and monetary statistics.

International arrivals up 14.9% y/y in May 2016

International arrivals increased 14.9% y/y to 0.52mn persons in May 2016, according to the Ministry of Internal Affairs. Increased arrivals from Turkey (+6.8% y/y, 25.8% of total), Azerbaijan (+18.6% y/y, 21.4% of total), Armenia (+3.9% y/y, 21.2% of total), and Russia (+18.7% y/y, 16.2% of total) contributed the most to the growth. In 5M16, total arrivals increased 15.5% y/y to 2.12mn persons.

Inflation rate at 2.1% y/y and -0.4% m/m in May 2016

Annual CPI inflation rate retreated to 2.1% y/y in May 2016 from 3.2% in previous month, according to GeoStat. Overall price changes were driven by price increases in alcoholic beverages and tobacco (+12.6% y/y, +0.77ppts), health (+5.7% y/y, +0.55ppts), and food and non-alcoholic beverages (+1.4% y/y, +0.40ppts) categories. Meanwhile, prices in the transport category decreased (-8.3% y/y, -1.01ppts), as prices were down for the purchase of vehicles.

On a monthly basis, there was 0.4% deflation in May 2016, after prices falling 0.6% in April. Price decreases in food and non-alcoholic beverages (-1.1% m/m, -0.35ppts), and alcoholic beverages and tobacco (-1.0% m/m, -0.06ppts) and price increase in transport (+0.6% m/m, +0.07ppts) categories were the major drivers of the monthly inflation dynamics.

Tax revenues up 8.3% y/y in May 2016

Consolidated budget tax revenues were up 8.3% y/y to GEL 725mn in May 2016. In 5M16, consolidated budget tax revenues stood at GEL 3.4bn (+8.3% y/y) and accounted for 39.3% of annual plan.

Fixed income

Corporate Eurobonds: Bank of Georgia Eurobonds (GEBGG) closed at 4.0% yield, trading at 103.9 (-0.2% w/w). GOGC Eurobonds (GEOROG) were trading at 102.0 (-0.1% w/w), yielding 4.9%. Georgian Railway Eurobonds (GRAIL) traded at a premium at 110.5 (+0.5% w/w), yielding 5.7%. 

Georgian Sovereign Eurobonds (GEORG) closed at 110.5 (-0.1% w/w) at 4.4% yield to maturity. Georgia Eurobonds, YTM (%)

Equities

BGEO Group (BGEO LN) shares closed at GBP 25.00/share (-2.99% w/w and +11.21% m/m). More than 396k shares traded in the range of GBP 24.64 – 26.06/share. Average daily traded volume was 68k in the last 4 weeks, more than in the previous month. FTSE 250 Index, of which BOGH is a constituent, declined 0.99% w/w and gained 1.98% m/m, respectively. The volume of BOGH shares traded was at 1.00% of its capitalization. 

 TBC Bank (TBCB LI) closed the week at US$ 12.80 (-1.54% w/w and +21.90% m/m). More than 51k GDRs changed hands in the range of GBP 12.30 – 13.50//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 2.54/share (+0.69% w/w and +28.16% m/m). More than 453k shares were traded in the range of GBP 2.49 – 2.65/share. Average daily traded volume was 52k in the last 4 weeks. The volume of GHG shares traded was at 0.15% of its capitalization. BGEO Group PLC (BGEO LN)

Money Market

Refinancing loans: National Bank of Georgia (NBG) issued 7-day refinancing loans of GEL 530mn (US$ 247.5mn).

Certificates of deposit: NBG sold 184-day, GEL 20mn (US$ 9.3mn) certificates of deposit, with an average yield of 7.17% (down 90bps from previous issue).

Ministry of Finance Treasury Notes: 1-year GEL 25.0mn (US$ 11.7mn) T-Bills of Ministry of Finance were sold at the auction held at NBG on June 1, 2016. The weighted average yield was fixed at 7.192%. The nearest treasury securities auction is scheduled for June 8, 2016, where GEL 20mn nominal value 2-year T-Notes will be sold.