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Year: Month: All releases Economy Sectors Companies
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Regional Fixed Income Market Watch | September 2019

18 Oct, 2019

Highlights 

  • US real GDP growth was an annualized 2.0% (third estimate) in 2Q19, after 3.1% growth in 1Q19. Unemployment rate was 3.5% in September 2019, down from 3.7% in August 2019.
  • In August 2019, economic growth was 7.6% y/y in Armenia, 7.3% y/y in Kazakhstan, 5.8% y/y in Georgia and 2.2% y/y in Russia, based on preliminary data. In 8M19, real GDP growth was 2.4% y/y in Azerbaijan and 1.1% y/y in Belarus.
  • Annual inflation in the US was 1.7% in September 2019, unchanged from the previous month. Based on the Eurostat flash estimate, annual inflation in EU19 was 0.8% in September 2019, down from 1.0% in the previous month.
  • In September 2019, annual inflation was above the target level in Belarus (5.3%), Georgia (6.4%), Ukraine (7.5%) and Turkey (9.3%); inflation was at targeted level in Russia (4.0%) and within the target range in Kazakhstan (5.3%); inflation was below the target in Armenia (0.5%). Annual inflation was 2.1% in Azerbaijan in September 2019.
  • Monetary policy rate increased by 50 basis points to 7.5% in Georgia on 25 September 2019 and has remained unchanged in other countries during end-September -1H of October 2019.
  • In October 2019, S&P upgraded Georgia’s sovereign credit rating to BB from BB- with a stable outlook and Ukraine’s rating to B from B- with a stable outlook. 



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


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Georgian Railway - 1H19 update

8 Oct, 2019

GR released 1H19 unaudited results together with Management Discussion and Analysis. Revenue was up 5.7% y/y to US$ 85.1mn supported by increased freight traffic. Operating expenses, which are mostly GEL-denominated, decreased 14.8% y/y to US$ 65.2mn (-6.6% y/y in GEL). Consequently, adjusted EBITDA improved and reached US$ 35.9mn (+25.4% y/y). Adjusted EBITDA margin also hiked to 42.2% from 35.6% a year ago. GEL’s 17% depreciation against dollar in 1H19 led to a non-cash FX loss of US$ 31.7mn, which dragged down net income to a negative US$ 15.3mn. 

GR’s freight transportation revenue, traditionally the most important revenue category, was up for the first time in the last four years. Revenue stood at US$ 85.1mn up 5.7% y/y. Freight transportation revenue, up 15.4% y/y to US$ 54.1mn, had the largest positive impact on the overall revenue growth in 1H19. Freight handling revenue also increased 10.1% y/y to US$ 11.1mn, while logistic service revenue dropped 35.8% y/y to US$ 8.5mn. Passenger traffic revenue, mostly generated in GEL, also continued growing, up 9.2% y/y to US$ 4.2mn (+19.8% y/y in GEL). Other revenue was up 26.5% y/y to US$ 2.1mn driven by sale of scrap.

GR recognized significant impairment loss in 2018 as a result of impairment testing of its Property, Plant and Equipment (PPE). Due to 5 consecutive years of decline (cumulative drop of 56.1% in 2018 vs. in 2014) in its main revenue stream – freight transportation, GR assets’ value in use was re-assessed and was found to be US$ 272.8 (GEL 691.4mn) lower than the carrying amount. This led to a recognition of the large impairment loss in 2018. 

1H19 operating expenses, which are mostly GEL-denominated, declined 14.8% y/y to US$ 65.2mn. This was mostly caused by significant drop in asset-base (PPE) and related reduction in depreciation expenses (down 36.4% y/y to US$ 15.3mn). On the other hand, employee benefits and electricity and other consumables expenses increased, 8.0% y/y and 7.1% y/y, respectively in GEL terms. However, they still reduced in dollar terms as GEL depreciated.


