Weekly Market Watch by Galt & Taggart

Weekly Market Watch by Galt & Taggart

Weekly Market Watch by Galt & Taggart

The FINANCIAL -- Economy

Exports up 33.1% y/y in March 2018

In March 2018, exports increased 33.1% y/y to US$ 293.9mn, imports were up 34.7% y/y to US$ 837.7mn and the trade deficit widened 35.6% y/y to US$ 543.7mn, according to GeoStat.

In March 2018, copper (+9.3% y/y), ferro-alloys (+28.8% y/y), cars (+69.3% y/y), waters (+151.6% y/y) and wine (+39.4% y/y) were the top 5 exported commodities. A 26.2% of exports was directed to the EU (+32.9% y/y), 43.6% to the CIS (+70.2% y/y) and 30.3% to other countries (+1.4% y/y).
In March 2018, petroleum (+51.0% y/y), Mixed goods (59.4x higher y/y), cars (-4.8% y/y), pharmaceuticals (+32.1% y/y) and gases (-9.6% y/y) represented the top 5 imported commodities.

Overall, in 1Q18, the trade deficit was up 18.1% y/y at US$ 1.3bn as exports were up 28.4% y/y to US$ 740.3mn, while imports increased 21.6% y/y to US$ 2.1bn.

Producer price index down 0.9% m/m and up 6.5% y/y in March 2018

PPI for industrial goods was down 0.9% m/m in March 2018, according to GeoStat. A 0.9% price decrease for manufacturing contributed the most to the overall index change. Annual PPI was up 6.5% in March 2018. Rising prices in manufacturing (+5.5% y/y) contributed the most to the overall index change. Prices were also up for supply of electricity, gas and water (+12.1% y/y).

Money transfers up 17.0% y/y in March 2018

In March 2018, money transfers increased 17.0% y/y to US$ 131.1mn, after growing 21.0% y/y in previous month, according to NBG. Money transfers were up from almost all major remitting countries: Italy (+39.7% y/y, 11.9% of total), Greece (+19.0% y/y, 10.5% of total), USA (+10.6% y/y, 9.9% of total), Israel (+50.7% y/y, 9.9% of total) and Turkey (+15.0% y/y, 8.1% of total). Meanwhile remittances were slightly down from Russia (-0.5% y/y, 29.1% of total). Overall, in 1Q18 money transfers were up 22.4% y/y to US$ 355.0mn.

Fixed income

Corporate Eurobonds: BGEO Group Eurobonds (BGEOLN) closed at 5.7% yield, trading at 101.2 (+0.3% w/w). Bank of Georgia GEL-denominated Eurobonds (GEBGG) were trading at 100.5 (unchanged w/w), yielding 10.7%. Georgia Capital Eurobonds (GEOCAP) were trading at 96.1 (-092% w/w), yielding 6.9%.
GOGC Eurobonds (GEOROG) were trading at 103.5 (-0.3% w/w), yielding 5.5%. Georgian Railway Eurobonds (GRAIL) traded at a premium at 108.2 (-0.3% w/w), yielding 5.5%.

Georgian Sovereign Eurobonds (GEORG) closed at 107.9 (unchanged w/w) at 4.0% yield to maturity. Georgia Eurobonds, YTM (%)

Equities

BGEO Group (BGEO LN) shares closed at GBP 36.24/share (+4.62% w/w and +0.06% m/m). More than 316k shares traded in the range of GBP 34.06 – 36.66/share. Average daily traded volume was 67k in the last 4 weeks. FTSE 250 Index, of which BGEO is a constituent, gained 1.91% w/w and gained 2.50% m/m. The volume of BGEO shares traded was at 0.80% of its capitalization.

TBC Bank Group (TBCG LN) closed the week at GBP 18.68 (+4.47% w/w and -0.32% m/m). More than 153k shares changed hands in the range of GBP 17.46 – 18.88 share. Averaged daily traded volume was 50k in the last 4 weeks.

Georgia Healthcare Group (GHG LN) shares closed at GBP 2.96/share (-0.34% w/w and -6.33% m/m). More than 70k shares were traded in the range of GBP 2.90 – 3.18/share. Average daily traded volume was 8k 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 830mn (US$ 341.9mn).

Certificates of deposit: NBG sold 91-day, GEL 20mn (US$ 8.2mn) certificates of deposit, with an average yield of 7.26% (unchanged from previous issue).

Ministry of Finance Treasury Notes:

10-year GEL 25.0mn (US$ 10.3mn) T-Notes of Ministry of Finance were sold at the auction held at NBG on April 18, 2018. The weighted average yield was fixed at 9.072%. The nearest treasury security auction is scheduled for April 25, 2018, where GEL 30.0mn nominal value 5-year T-Notes will be sold.