Weekly Market Watch by Galt & Taggart

Weekly Market Watch by Galt & Taggart

Weekly Market Watch by Galt & Taggart

Economy

BGEO demerger finalized

On 29 May 2018, Bank of Georgia Group PLC (new parent company of BGEO Group PLC) demerged into two separate companies – 1) Bank of Georgia Group PLC and 2) Georgia Capital PLC. Both companies are admitted to the premium listing segment of the Official list and to trading on the London Stock Exchange's main market for listed securities. Bank of Georgia Group PLC retained its existing ticker "BGEO" and Georgia Capital PLC's shares are traded under the ticker "CGEO". After the demerger Bank of Georgia Group PLC remains in the FTSE 250 and Georgia Capital PLC has been included in the FTSE Small Cap index.

Real GDP growth was 6.5% y/y in April 2018

Georgia’s economy grew by 6.5% y/y in April 2018 (highest since July 2014) after growing 5.6% y/y in previous month, according to GeoStat’s rapid estimates. In April 2018, the growth was posted in social and personal service activities, transport, manufacturing, financial intermediation, trade, manufacturing and real estate sectors. Overall, real GDP growth was 5.5% y/y in 4M18. Monthly rapid estimates are based on VAT turnover, fiscal and monetary statistics.

NPLs at 2.6% in April 2018

In April 2018, the banking sector loan portfolio increased 22.1% y/y after growing 21.6% y/y in previous month, excluding the exchange rate effect. In unadjusted terms, loan portfolio was up 19.8% y/y and up 2.2% m/m to GEL 22.7bn (US$ 9.2bn). Deposits were up 21.8% y/y excluding the exchange rate effect. In unadjusted terms, deposits were up 22.7% y/y and up 1.3% m/m to GEL 19.9bn (US$ 8.1bn). Deposit dollarization declined to 62.4% (-6.2ppts y/y and -0.4ppts m/m). NPLs stood at 2.6% in April 2018 (-1.2ppts y/y and -0.2ppts m/m).

Fixed income

Corporate Eurobonds: BGEO Group Eurobonds (BGEOLN) closed at 6.0% yield, trading at 99.9 (-0.2% 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 94.7 (unchanged w/w), yielding 7.3%.

GOGC Eurobonds (GEOROG) were trading at 101.2 (+0.1% w/w), yielding 6.3%. Georgian Railway Eurobonds (GRAIL) traded at a premium at 104.6 (-0.4% w/w), yielding 6.4%.

Georgian Sovereign Eurobonds (GEORG) closed at 106.4 (+0.2% w/w) at 4.4% yield to maturity. Georgia Eurobonds, YTM (%)

Equities

BGEO Group (BGEO LN) shares closed at GBP 19.72/share (-6.36% w/w and -15.36% m/m). More than 698k shares traded in the range of GBP 18.17 – 23.49/share. Average daily traded volume was 80k in the last 4 weeks. FTSE 250 Index, of which BGEO is a constituent, lost 0.57% w/w and gained 3.15% m/m. The volume of BGEO shares traded was at 1.77% of its capitalization.

Georgia Capital (CGEO LN) shares closed at GBP 10.65/share. More than 2,924k shares traded in the range of GBP 9.23 – 11.9/share.

TBC Bank Group (TBCG LN) closed the week at GBP 16.80 (+0.84% w/w and -5.62% m/m). More than 100k shares changed hands in the range of GBP 15.76 – 17.24 share. Averaged daily traded volume was 34k in the last 4 weeks.

Georgia Healthcare Group (GHG LN) shares closed at GBP 2.84/share (-5.97% w/w and +2.35% m/m). More than 192k shares were traded in the range of GBP 2.70 – 3.02/share. Average daily traded volume was 44k in the last 4 weeks. The volume of GHG shares traded was at 0.15% of its capitalization.


BGEO Group PLC (BGEO LN)

Money Market

Refinancing loans: National Bank of Georgia (NBG) issued 7-day refinancing loans of GEL 1,010mn (US$ 408.6mn).

Ministry of Finance Treasury Notes:

The nearest treasury security auction is scheduled for June 6, 2018, where GEL 40mn nominal value 1-year T-bills will be sold.