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Regional Fixed Income Market Watch | August 2019

20 Sept, 2019

Highlights

  • US real GDP growth revised down to an annualized 2.0% (second estimate) in 2Q19, from an annualized 2.1% (advance estimate). Unemployment rate was 3.7% in August 2019, unchanged since June 2019.
  • In 2Q19, real GDP increased by 1.2% and by 1.4% in the EU19 and the EU28, respectively. In July 2019, unemployment rate was 6.3% and 7.5% in the EU19 and the EU28, respectively.
  • Turkish economy contracted by 1.5% y/y in 2Q19 after falling 2.6% y/y in 1Q19.
  • In July 2019, economic growth was 8.1% y/y in Armenia, 6.1% y/y in Georgia, 5.1% y/y in Kazakhstan and 2.6% y/y in Russia, based on preliminary data. In 1H19, real GDP growth was 2.5% y/y in Azerbaijan and 1.3% y/y in Belarus.
  • Annual inflation in the US was 1.7% in August 2019, down from 1.8% in previous month. Based on the Eurostat flash estimate, annual inflation in EU19 was 1.0% in August 2019, unchanged from the previous month.
  • In August 2019, annual inflation was above the target level in Russia (4.3%), Georgia (4.9%), Belarus (5.7%), Ukraine (8.8%) and Turkey (15.0%); inflation was within the target range in Kazakhstan (5.5%), and below the target in Armenia (0.6%). Annual inflation was 2.4% in Azerbaijan in August 2019.
  • As of 17 September 2019, monetary policy rate increased by 0.25bp to 9.25% in Kazakhstan and by 0.5bp to 7.0% in Georgia, while it was cut by 0.25bp to 5.5% in Armenia, to 7.0% in Russia and to 8.0% in Azerbaijan, by 0.50bp to 16.5% in Ukraine and by 3.25bp to 16.5% in Turkey. The key rate has remained unchanged in Belarus.
  • As of 17 September 2019, Fitch upgraded Ukraine’s rating to B from B- with a positive outlook and Moody’s upgraded Armenia’s rating to Ba3 from B1 with a stable outlook.


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


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Regional Fixed Income Market Watch | July 2019

21 Aug, 2019

Highlights

  • US real GDP growth slowed to an annualized 2.1% (advance estimate) in 2Q19, after 3.1% growth in 1Q19. Unemployment rate was 3.7% in July 2019, unchanged from the previous month.
  • EU19 real GDP grew by 1.1% y/y in 2Q19 after 1.2% y/y growth in 1Q19. Unemployment rate in EU19 was 7.5% in June 2019, down from 7.6% in the previous month.
  • In June 2019, economic growth was 5.0% y/y in Georgia, 4.3% y/y in Kazakhstan, 3.4% y/y in Armenia and 1.9% y/y in Russia, based on preliminary data. In 1H19, real GDP growth was 2.4% y/y in Azerbaijan and 0.9% y/y in Belarus.
  • Annual inflation in the US was 1.8% in July 2019, up from 1.6% in previous month. Based on the Eurostat flash estimate, annual inflation in EU19 was 1.1% in July 2019, down from 1.3% in June 2019.
  • In July 2019, annual inflation was above the target level in Georgia (4.6%), Russia (4.6%), Belarus (6.0%), Ukraine (9.1%) and Turkey (16.7%); inflation was within the target range in Kazakhstan (5.4%), and below the target in Armenia (1.7%). Annual inflation was 3.7% in Azerbaijan in July 2019.
  • As of 19 August 2019, monetary policy rate was cut by 0.25bp to 8.25% in Azerbaijan and to 7.25% in Russia, by 0.50bp to 9.5% in Belarus and to 17.0% in Ukraine and by 4.25bp to 19.75% in Turkey. Key rate has remained unchanged in other countries.
  • Fitch reaffirmed Georgia’s rating at BB with a stable outlook and upgraded Russia’s rating to BBB from BBB- with a stable outlook in August 2019.

 

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


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