Gigla Mikautadze, the project manager of ReforMeter, was invited to a business forum dubbed “Bond Market in Georgia” organized by TBC Capital on June 15, 2018. One of the major highlights of the forum was a research paper entitled “Bond Market in Georgia”, which concerned the trends and challenges that TBC Capital presented to the forum attendees.
According to the paper, the corporate bond market followed in the footsteps of the government bond market, but at a slower pace. Bank of Georgia issued the first corporate bond in 2005 (USD 2 m in par value), but the public corporate market did not grow noticeably until 2014. In that year, the NBG started accepting GEL-denominated corporate bonds as collateral from commercial banks, fueling both bond issuance and commercial activity. As a result, public corporate bonds outstanding more than quadrupled from GEL 56 m in 2014 to GEL 232 m in 2017. Nevertheless, the ratio publicly issued corporate bonds to GDP is still low at just 0.6% in 2017.
Scope Group, a German rating company which recently started operating in Georgia, presented their work to the forum attendees as well. The presentation section of the forum was followed by a panel discussion in which Gigla served as a panel member. Gigla provided the audience with information about the ongoing capital market and pension reforms that the Government of Georgia is currently undertaking.
Although moving forward, the forum guests mentioned that the Georgian corporate bond market is still underdeveloped. It is expected that Georgian companies will become more active in this direction, which is partially influenced by the newly-established pension fund that can serve as a large institutional investor.
TBC Capital was established in 1999 and is an advisory arm of TBC Bank, offering Corporate Advisory, Research and Brokerage solutions in Georgia. Until 2015, it was largely concentrated on brokerage and custody solutions. Afterwards, the company launched Research and Corporate Advisory units, transforming the company from a purely brokerage unit into an investment banking boutique, providing services tailored for the Georgian market.
