Weekly Market Watch by Galt & Taggart

Weekly Market Watch by Galt & Taggart

The FINANCIAL -- Economy

International reserves down 3.4% m/m in October 2016 

Gross international reserves decreased 3.4% m/m (-US$ 98.0mn), while reserves were up 12.7% y/y (+US$ 311.2mn) to US$ 2.76bn as of end-October 2016, according to NBG. The decrease in reserves on a monthly basis was attributed to NBG’s FX interventions.

Property registration up 23.2% y/y in October 2016 

Property registration (commercial and residential real estate) increased 23.2% y/y (+5.6% m/m), reaching 57,329 units in October 2016, according to the National Agency of Public Registry. Registration increased for primary (+59.1% y/y, 26.5% of total), as well as secondary (+14.0% y/y, 73.5% of total) properties. 

Company registration up 4.0% y/y in October 2016 

In October 2016, company registration increased 4.0% y/y (-9.4% m/m) to 3,830 units, according to National Agency of Public Registry. Out of newly registered companies, 95.5% were business legal entities, while 4.5% comprised non-entrepreneurial (non-commercial) legal entities.

Fixed income

Corporate Eurobonds: Bank of Georgia Eurobond (BGEOLN) closed at 5.7% yield, trading at 101.8 (-0.8% w/w).  GOGC Eurobonds - GEOROG 05/17 traded at 101.6 (unchanged w/w), yielding 3.7% and GEOROG 04/21 traded at 105.1 (-0.2% w/w), yielding 5.5%. Georgian Railway Eurobond (GRAIL) traded at a premium at 110.9 (-0.8% w/w), yielding 5.5%. 

Georgian Sovereign Eurobond (GEORG) closed at 111.6 (-0.2% w/w) at 4.0% yield to maturity.

Equities

BGEO Group (BGEO LN) shares closed at GBP 28.68/share (-1.21% w/w and -3.86% m/m). More than 257k shares traded in the range of GBP 28.54 – 29.94/share. Average daily traded volume was 44k in the last 4 weeks, more than in the previous month. FTSE 250 Index, of which BGEO is a constituent, gained 0.89% w/w and lost 2.95% m/m. The volume of BGEO shares traded was at 0.65% of its capitalization. 

 TBC Bank Group (TBCG LN) closed the week at GBP 13.50 (+3.65% w/w and +7.14% m/m). More than 160k shares changed hands in the range of GBP 12.75 – 13.60/share. Averaged daily traded volume was 27k in the last 4 weeks.  

Georgia Healthcare Group (GHG LN) shares closed at GBP 3.53/share (-0.71% w/w and +15.95% m/m). More than 69k shares were traded in the range of GBP 3.40 – 3.60/share. Average daily traded volume was 23k in the last 4 weeks. The volume of GHG shares traded was at 0.05% of its capitalization.

Money Market

Refinancing loans: National Bank of Georgia (NBG) issued 7-day refinancing loans of GEL 1,350mn (US$ 550.0mn).

Certificates of deposit: NBG sold 91-day, GEL 20mn (US$ 8.3mn) certificates of deposit, with an average yield of 6.62% (up by 17bps from previous issue).

Ministry of Finance Treasury Notes: 1-year GEL 33mn (US$ 13.5mn) T-Bills of Ministry of Finance were sold at the auction held at NBG on November 9, 2016. The weighted average yield was fixed at 7.050%. The nearest treasury securities auction is scheduled for November 16, 2016, where GEL 20mn nominal value 5-year T-Notes will be sold.