research reports

Home > research reports
Username
Password
remember
Forgot password?
Not a member yet? Register now
Year: Month: All releases Economy Sectors Companies
2 / 46

Regional Fixed Income Market Watch | February 2019

20 Mar, 2019

Highlights

  • Real GDP in the US grew at a 2.6% annualized rate (initial estimate) in 4Q18 after 3.4% growth in 3Q18. Unemployment rate was 3.8% in February 2019, down from 4.0% in previous month.
  • EU19 real GDP grew by 1.1% y/y in 4Q18 after 1.6% y/y growth in 3Q18. Unemployment rate in EU19 was unchanged at 7.8% in January 2019.
  • Turkish economy contracted by 3.0% y/y in 4Q18, bringing 2018 real GDP growth at 2.6% y/y.
  • In January 2019, economic growth was 6.0% y/y in Armenia, 3.5% y/y in Georgia, 2.9% y/y in Kazakhstan, 2.9% y/y in Azerbaijan, 0.7% y/y in Belarus and 0.2% y/y in Russia, based on rapid estimates.
  • Annual inflation in the US was 1.5% in February 2019, down from 1.6% in previous month. Based on the Eurostat flash estimate, annual inflation in EU19 was 1.5% in February 2019, up from 1.4% in January 2019.
  • In February 2019, annual inflation was below the target level in Armenia (1.9%) and Georgia (2.3%); inflation was within the target range in Kazakhstan (4.8%), and above the target in Russia (5.2%), Belarus (6.2%), Ukraine (8.8%) and Turkey (19.7%). Annual inflation was 2.2% in Azerbaijan.
  • As of 19 March 2019, monetary policy rate was cut by 0.25bp to 6.5% in Georgia, by 0.25bp to 9.0% in Azerbaijan and has remained unchanged in other countries.
  • In February 2019, Fitch upgraded Georgia’s sovereign credit rating to BB from BB-, with stable outlook.

 


Please see the full report for detailed coverage of the fixed income markets of Georgia, Armenia, Azerbaijan, Belarus, Kazakhstan, and Ukraine.


Download report (English)
Read More

Georgia's Energy Sector - Changes Create Opportunities

6 Mar, 2019

Electricity is a capital-intensive sector with reasonable profits. Georgia’s investor-friendly regulations, upgraded transmission networks and export opportunities have attracted substantial investment in recent years. The energy sector was the second-largest FDI recipient in 2007-17. The sector’s EBITDA margin averaged 19% in 2012-17, above the business sector’s level of 13%

Electricity consumption in Georgia increased by 1.6x (4.4% CAGR) in 2008-18 and is expected to double by 2030. Electricity consumption is correlated with GDP, and in recent years growth in consumption has been driven by the non-residential sector. We project average annual growth of 5.7% in consumption in 2019-30, with the commercial sector being the key driver. As a result, by 2030, electricity consumption is expected to almost double and reach 24.5TWh.

Despite growth, generation capacity is still insufficient to satisfy demand. Since 2012, Georgia’s installed capacity has increased by 25.3%, reaching 4.2GW in 2018. However, this was not enough to satisfy the growing demand, and Georgia became a net importer of electricity after having been a net exporter in 2007-11. 

Georgia can become a net exporter of electricity again. Georgia has a solid pipeline of power plants, supported by government policy. Currently, 150 ongoing projects (installed capacity 5.4GW) are at various stages of development with identified investors. However, government policy has tightened significantly since 2016, which makes full implementation of the pipeline less likely. Nonetheless, we estimate that even partial implementation of these 150 projects will make Georgia a net exporter of electricity from 2021. Without the addition of new capacity, Georgia might need to import electricity, even in the summer months. 

A new wave of reforms will result in a competitive market model and attract new types of investor. Georgia became a member of the Energy Community of EU and its neighbours in 2017, obliging it to harmonize its legislation with EU standards in the energy sector by 2025. This will eventually lead to a new market model with more competitive and transparent rules for power trading. This new energy market is expected to attract new types of investor, and it opens up the possibility of trading via Turkey to Eastern European countries, since Turkey is connected to the EU market and has a compatible market structure.

