Georgian companies began to issue securities – the companies associated with Bank of Georgia, in particular, the development company M2 and the Tbilisi water distribution company are actively engaged in this activity.
Placement of shares on the stock exchange is provided by a subsidiary of Bank of Georgia – Galt & Taggart. Analysts believe that the development of the securities market is very important for Georgia, especially in terms of attracting investment.
The companies issued mainly bonds in the amount of GEL 20 million. The cost of one bond with maturity of 2 years is GEL 1 000. Given the fact that the National Bank’s refinancing rate is 8%, the annual profitability of shares reaches about 15%.
It is noteworthy that in March 2015 the representatives of the international rating agency Fitch held a meeting with the leaders of Georgia’s 15 largest companies, and the possible issue of bonds for the Georgian market was among the discussed topics.
Thus, the securities market is reviving, though slowly. According to Archil Gachechiladze, the Chairman of the Supervisory Board of Galt & Taggart, a successful placement of the companies’ shares on the stock exchange proved the trust in them.
“The Georgian stock market is in its infancy, and 2016 will be much more active in this regard. Moreover, interest on bank deposits in foreign currency fell sharply, in the case of proper regulation, the bonds will be a good investment of savings,” he explains.
In the words of the economist Emzar Jgerenaia, the securities market in Georgia will grow rapidly, and the companies will be able to attract investment without the constant need to go to the bank.
“Now many people face a problem where to invest? Large companies have to attract investment through the sale of securities, and not only through obtaining loans from banks,” he notes.