Weekly Market Watch by Galt & Taggart

Weekly Market Watch by Galt & Taggart

The FINANCIAL -- Economy

Money transfers up 14.0% y/y in October 2016 

In October 2016, money transfers increased 14.0% y/y to US$ 102.5mn after growing 13.1% y/y in previous month, according to NBG. From major remitting countries, money transfers were up from: USA (+32.2% y/y, 11.3% of total), Greece (+42.5% y/y, 11.0% of total), Italy (+6.4% y/y, 10.0% of total), Turkey (+74.2% y/y, 8.5% of total) and Israel (+82.2% y/y, 5.5% of total), while transfers were down from Russia (-3.8% y/y, 33.8% of total). Overall, money transfers were up 4.7% y/y to US$ 934.5mn in 10M16.

Exports up 0.7% y/y in October2016

In October 2016, imports increased 6.3% y/y to US$ 654.8mn, exports increased 0.7% y/y to US$ 189.3mn, and the trade deficit was up 8.7% y/y to US$ 465.4mn, according to GeoStat’s preliminary figures. In 10M16, the trade deficit was flat reaching US$ 4.15bn, excluding one-offs. Detailed foreign trade statistics will be available on November 21, 2016.

Producer price index up 1.3% m/m and down 1.9% y/y in October 2016 

PPI for industrial goods increased 1.3% m/m in October 2016, according to GeoStat. A 1.3% price increase for manufacturing contributed the most to the overall index change. In this section prices were up for manufacture of food products, beverages and tobacco (+1.5% m/m); Prices were also up for manufacture of basic and fabricated metals (3.2% m/m). 

Annual PPI was down 1.9% in October 2016. Falling prices in manufacturing contributed the most to the overall index change (-2.7% y/y,) as prices were down for manufacture of chemical products (-20.9% y/y) and basic and fabricated metals (-6.6% y/y). Meanwhile, supply of electricity, gas and water prices were up 4.6% y/y. 

Fixed income

Corporate Eurobonds: Bank of Georgia Eurobond (BGEOLN) closed at 5.9% yield, trading at 100.4 (-1.4% w/w).  GOGC Eurobonds - GEOROG 05/17 traded at 101.4 (-0.2% w/w), yielding 3.8% and GEOROG 04/21 traded at 103.9 (-1.1% w/w), yielding 5.7%. Georgian Railway Eurobond (GRAIL) traded at a premium at 107.9 (-2.7% w/w), yielding 6.1%. 

Georgian Sovereign Eurobond (GEORG) closed at 108.4 (-2.9% w/w) at 4.7% yield to maturity.

Equities

BGEO Group (BGEO LN) shares closed at GBP 28.25/share (-1.50% w/w and -6.83% m/m). More than 420k shares traded in the range of GBP 27.96 – 29.31/share. 

 TBC Bank Group (TBCG LN) closed the week at GBP 13.25 (-1.85% w/w and +6.93% m/m). More than 148k shares changed hands in the range of GBP 12.60 – 13.50/share. 

Georgia Healthcare Group (GHG LN) shares closed at GBP 3.58/share (+1.42% w/w and +8.33% m/m). More than 69k shares were traded in the range of GBP 3.30 – 3.70/share. The volume of GHG shares traded was at 0.03% of its capitalization.

On the Georgian stock exchange, There were no trades. As a result, the G&T Index remained at 908.54 (unchanged w/w). 

Money Market

Refinancing loans: National Bank of Georgia (NBG) issued 7-day refinancing loans of GEL 1,340mn (US$ 537.6mn).

Certificates of deposit: NBG sold 182-day, GEL 20mn (US$ 8.0mn) certificates of deposit, with an average yield of 6.87% (up by 15bps from previous issue).

Ministry of Finance Treasury Notes: 5-year GEL 20mn (US$ 8.0mn) T-Notes of Ministry of Finance were sold at the auction held at NBG on November 16, 2016. The weighted average yield was fixed at 8.283%. The nearest treasury securities auction is scheduled for November 22, 2016, where GEL 10mn nominal value 5-year 10-Notes will be sold.