Georgia

1st Aug by Charles Mitchell

21 comments 1266 reads

I currently have sold my holdings in Georgia TBC Bank (LON:TBCG) ,Georgia Capital (LON:CGEO) and Bank of Georgia (LON:BGEO) . I will be watching the election results. The market could drift up until nearer then- but not time for me to re-invest. Interesting news from TBCG "

TBC Bank Group PLC (“TBC PLC”) announces that its subsidiary, JSC TBC Bank ("TBC Bank"), has signed a loan agreement in the amount of $150 million with the International Finance Corporation (IFC). The loan bears a maturity of five years and will be dedicated to boost access to finance for small and medium-sized enterprises (SMEs) in Georgia, with half earmarked for renewable energy and energy-efficient projects.

Vakhtang Butskhrikidze, CEO of JSC TBC Bank, said: “The signing of this facility is a significant milestone in partnership with IFC and reflects our shared commitment to promote the sustainable development of the Georgian economy. The facility will not only bolster TBC’s efforts to support SMEs, but also enable us to play a critical role in promoting climate-friendly projects across Georgia. We would like to express our gratitude to IFC and we look forward to working on many more successful deals in the future”.

Ivana Fernandes Duarte, IFC’s Regional Manager for the South Caucasus, said: “This investment underscores IFC’s commitment to fostering economic growth and sustainability in Georgia. By partnering with TBC Bank and leveraging its excellent digital channels and extensive branch network, we aim to drive significant advancements in both SME and climate financing, contributing to a more resilient and sustainable economy”.

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Albertos

6th Aug

Charles

I'm back in for good or bad - really don't know, but I've taken a punt on Bank of Georgia (LON:BGEO) and Georgia Capital (LON:CGEO) .

The economy is growing fast but the political situation still seems to be fluid (but not reported on by the mainstream providers anymore - quietening down?). Bank of Georgia (LON:BGEO) looks a steal at the moment on the strength of the economy - BWDIK?

I decided to risk a couple of starter stakes - but I'm watching very carefully and will be out like a shot on any bad news about Georgia.

(Edit : I'm also encouraged by the current strength of the GEL vs other currencies. )

Charles Mitchell

8th Aug

Albertos- BGEO does look good value on yield alone. CGEO seems to have bounced a bit more in % terms than the Bank- but maybe the fall was larger as well. Election in October is a concern, but the President has stated this "

“I think, as always… Observation in the recent period, as time goes by, is less and less effective, because the methods of forgery have become more ‘refined,’ not only in Georgia, but around the world. There are often cases of bribery, through the announcement of various programs, etc. But let’s not believe in the ‘omnipotence’ announced by the authorities, suggesting that they will falsify and we will not be able to do anything. They will not be able to do so if there is full mobilization and maximum involvement of the population, not only in Georgia, but also abroad. The role of the diaspora in this process is very important. Even if you don’t like any of the parties much, you should still vote for them,” she said.

“I also believe that young people will actively participate in the elections, Because they know very well that this is their ‘last chance.’ We know that many young people have been leaving the country because of difficult living and working conditions. There are no prospects for them in this country today, which I am very sorry for, but this is the reality. Maybe this is the calculation of the government. They are not defenders of national interests. The government encourages young people and the active part of society to leave the country and become immigrants. Therefore, it is very important that the diaspora also actively participates in the elections.”

She went on to claim that the diaspora is prevented in every way from participating in the elections, through not opening polling stations abroad, etc.

“To prevent this, such an opinion was also voiced that they should be given the opportunity to come to Georgia and vote here. There will be a mobilization, and the more they anger the diaspora, the more the diaspora will be involved in the elections,” the President noted.

“Let’s remember that today there are more than a million Georgians abroad, in Europe and America, and more than 17,000 participated in the last elections. It is very easy to increase this number, and the government should not think that they will be able to stop the diaspora from voting and making their independent choice, because they are an integral part of our country and do a lot for our country.

“It will be a completely new election, it will be a referendum, not between war and peace, but between the dark Soviet past and the bright future!

On balance it is probably a good time to buy- if Georgia dream are defeated the shares will bounce sharply. Prbably worth keep an eye on opinion polls in October.

AlexB1966

9th Aug

I sold out everything (CGEO, BGEO, TBCG) on 13 May as things were looking a bit dicey. Subsequently I have bought almost everything back at lower levels. Even if the politics deteriorates these are super cheap and (fingers crossed) I don't see Georgia turning into Russia (though I lost a fair bit on Russian equities in 2022). The yields are good as well. I plan to visit Georgia during the spring to kick the tyres (depending on how the election goes!)

John LA

22nd Aug

good results published today, sounds very positive

Bank of Georgia (LON:BGEO) They do- and a share buyback.

Update from TBC Bank (LON:TBCG) chief economist "

August growth momentum remains strong

• Momentum has remained strong in August thus far, implying upside potential to our 7.4% full year growth baseline scenario, with our proxy for conventional tourism, though broadly flat on a seasonally adjusted basis, pointing to a sustained sizeable contribution in annual terms;

• Net foreign currency inflows demonstrated another strong print in July, following up on a record-high level in June, albeit, despite a significant growth in exports, particularly the domestic component, the trade balance worsened due to imports also strengthening;

• On the migration impact we note that, per TBC data, the moderation appears to be not due to the number of transactions but rather the declining average transaction value, particularly for Russian citizens;

• According to our estimates, sentiments indicate no particular pressure on GEL at this point, although, if post-election depreciation expectations were to prevail, the expected dynamics would most likely, at least to a large extent, materialize before elections;

• Keeping the FX forwards market in focus, we note that, while an important GEL driver combined with net inflows, adverse shifts in sentiments can also be seen as a buffer, in a way we would say like central bank FX reserves, but, unlike the latter, to be utilized in good times.