We expect fundamental changes in the energy market. Upcoming reforms should shorten the settlement period from one month to one day/hour, introduce an imbalance settlement mechanism, diversify power trading channels via the creation of day-ahead and intraday markets, increase the number of direct consumers, enhance power trading activities, and unbundle distribution and supply. In the context of these upcoming changes, we believe that future market prices will be dictated by neighbouring market prices and decisions on the integration of electricity generated from old regulated HPPs and from HPPs with Power Purchase Agreements.

Turkey remains an attractive export market for Georgia. Despite the dramatic fall in Turkish electricity prices in 2012-18, Turkey’s geographic proximity, its compatible market structure, and the expected growth in prices will see it remain an attractive export destination, in our view. Another promising export market is Armenia, despite its small size, as the country is expected to face an electricity deficit due to the decommissioning of a nuclear plant in 2026. 
 

Report price: GEL 3,000 
Download: Report and payment details


Download report (English)
Read More

Georgia's Tourism Sector - Tourism Market Watch | February 2019

5 Mar, 2019

Tourist arrivals increased 5.1% y/y in Feb-19, after growing 5.9% y/y in previous month. Same-day arrivals continued to decline, down 10.7% y/y in Feb-19, after 13.1% y/y drop in previous  month. As a result, total international visitors to Georgia were down 1.2% y/y to 0.4mn persons in Feb-19

Russia was the largest source of visitor growth, followed by Israel. Visitors from the EU were up 29.0% y/y to over 16k visitors, with Germany and Poland driving growth. From non-traditional markets visitors were pronounced from India, China and Philippines

From major source markets, visitors from Turkey continued to fall for a 6th consecutive month, mostly reflected in reduced same-day arrival numbers. Arrivals from Iran almost halved (down since Jun-18 with the exception of Nov-18), partly explaining slowdown in tourist growth figures

We expect tourist arrival growth to accelerate from 2H19, due to high season and fading effect of reduced visitors from Iran and Turkey

Please see the full note here, which brings together tourist arrival data for reporting month, most recent statistical information available in the sector and 2019 forecast.


Download report (English)
Read More

Regional Fixed Income Market Watch | January 2019

22 Feb, 2019

Highlights

  • EU19 real GDP grew by 1.8% y/y in 2018. Unemployment rate in EU19 was unchanged at 7.9% in December 2018.
  • China’s economy grew by 6.6% y/y in 2018. The growth was slowed in 2H18.
  • In 2018, economic growth was 5.8% y/y in Armenia, 4.8% y/y in Georgia, 4.1% y/y in Kazakhstan, 3.3% y/y in Ukraine, 3.0% y/y in Belarus, 2.3% y/y in Russia and 1.4% y/y in Azerbaijan, based on rapid estimates.
  • Annual inflation in the US was 1.6% in January 2019, down from 1.9% in previous month. Based on the Eurostat flash estimate, annual inflation in EU19 was 1.4% in January 2019, down from 1.6% in December 2019.
  • In January 2019, annual inflation was below the target level in Armenia (0.6%) and Georgia (2.2%); inflation was within the target range in Kazakhstan (5.2%), and above the target in Russia (5.0%), Belarus (5.8%), Ukraine (9.2%) and Turkey (20.4%). Annual inflation was 1.7% in Azerbaijan.
  • YTD, monetary policy rate was cut by 0.25bp to 6.75% in Georgia, by 0.25bp to 5.75% in Armenia, by 0.5bp to 9.25% in Azerbaijan and has remained unchanged in other countries.
  • Moody’s upgraded credit rating of Russia to Baa3 from Ba1 and changed the outlook to stable on 8 February 2019.

 

Please see the full report for detailed coverage of the fixed income markets of Georgia, Armenia, Azerbaijan, Belarus, Kazakhstan, and Ukraine.


Download report (English)
Read More
what we do management media center transactions contact
Important Disclaimer Privacy Policy Terms & Conditions Risk Warning
© 2014 Galt & Taggart | Creating Opportunities
Created by sbdigital