Weekly Market Watch by Galt & Taggart

Weekly Market Watch by Galt & Taggart

The FINANCIAL -- Economy

International reserves up 9.4% y/y in 2016 

Gross international reserves were up 9.4% y/y to US$ 2.8bn in December 2016, while reserves were down 0.8% m/m (-US$ 21.7mn), according to NBG. The reduction in  reserves on a monthly basis was attributed to NBG’s FX intervention. In December NBG sold US$ 40mn, however reserves reduced less due to gains in government FX operations (disbursement of foreign assistance).

Property registration up 8.7% y/y in December 2016 

Property registration (commercial and residential real estate) increased 8.7% y/y (+2.6% m/m), reaching 60,223 units in December 2016, according to the National Agency of Public Registry. Registration increased for primary (+22.6% y/y, 21.7% of total), as well as secondary (+5.4% y/y, 78.3% of total) properties. 

Company registration down 11.3% y/y in December 2016 

In December 2016, company registration decreased 11.4% y/y (-11.2% m/m) to 3,726 units, according to National Agency of Public Registry. Out of newly registered companies, 95.3% were business legal entities, while 4.7% comprised non-entrepreneurial (non-commercial) legal entities.

EU transfers EUR 43.95m to Georgian treasury in support of reforms

On 9 January 2017, the EU granted EUR 43.95 million of non-reimbursable aid to Georgia in support of reform progress in several sectors: trade and business development, vocational education and employment, agriculture, and integration of internally displaced people (IDPs). Payments were also made for Georgia's justice sector, public administration, public finance management and regional development policy.

Fixed income

Corporate Eurobonds: Bank of Georgia Eurobond (BGEOLN) closed at 5.9% yield, trading at 100.4 (+0.1% w/w).  GOGC Eurobonds - GEOROG 05/17 traded at 100.8 (-0.1% w/w), yielding 4.6% and GEOROG 04/21 traded at 104.4 (+0.2% w/w), yielding 5.5%. Georgian Railway Eurobond (GRAIL) traded at a premium at 107.1 (+0.2% w/w), yielding 6.2%. 

Georgian Sovereign Eurobond (GEORG) closed at 109.8 (+0.1% w/w) at 4.3% yield to maturity.

Equities

BGEO Group (BGEO LN) shares closed at GBP 27.87/share (-3.89% w/w and -14.03% m/m). More than 370k shares traded in the range of GBP 27.55 – 28.80/share. Average daily traded volume was 76k in the last 4 weeks, more than in the previous month. FTSE 250 Index, of which BGEO is a constituent, gained 0.17% w/w and gained 3.70% m/m. The volume of BGEO shares traded was at 0.94% of its capitalization.

 TBC Bank Group (TBCG LN) closed the week at GBP 14.50 (-0.34% w/w and -2.95% m/m). More than 250k shares changed hands in the range of GBP 14.19 – 14.80/share. Averaged daily traded volume was 217k in the last 4 weeks.

Georgia Healthcare Group (GHG LN) shares closed at GBP 3.40/share (unchanged w/w and -8.66% m/m). More than 166k shares were traded in the range of GBP 3.15 – 3.45/share.  Average daily traded volume was 18k in the last 4 weeks. The volume of GHG shares traded was at 0.13% of its capitalization.

Money Market

Refinancing loans: National Bank of Georgia (NBG) issued 7-day refinancing loans of GEL 1,150mn (US$ 434.5mn).

Ministry of Finance Treasury Notes: 182 days GEL 20.0mn (US$ 7.3mn) T-bills of Ministry of Finance were sold at the auction held at NBG on January 11, 2017. The weighted average yield was fixed at 6.968%. 

Ministry of Finance Treasury Notes: 2-year GEL 40.0mn (US$ 14.6mn) T-notes of Ministry of Finance were sold at the auction held at NBG on January 11, 2017. The weighted average yield was fixed at 8.171%. The nearest treasury securities auction is scheduled for January 18, 2017, where GEL 40.0mn nominal value 1-year T-Notes will be sold.