Weekly Market Watch by Galt & Taggart

Weekly Market Watch by Galt & Taggart

Weekly Market Watch by Galt & Taggart

The FINANCIAL -- Economy

Exports up 26.0% y/y in January 2018

In January 2018, exports increased 26.0% y/y to US$ 222.7mn, imports were up 18.2% y/y to US$ 593.9mn and the trade deficit widened 13.9% y/y to US$ 371.2mn, according to GeoStat.

In January 2018, copper (+2.9% y/y), ferro-alloys (+15.5% y/y), cars (+45.1% y/y), wine (+30.1% y/y) and petroleum (20.7x Higher) were the top 5 exported commodities; A 28.8% of exports was directed to the EU (+21.4% y/y), 36.3% were directed to the CIS (+23.5% y/y) and 34.9% to other countries (+32.9% y/y).

Petroleum (+143.6% y/y), gases (-8.2% y/y), cars (-2.6% y/y), copper (+18.8% y/y) and pharmaceuticals (-60.2% y/y) represented the top 5 imported commodities in January 2018.

Producer price index up 1.6% m/m and up 8.0% y/y in January 2018

PPI for industrial goods was up 1.6% m/m in January 2018, according to GeoStat. A 14.3% price increase for electrical energy, gas, steam and hot water contributed the most to the overall index change. Prices were also up for products from mining and quarrying (+1.6% m/m), while prices were down (-0.5% m/m) for manufactured products.

Annual PPI was up 8.0% in January 2018. Rising prices in manufacturing (+6.9% y/y) contributed the most to the overall index change. Prices were also up for supply of electricity, gas and water (+14.0% y/y) and for mining and quarrying (+9.4% y/y).

Fixed income

Corporate Eurobonds: BGEO Group Eurobonds (BGEOLN) closed at 5.1% yield, trading at 104.1 (-0.1% 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 105.9 (-0.2% w/w), yielding 4.7%. Georgian Railway Eurobonds (GRAIL) traded at a premium at 110.8 (-0.3% w/w), yielding 5.0%.

Georgian Sovereign Eurobonds (GEORG) closed at 109.6 (+0.1% w/w) at 3.6% yield to maturity. Georgia Eurobonds, YTM (%)

Equities

BGEO Group (BGEO LN) shares closed at GBP 33.12/share (-0.42% w/w and -12.70% m/m). More than 390k shares traded in the range of GBP 32.88 – 34.44/share. Average daily traded volume was 68k in the last 4 weeks. FTSE 250 Index, of which BGEO is a constituent, gained 0.34% w/w and lost 4.21% m/m. The volume of BGEO shares traded was at 0.99% of its capitalization.

TBC Bank Group (TBCG LN) closed the week at GBP 16.66 (+0.36% w/w and -4.58% m/m). More than 72k shares changed hands in the range of GBP 16.20 – 16.98 share. Averaged daily traded volume was 14k in the last 4 weeks.

Georgia Healthcare Group (GHG LN) shares closed at GBP 3.36/share (+0.08% w/w and -2.75% m/m). More than 53k shares were traded in the range of GBP 3.35 – 3.50/share. Average daily traded volume was 7k in the last 4 weeks. The volume of GHG shares traded was at 0.04% of its capitalization.

Money Market

Refinancing loans: National Bank of Georgia (NBG) issued 7-day refinancing loans of GEL 970.0mn (US$ 392.9mn).

Certificates of deposit: NBG sold 91-day, GEL 20mn (US$ 8.1mn) certificates of deposit, with an average yield of 7.34% (down 0.04ppts from previous issue).

Ministry of Finance Treasury Notes:

5-year GEL 30.0mn (US$ 12.1mn) T-Notes of Ministry of Finance were sold at the auction held at NBG on February 21, 2018. The weighted average yield was fixed at 7.963%. The nearest treasury security auction is scheduled for March 7, 2018, where GEL 40.0mn nominal value 1-year T-Bills will be sold.