Pension funds have been reducing exposure to the uk market for several years and now hold a record low allocation to uk equities.
It has been suggested that the Labour government will make changes to uk pension fund regulations in order to make them hold more uk investments.
Perhaps stocks such as this, uk listed with overseas earnings will be in demand later this year. |
So my post of 24 April suggesting that there was plenty more upside here has not aged well...for now at least...!
No view on the politics but the latest monthly data from the National Bank of Georgia very encouraging. Net income in April was in-line with each of the previous 3 months and then was up c20% in May in spite of all the civil unrest. Annualised ROE for 2024 continues to be very high at 33.63% and actually ticked up a bit in May.
So the fundamentals of the business still look rock solid whilst the valuation remains extreme - somewhere around 4x 2024 EPS, 6%+ divi and trading below BV - given the high returns being generated and the growth profile.
So, at the risk of giving the stock another kiss of death, plenty more upside here! Next catalyst: Q2/H1 numbers due mid-August. |
Surely won't finish "red" today?
One of the funniest posts I've seen in a while :-)
Yep, agree with you gobbie.
I think there are elections this October with plenty of potential for civil unrest in the run-up which will only make the market nervous.
Good figures though. |
The critical line in the report is that political uncertainty will remain until the election in October 2024. This will likely overshadow business performance for the foreseeable future. Just too hard to predict direction of this so for me too risky right now even with the strong financial performance. I enjoyed the ride here but will sit on the sidelines for the foreseeable future |
Mortimer, You're a funny Guy :-) |
Surely won't finish red today? |
Excellent update |
Courtesy of the Guardian.
A “foreign agents” law that has brought hundreds of thousands of people on to the streets of Georgia’s capital of Tbilisi could be dropped in return for a package of economic and security support from Washington, the ruling party has hinted.
In response to a draft bill tabled in the US Congress that would open up talks on a trade deal in return for fresh commitments on civil rights, the governing Georgian Dream party said in a statement that it would need to see progress on such promises within a year. |
looks like the company is keen to get news out |
This new bill highlights who is funding ngo's, which is highly desirable.
There are mass demonstrations with both russian and american nationals among those arrested.
What is going on ?
This presents an alternative perspective. |
That's because the Georgian banks are far more profitable and have better growth prospects.
LLOY
ROCE 0.9%
Operating Margin 10.9%
HSBA
ROCE 1.0%
Operating Margin 36.7%
BGEO
ROCE 5.2%
Operating Margin 58.6%
Risk here has elevated due to the "Russian Law" issue, but the share price has fallen quite a lot already.
We'll see. |
Risk is too high here now |
Price to Book valuation of UK listed Banks
Close Brothers 0.35
Barclays 0.37
Secure Trust Bank 0.39
Standard Chartered 0.47
Lloyds 0.65
Natwest 0.67
HSBC 0.9
TBC Bank 1.3
Bank of Georgia 1.6 |
Price to book here is also very high in comparison to UK banks |
The Georgian currency is a very big risk here and if the GEL was to return to the same average exchange rate against the USD and GBP as in 2021 then these shares would fall by about 30%
In May 2021 the USD bought 3.45 GEL but it only buys about 2.75 now
And in May 2021 the GBP bought about 4.80 GEL but it only buys about 3.50 now
There does not seem to be any good reason for this huge rise in the GEL against the USD and GBP in the last 3 years and so it is likely that the GEL will return to a more normal level against these currencies
This would mean a fall of about 30% in the shares
The dividend would also fall by about 30% |
staring to bottom out? |
Georgian and Armenian economies were helped by the huge influx of Russian money and resources last year. This will subside and the Armenian GDP will revert to around 5% this year. That is if the current government has the b*lls to stand-up to the unreasonable Azeris demands. |
Yes it's really odd isn't it???I was aware of the US law and found it quite amusing that the USA were urging Georgia not to pass this law which is very similar to their own.I think the problem here is the "fear of the unknown" factor.Also...if it scuppers Georgia's chance of easy trade with the EU it may limit the economies growth which will need new markets of its to keep up the current growth rate. |
JM, Similar laws are in place in the usa and many european countries. I have sought to understand how this law differs and why it is so contentious.
This article helps. |
I think there is a similar law in Russia which the authorities use to clamp down on anyone/thing that is not pro-government, hence the populations concern.
Think the final reading/passing of the law was scheduled for today...has that happened? |
The law has been passed.
I don't understand the protests.
What's wrong with knowing what foreign money and influence is taking place. |
If the law gets passed that may be the last time you read anything like that :-) |
I read that of 20 disruptive protestors arrested last week, one was russian and two were american! |
Big vote today in Parliament regarding "Russian Law". |
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