Weekly Market Watch by Galt & Taggart

Weekly Market Watch by Galt & Taggart

The FINANCIAL -- Economy

Exports up 50.0% y/y in December 2017

In December 2017, exports increased 50.0% y/y to US$ 288.2mn, imports were up 13.5% y/y to US$ 845.3mn and the trade deficit widened 0.8% y/y to US$ 557.1mn, according to GeoStat. Overall in 2017, the trade deficit was up 1.3% y/y at US$ 5.3bn as exports were up 29.1% y/y to US$ 2.7bn, while imports increased 9.4% y/y to US$ 8.0bn.

In December 2017, copper (+49.9% y/y), cars (+153.2% y/y), ferro-alloys (+38.7% y/y), spirits (+86.7% y/y) and wine (+51.2% y/y) were the top 5 exported commodities; A 23.1% of exports were directed to the EU (+14.7% y/y), 52.1% were directed to the CIS (+89.0% y/y) and 24.8% to other countries (+30.8% y/y).

Petroleum (-11.3% y/y), gases (-15.6% y/y), cars (-8.4% y/y), pharmaceuticals (+4.2% y/y) and copper (+13.9% y/y) represented the top 5 imported commodities in December 2017.

Producer price index down 0.8% m/m and up 8.7% y/y in December 2017

PPI for industrial goods was down 0.8% m/m in December 2017, according to GeoStat. A 0.6% price decrease for manufacturing contributed the most to the overall index change as prices were down for food, beverages and tobacco (-1.4% m/m) and basic and fabricated metals (-0.8% m/m).
Annual PPI was up 8.7% in December 2017. Rising prices in manufacturing (+8.5% y/y) contributed the most to the overall index change. Prices were also up for supply of electricity, gas and water (+9.2% y/y) and for mining and quarrying (+11.0% y/y).

Fixed income

Corporate Eurobonds: BGEO Group Eurobonds (BGEOLN) closed at 5.0% yield, trading at 104.9 (-0.3% w/w). Bank of Georgia GEL-denominated Eurobonds (GEBGG) were trading at 100.5 (unchanged w/w), yielding 10.7%. GOGC Eurobonds (GEOROG) were trading at 107.6 (unchanged w/w), yielding 4.2%. Georgian Railway Eurobonds (GRAIL) traded at a premium at 112.5 (-0.1% w/w), yielding 4.6%.
Georgian Sovereign Eurobonds (GEORG) closed at 110.1 (-0.4% w/w) at 3.5% yield to maturity. Georgia Eurobonds, YTM (%)


BGEO Group (BGEO LN) shares closed at GBP 37.94/share (+1.01% w/w and +7.88% m/m). More than 328k shares traded in the range of GBP 37.32 – 38.52/share. Average daily traded volume was 64k in the last 4 weeks. FTSE 250 Index, of which BGEO is a constituent, lost 0.99% w/w and gained 0.93% m/m. The volume of BGEO shares traded was at 0.83% of its capitalization.

TBC Bank Group (TBCG LN) closed the week at GBP 17.46 (+0.11% w/w and +3.31% m/m). More than 61k shares changed hands in the range of GBP 16.80 – 17.50 share. Averaged daily traded volume was 13k in the last 4 weeks.

Georgia Healthcare Group (GHG LN) shares closed at GBP 3.45/share (+0.01% w/w and -3.90% m/m). More than 38k shares were traded in the range of GBP 3.40 – 3.50/share. Average daily traded volume was 11k 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 1,060mn (US$ 422.3mn).

Certificates of deposit: NBG sold 91-day, GEL 20mn (US$ 8.0mn) certificates of deposit, with an average yield of 7.38% (up 0.05ppts from previous issue).

Ministry of Finance Treasury Notes:

5-year GEL 30.0mn (US$ 11.9mn) T-Notes of Ministry of Finance were sold at the auction held at NBG on January 24, 2018. The weighted average yield was fixed at 8.119%. The nearest treasury security auction is scheduled for February 07, 2018, where GEL 40.0mn nominal value 1-year T-Bills will be sold.