Weekly Market Watch

Weekly Market Watch

The FINANCIAL -- Economy

FDI at US$ 376mn in 1Q16, up 103.2% y/y

FDI in Georgia hit US$ 376mn (+103.2% y/y) in 1Q16, according to GeoStat’s preliminary figures. Similar to previous quarters, the transport and communications sector was the largest FDI recipient at US$ 200mn (+37.0% y/y, 53.2% of total) in 1Q, followed by financial sector at US$ 58mn (15.4% of total), and the construction sector at US$ 40mn (+90.5% y/y, 10.6% of total). Azerbaijan topped the list of investors with US$ 137mn, followed by Turkey at US$ 57mn, and United Kingdom at US$ 44mn.

Gross international reserves stood at US$ 2.6bn as of end-May 2016

Gross international reserves increased 7.4% y/y (+US$ 175.9mn) to US$ 2.6bn as of end-May 2016, according to NBG.  The growth was attributed to NBG’s FX interventions with a US$ 140mn purchase in May.

NBG buys US$ 63mn

Last week, NBG intervened on the FX market 2 times and purchased US$ 63mn, aimed at curbing the appreciation of the national currency. Overall, NBG bought total of US$ 258mn at 13 interventions during March 17 – June 9. GEL strengthened 0.6% w/w and 11.2% YTD against US$.

Fixed income

Corporate Eurobonds: Bank of Georgia Eurobonds (GEBGG) closed at 3.8% yield, trading at 104.1 (+0.2% w/w). GOGC Eurobonds (GEOROG) were trading at 101.9 (-0.1% w/w), yielding 4.8%. Georgian Railway Eurobonds (GRAIL) traded at a premium at 111.2 (+0.6% w/w), yielding 5.6%. 

Georgian Sovereign Eurobonds (GEORG) closed at 111.1 (+0.5% w/w) at 4.3% yield to maturity.Georgia Eurobonds, YTM (%)

Equities

BGEO Group (BGEO LN) shares closed at GBP 24.77/share (-0.92% w/w and +7.65% m/m). More than 384k shares traded in the range of GBP 24.60 – 26.28/share. Average daily traded volume was 81k in the last 4 weeks, more than in the previous month. FTSE 250 Index, of which BOGH is a constituent, declined 1.42% w/w and gained 0.61% m/m, respectively. The volume of BOGH shares traded was at 0.97% of its capitalization. 

 TBC Bank (TBCB LI) closed the week at US$ 13.00 (+1.56% w/w and +20.93% m/m). More than 2k GDRs changed hands in the range of GBP 12.60 – 13.00//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 2.60/share (+2.56% w/w and +32.44% m/m). More than 851k shares were traded in the range of GBP 2.56 – 2.68/share. Average daily traded volume was 96k in the last 4 weeks. The volume of GHG shares traded was at 0.29% of its capitalization. BGEO Group PLC (BGEO LN)

Money Market

Refinancing loans: National Bank of Georgia (NBG) issued 7-day refinancing loans of GEL 400mn (US$ 188.0mn).

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: 2-year GEL 20.0mn (US$ 9.4mn) T-Notes of Ministry of Finance were sold at the auction held at NBG on June 8, 2016. The weighted average yield was fixed at 7.972%. The nearest treasury securities auction is scheduled for June 15, 2016, where GEL 10mn nominal value 5-year T-Notes will be sold.