Weekly Market Watch by Galt & Taggart

Weekly Market Watch by Galt & Taggart

Weekly Market Watch by Galt & Taggart

The FINANCIAL -- Economy -- Tourist arrivals up 20.7% y/y in June 2018 -- Total international visitors to Georgia increased 14.2% y/y to 0.61mn visitors in June 2018, according to the Ministry of Internal Affairs. A 20.7% y/y growth in tourist arrivals (0.40mn trips, 65.9% of total) drove the international visitors’ growth. Out of top countries by visitors, in June 2018, international visitors continued to increase from Russia (+27.5% y/y), Azerbaijan (+10.0% y/y) and Turkey (+14.7% y/y). While visitors were down from Armenia (-5.5% y/y) and Iran (-5.4% y/y).

Inflation was 2.2% y/y and -0.6% m/m in June 2018

Annual CPI inflation was 2.2% in June 2018 down from 2.5% in May 2018, according to GeoStat. Core inflation was down to 1.6% from 1.8% in previous month. Annual price changes were driven by price increases in transport (+4.6% y/y, +0.63ppts), housing, water, electricity, gas and other fuels (+5.2% y/y, +0.43ppts), healthcare (+5.1% y/y, +0.43ppts) and alcoholic beverages and tobacco (+4.9% y/y, +0.34ppts) categories. On a monthly basis, there was 0.6% deflation in June 2018. Price decrease in food and non-alcoholic beverages (-2.6% m/m, -0.79ppts) was the major driver of monthly inflation dynamics.

International reserves up 1.6% y/y in June 2018

Gross international reserves were up 1.6% y/y to US$ 3.0bn in June 2018, while reserves were down 0.3% m/m, according to NBG. NBG Purchased US$ 30mn on auctions held throughout June, 2018. Change in reserves was attributed to government FX operations and/or asset revaluation.

Fixed income

Corporate Eurobonds: Bank of Georgia Group Eurobonds (GEBGG) closed at 6.1% yield, trading at 99.7 (-0.2% 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 94.2 (-0.1% w/w), yielding 7.4%.

GOGC Eurobonds (GEOROG) were trading at 101.0 (+0.2% w/w), yielding 6.3%. Georgian Railway Eurobonds (GRAIL) traded at a premium at 105.5 (+0.3% w/w), yielding 6.2%.

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 17.99/share (-4.56% w/w and -12.86% m/m). More than 323k shares traded in the range of GBP 17.87 – 19.05/share. Average daily traded volume was 107k in the last 4 weeks. FTSE 250 Index, of which BGEO is a constituent, lost 1.02% w/w and lost 2.61% m/m. The volume of BGEO shares traded was at 0.66% of its capitalization.

Georgia Capital (CGEO LN) shares closed at GBP 10.15/share (-1.44% w/w and -7.71% m/m). More than 261k shares traded in the range of GBP 10.15 – 10.51/share. The volume of CGEO shares traded was at 0.67% of its capitalization.

TBC Bank Group (TBCG LN) closed the week at GBP 17.32 (-0.8% w/w and +0.81% m/m). More than 97k shares changed hands in the range of GBP 17.08 – 17.68/share. Average daily traded volume was 42k in the last 4 weeks.

Georgia Healthcare Group (GHG LN) shares closed at GBP 2.73/share (+8.55% w/w and +1.87% m/m). More than 83k shares were traded in the range of GBP 2.51 – 2.80/share. Average daily traded volume was 23k in the last 4 weeks. The volume of GHG shares traded was at 0.06% of its capitalization.