The FINANCIAL -- Georgia improved its position by 3 places as is ranked a6th in the WB’s 2019 Doing Business. With this ranking, Georgia is the highest ranked economy in the Europe and Central Asia region, followed by Macedonia (10), Azerbaijan (25) and Kazakhstan (28).
Georgia made notable improvements in the following areas as measured by 2019 DB report: 1) Georgia made starting a business easier by allowing voluntary value added tax registration at the time of business incorporation; 2) Georgia made paying taxes easier by levying income tax on distributed profits rather than on taxable profits; 3) Georgia made enforcing contracts easier by introducing random and automatic assignment of cases to judges throughout the courts. Report also mentions that Georgia reduced its relative gap to the best regulatory performance on starting a business the most globally in 2017/18.
Real GDP growth was 5.6% y/y in September 2018
Georgia’s economy grew by 5.6% y/y in September 2018 after growing 2.0% y/y in previous month, according to Geostat’s rapid estimates. In September 2018, the growth was posted in manufacturing, financial intermediation, trade, real estate, transport and hotels and restaurants sectors. Overall, real GDP growth was 4.9% y/y in 9M18. Monthly rapid estimates are based on VAT turnover, fiscal and monetary statistics.
Inflation was 2.3% y/y and 0.3% m/m in October 2018
Annual CPI inflation was 2.3% in October 2018 down from 2.7% in previous month, according to Geostat. Core inflation was 1.7% unchanged compared to the previous month. Annual price changes were driven by price increases in transport (+6.5% y/y, +0.86ppts), healthcare (+6.1% y/y, +0.51ppts) and alcoholic beverages and tobacco (+5.7% y/y, +0.39ppts) categories, while prices were down in clothing and footwear (-7.1% y/y, -0.25ppts). On a monthly basis, there was 0.3% inflation in October 2018. Price increase in clothing and footwear (+6.3% m/m, +0.2ppts) was the major driver of monthly inflation dynamics.
Corporate Eurobonds: Bank of Georgia Group Eurobonds (GEBGG) closed at 6.4% yield, trading at 98.3 (+0.1% 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 92.3 (unchanged w/w), yielding 7.9%.
GOGC Eurobonds (GEOROG) were trading at 101.9 (-0.1% w/w), yielding 5.9%. Georgian Railway Eurobonds (GRAIL) traded at a premium at 106.4 (+0.2% w/w), yielding 5.8%.
Georgian Sovereign Eurobonds (GEORG) closed at 105.3 (+0.1% w/w) at 4.5% yield to maturity. Georgia Eurobonds, YTM (%)
EquitiesBank of Georgia Group (BGEO LN) shares closed at GBP 16.43/share (+10.51% w/w and -4.03% m/m). More than 435k shares traded in the range of GBP 15.05 – 16.67/share. Average daily traded volume was 66k in the last 4 weeks. FTSE 250 Index, of which BGEO is a constituent, gained 5.23% w/w and lost 4.70% m/m. The volume of BGEO shares traded was at 0.89% of its capitalization.
Georgia Capital (CGEO LN) shares closed at GBP 12.08/share (+5.06% w/w and +5.67% m/m). More than 131k shares traded in the range of GBP 11.49 – 12.25/share. Average daily traded volume was 59k in the last 4 weeks. The volume of CGEO shares traded was at 0.34% of its capitalization.
TBC Bank Group (TBCG LN) closed the week at GBP 17.10 (+8.64% w/w and -0.70% m/m). More than 222k shares changed hands in the range of GBP 15.52 – 17.34/share. Average daily traded volume was 31k in the last 4 weeks. The volume of TBCG shares traded was at 0.41% of its capitalization.
Georgia Healthcare Group (GHG LN) shares closed at GBP 2.30/share (-4.17% w/w and +3.84% m/m). More than 72k shares were traded in the range of GBP 2.30 – 2.49/share. Average daily traded volume was 23k in the last 4 weeks. The volume of GHG shares traded was at 0.05% of its capitalization
Refinancing loans: National Bank of Georgia (NBG) issued 7-day refinancing loans of GEL 1,170mn (US$ 430.1mn).
Ministry of Finance Benchmark Bonds:
The nearest treasury security auction is scheduled for November 7, 2018, where GEL 40.0mn nominal value 1-year T-Bills will be sold.