Weekly Market Watch by Galt & Taggart

Weekly Market Watch by Galt & Taggart

The FINANCIAL -- Economy

Ex Exports up 8.3% y/y in September 2016 

In September 2016, exports increased 8.3% y/y at US$ 201.7mn, imports were down 1.6% y/y to US$ 631.1mn excluding donated hepatitis-C medication imports, and the trade deficit narrowed 5.7% y/y to US$ 429.3mn according to GeoStat. Increased exports of copper ores (+172.9% y/y), nuts (+18.6% y/y), cars (+8.6% y/y), and crude oil (+7.2% y/y) were the major commodities positively affecting exports growth in September 2016, while pharmaceuticals (-15.6% y/y), ferro-alloys (-6.4% y/y), and wine (-14.4% y/y) exports decreased. 

Petroleum (-8.4% y/y), cars (+14.0% y/y), copper ores (+20.6% y/y), pharmaceuticals (-0.5% y/y, excluding donated hepatitis-C medicine), and gases (-43.5% y/y) represented the top 5 imported commodities in September 2016. 

In 9M16, trade deficit was down 1.1% y/y to US$ 3.68bn, excluding one-offs, as imports were down 3.3% y/y to US$ 5.19bn and exports fell 8.1% y/y to US$ 1.51bn.

Property registration up 10.6% y/y in September 2016 

Property registration (commercial and residential real estate) increased 10.6% y/y (-3.9% m/m), reaching 54,265 units in September 2016, according to the National Agency of Public Registry. Registration increased for primary (+44.0% y/y, 24.6% of total), as well as secondary (+2.8% y/y, 75.4% of total) properties.

Company registration up 9.6% y/y in September 2016 

In September 2016, company registration increased 9.6% y/y (+5.7% m/m) to 4,228 units, according to the National Agency of Public Registry. Out of newly registered companies, 96.1% were business legal entities, while 3.9% comprised non-entrepreneurial (non-commercial) legal entities.

Fixed income

Corporate Eurobonds: Bank of Georgia Eurobond (BGEOLN) closed at 5.4% yield, trading at 103.3 (-0.1% w/w).  GOGC Eurobonds - GEOROG 05/17 traded at 101.7 (+0.1% w/w), yielding 3.8% and GEOROG 04/21 traded at 105.63 (+0.3% w/w), yielding 5.3%. Georgian Railway Eurobond (GRAIL) traded at a premium at 112.6 (+0.2% w/w), yielding 5.2%. 

Georgian Sovereign Eurobond (GEORG) closed at 112.1 (unchanged w/w) at 3.9% yield to maturity.

Equities

BGEO Group (BGEO LN) shares closed at GBP 30.16/share (+0.43% w/w and +0.03% m/m). More than 168k shares traded in the range of GBP 29.50 – 30.81/share. Average daily traded volume was 49k in the last 4 weeks, less than in the previous month. FTSE 250 Index, of which BGEO is a constituent, lost 0.31% w/w and lost 0.05% m/m. The volume of BGEO shares traded was at 0.43% of its capitalization. 

 TBC Bank Group (TBCG LN) closed the week at GBP 13.00 (+3.38% w/w and +12.99% m/m). More than 99k shares changed hands in the range of GBP 12.50 – 13.00/share. Averaged daily traded volume was 152k in the last 4 weeks.  

Georgia Healthcare Group (GHG LN) shares closed at GBP 3.39/share (+3.43% w/w and +9.53% m/m). More than 40k shares were traded in the range of GBP 3.25 – 3.43/share. Average daily traded volume was 18k in the last 4 weeks. The volume of GHG shares traded was at 0.03% of its capitalization.

Money Market

Refinancing loans: National Bank of Georgia (NBG) issued 7-day refinancing loans of GEL 1,330mn (US$ 561.8mn).

Certificates of deposit: NBG sold 182-day, GEL 20mn (US$ 8.4mn) certificates of deposit, with an average yield of 6.72% (up by 14bps from previous issue).

Ministry of Finance Treasury Notes: 5-year GEL 20mn (US$ 8.4mn) T-Notes of Ministry of Finance were sold at the auction held at NBG on October 19, 2016. The weighted average yield was fixed at 7.654%. The nearest treasury securities auction is scheduled for October 26, 2016, where GEL 50mn nominal value 1-year T-Bills will be sold.