Graham Wells

Hi All,

I have no experience of investing in this area but I'm thinking of dipping my toe in. The Bank of Georgia (LON:BGEO) results today look very good. But in your experience which one of these 3 looks the best punt given the expected growth metrics, current profits, dividend yield and future profits?

Appreciate your comments,

Graham.

You could buy Georgia Capital (LON:CGEO) and have exposure to both BGEO and a portfolio of interests- Chemists, schools etc. TBC Bank (LON:TBCG) may offer less risk as it is diversifying into Uzbekistan. Be aware though elections are due in a couple of months and it could be bumpy. If the Georgia Dream lose, then the market should move upwards. If they win who knows see this "Georgia’s ruling party Georgian Dream has vowed to ban the largest opposition force, United National Movement (UNM), if it wins October’s parliamentary election." They appear to be following Russia as a model, whereas it would appear many want to join the EU and keep ties with USA. I hold Bank of Georgia (LON:BGEO) only at the moment.

Thanks Charles,

I’ll do some more research on these. But you have at least given me some more options and something else to think about.

Regarding the elections, are the SP’s being held back until the outcome? And whether to wait for the results and risk that SP’s go up a lot? That’s the question I suppose.

Thanks again, Graham.

The market came back recently- hence I bought back into BGEO. I follow this english Newspaper Georgia Today https://georgiatoday.ge/

That’s very useful.

Martin VT

26th Aug

Georgia Capital (LON:CGEO) is currently valued at the value of its Bank of Georgia (LON:BGEO) holding plus their next year dividends…everything else in the business ‘for free’.

However I’m waiting to see the outcome of the election before considering going back into these shares (previously I have held substantial holdings in both companies). The political rift we saw in the spring protests is enormous, the current Government and its supporters seek a close rapport with Russia, the younger generation want to be part of the EU and western attitudes. I’m nervous for a country that I have come to like.
Fingers crossed that the country finds a practical and stable way forward,

I hold BGEO but may well sell before election. Downside of CGEO is it does not pay a dividend although as you say get the rest of the portfolio for very little.

27th Aug

Support for Georgia Dream does appear to be weakening. I am not sure how many of the other parties would/could form a coalition though. And whether any would form a coalition with GD. Lelo is a centrist liberal party. UNM is liberal and pro-west. Ahali is liberal pro-europe. For Georgia is pro-europe. Droa is liberal Centre-Right. EG is pro europe n(EG=European Georgia)

28th Aug

Thanks Charles, this is interesting. Though I don’t know if GD falling in polls is a good thing or not, as they seem pretty ruthless. The split in politics between GD focus on Russia and others focus on EU and the West makes our travails over Brexit seem kindergarten…and of course Russia still holds some of Georgia after its invasion earlier this century.

29th Aug

I have sold my holding in Bank of Georgia (LON:BGEO) - just read this and I suspect the next weeks will be more of the same "

Agenda.ge, 29 Aug 2024 - 13:06, Tbilisi,Georgia

Givi Mikanadze, the Chair of the Parliament’s Committee on Education, Science and Youth Affairs, on Thursday alleged “gross interference” by the United States-based National Democratic Institute in electoral processes ahead of the parliamentary elections scheduled for October 26.

Mikanadze claimed the organisation had funded and organised meetings of domestic opposition parties “in various regions”.

During the reporting period, several facts of gross interference in the electoral processes by a foreign power were revealed. Meetings of opposition political parties and their representatives in various regions of Georgia were funded and organised by the National Democratic Institute”, he said.

The official noted the first such meeting was held on June 17 in the country’s western city of Kutaisi, where opposition leaders Salome Samadashvili, Khatia Dekanoidze, Ana Tsitlidze, Teona Akubardia and Tamar Kordzaia were given the opportunity to carry out campaigning with local citizens.

He also noted a meeting on July 13, when leaders of the opposition United National Movement, Lelo, Girchi, Girchi - More Freedom and Yes to Europe - Strategy Aghmashenebeli parties held a meeting with citizens in the town of Tsnori."

2nd Sep

From Citywire today- I have sold but will look to re-buy post the elections.

"The Bank of Georgia (BGEO) is ‘faster and stronger’ than Peel Hunt had been expecting.

Analyst Robert Sage retained his ‘buy’ recommendation and increased the target price from £60 to £62 on the Citywire Elite Companies + rated group, which fell 1.9% to £45.24 on Friday.

Second-quarter net profits ‘represent a faster run rate than we had anticipated, reflecting in particular stronger loan growth of 8.6%’, said Sage.

Higher-than-expected loan balances should also facilitate higher future profits ‘without detriment to returns’.

This encouraged Sage to lift his underlying earnings-per-share estimates by 9% for 2024, 7% for 2025 and 9% for 2026.

‘The Bank of Georgia is running faster and stronger than we have expected, leading to earnings upgrades and an increase in our target price,’ he said."

5th Sep

Interesting article re Georgia /old USSR states and relations with Putin's Russia. https://theconversation.com/pr...

6th Sep

https://georgiatoday.ge/elene-...

There appear to be a number of articles ramping up the fundamental pro West/pro Russia split and conflict at the heart of Georgian politics as the general election approaches in October.

BGEO and CGEO have been amongst my largest holdings for years, but I no longer have either. Good luck to any who hold through the election, but I will re-evaluate my position in November.

Thu 4:17pm

Article re future from TBC https://tbccapital.ge/en/publi...

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Charles Mitchell

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