Weekly Market Watch by Galt & Taggart

Weekly Market Watch by Galt & Taggart

Weekly Market Watch by Galt & Taggart

The FINANCIAL -- EconomyTourist arrivals up 16.1% y/y in May 2018

Total international visitors to Georgia increased 9.0% y/y to 0.54mn visitors in May 2018, according to the Ministry of Internal Affairs. A 16.1% y/y growth in tourist arrivals (0.36mn trips, 66.4% of total) drove the international visitors’ growth. Out of top countries by visitors, in May 2018, international visitors continued to increase from Russia (+24.5% y/y), Azerbaijan (+7.4% y/y), and Iran (+46.1% y/y), while visitors were down from Armenia (-8.9% y/y) and Turkey (-2.4% y/y).

Inflation was 2.5% y/y and flat m/m in May 2018

The annual CPI inflation was 2.5%, below the target level in May 2018, according to GeoStat. Core inflation was 1.8% in May, unchanged from the previous month. Annual price changes were driven by price increases in food and non-alcoholic beverages (+1.8% y/y, +0.56ppts), transport (+3.5% y/y, +0.49ppts) and alcoholic beverages and tobacco (+6.4% y/y, +0.43ppts) categories. On a monthly basis, there was zero inflation in May 2018. Price decrease in food and non-alcoholic beverages (-0.7% m/m, -0.22ppts) and increase in transport (+1.0% m/m, +0.13ppts) categories were the major drivers of monthly price change dynamics.

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.

Equities

Bank of Georgia Group (BGEO LN) shares closed at GBP 19.91/share (+0.96% w/w and -12.97% m/m). More than 808k shares traded in the range of GBP 19.75 – 21.11/share. Average daily traded volume was 102k in the last 4 weeks. FTSE 250 Index, of which BGEO is a constituent, gained 0.84% w/w and gained 2.75% m/m. The volume of BGEO shares traded was at 2.05% of its capitalization.

Georgia Capital (CGEO LN) shares closed at GBP 11.12/share (+4.4% w/w). More than 4,211k shares traded in the range of GBP 10.71 – 11.21/share.

TBC Bank Group (TBCG LN) closed the week at GBP 17.04 (+1.43% w/w and +1.31% m/m). More than 211k shares changed hands in the range of GBP 16.72 – 17.52 share. Averaged daily traded volume was 40k in the last 4 weeks.

Georgia Healthcare Group (GHG LN) shares closed at GBP 2.80/share (-1.23% w/w and +5.46% m/m). More than 37k shares were traded in the range of GBP 2.68 – 2.80/share. Average daily traded volume was 41k 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 1,000mn (US$ 408.8mn).

Ministry of Finance Treasury Notes:

1-year GEL 40.0mn (US$ 16.3mn) T-Bills of Ministry of Finance were sold at the auction held at NBG on June 6, 2018. The weighted average yield was fixed at 7.346%. The nearest treasury security auction is scheduled for June 13, 2018, where GEL 40.0mn nominal value 2-year T-Notes and GEL 20.0mn nominal value 182-days T-Bills will be sold.