Weekly Market Watch by Galt & Taggart

Weekly Market Watch by Galt & Taggart

Weekly Market Watch by Galt & Taggart

The FINANCIAL -- Economy -- Exports up 31.1% y/y in June 2018. In June 2018, exports increased by 31.1% y/y to US$ 308.9mn, imports were up 19.8% y/y to US$ 771.2mn and the trade deficit widened 13.2% y/y to US$ 462.3mn, according to GeoStat.

In June 2018, copper (+30.7% y/y), cars (+130.9% y/y), ferro-alloys (+14.2% y/y), wine (-11.3% y/y) and pharmaceuticals (-3.3% y/y) were the top 5 exported commodities. A 23.3% of exports was directed to the EU (+107.8% y/y), 44.1% to the CIS (+43.1% y/y) and 32.6% to other countries (-4.9% y/y).

In June 2018, petroleum (+51.9% y/y), cars (+45.9% y/y), copper (+75.1% y/y), pharmaceuticals (+7.7% y/y) and phones (-32.4% y/y) represented the top 5 imported commodities.

Overall, in 1H18, the trade deficit was up 20.0% y/y at US$ 2.8bn as exports were up 28.5% y/y to US$ 1.5bn and imports increased by 22.9% y/y to US$ 4.4bn.

Money transfers up 14.8% y/y in June 2018

In June 2018, money transfers increased 14.8% y/y to US$ 135.1mn, after growing 13.0% y/y in the previous month, according to NBG. From major remitting countries, money transfers were up from Italy (+32.2% y/y, 11.5% of total), USA (+16.6% y/y, 10.5% of total), Greece (+19.4% y/y, 10.3% of total), Israel (+27.3% y/y, 9.8% of total) and Turkey (+1.9% y/y, 7.2% of total), while remittances were down from Russia (-0.6% y/y, 29.0% of total). Overall, in 1H18 money transfers were up 18.3% y/y to US$ 744.4mn.

Producer price index up 6.8% y/y in June 2018

Annual PPI for industrial goods was up 6.8% in June 2018, according to GeoStat. Rising prices in manufacturing (+5.1% y/y) and supply of electricity, gas and water (+14.6% y/y) contributed the most to the overall index change.

Fixed income

Corporate Eurobonds: Bank of Georgia Group Eurobonds (GEBGG) closed at 6.0% yield, trading at 99.8 (+0.01% w/w). Bank of Georgia GEL-denominated Eurobonds (GEBGG) were trading at 100.5 (+0.5% w/w), yielding 10.7%. Georgia Capital Eurobonds (GEOCAP) were trading at 94.5 (+0.2% w/w), yielding 7.4%.

GOGC Eurobonds (GEOROG) were trading at 101.9 (+0.3% w/w), yielding 6.0%. Georgian Railway Eurobonds (GRAIL) traded at a premium at 106.0 (+0.01% w/w), yielding 6.0%.

Georgian Sovereign Eurobonds (GEORG) closed at 106.7 (-0.1% w/w) at 4.2% yield to maturity. Georgia Eurobonds, YTM (%)

Equities

Bank of Georgia Group (BGEO LN) shares closed at GBP 17.73/share (-4.48% w/w and -7.09% m/m). More than 414k shares traded in the range of GBP 17.23 – 19.57/share. Average daily traded volume was 79k in the last 4 weeks. FTSE 250 Index, of which BGEO is a constituent, gained 0.51% w/w and lost 0.03% m/m. The volume of BGEO shares traded was at 0.84% of its capitalization.

Georgia Capital (CGEO LN) shares closed at GBP 9.76/share (-6.39% w/w and -13.55% m/m). More than 545k shares traded in the range of GBP 9.80 – 10.49/share. Average daily traded volume was 103k in the last 4 weeks. The volume of CGEO shares traded was at 1.41% of its capitalization.

TBC Bank Group (TBCG LN) closed the week at GBP 17.24 (-0.35% w/w and +2.25% m/m). More than 109k shares changed hands in the range of GBP 16.88 – 17.52/share. Average daily traded volume was 25k in the last 4 weeks.

Georgia Healthcare Group (GHG LN) shares closed at GBP 2.6/share (-0.76% w/w and -1.70% m/m). More than 25k shares were traded in the range of GBP 2.60 – 2.66/share. Average daily traded volume was 17k in the last 4 weeks. The volume of GHG shares traded was at 0.02% of its capitalization. BGEO Group PLC (BGEO LN)

Money Market

Refinancing loans: National Bank of Georgia (NBG) issued 7-day refinancing loans of GEL 950mn (US$ 387.1mn).

Ministry of Finance Benchmark Bonds:

10-year GEL 40.0mn (US$ 10.2mn) Benchmark Bonds of Ministry of Finance were sold at the auction held at NBG on July 18, 2018. The weighted average yield was fixed at 9.016%. The nearest treasury security auction is scheduled for July 25, 2018, where GEL 30mn nominal value 5-year Benchmark bonds will be sold.