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IMHO the "Russian Law" is simply a tool to enable Ivanishvili and fellow oligarchs to prevent any further integration with Europe. Their primary motive is that 'unorthodox' financial arrangements thrive better under authoritarian regimes with tight controls over critics than they do in democracies. But the GD also enjoy the support of traditionalists - especially the older generation in rural areas - who fear that Georgian values are under threat from liberal Western ideologies (e.g. the LBTQ+ movement). Given their majority, I think GD will see their law passed. We can then expect volatility in the banking SPs, but I don't think their businesses will be much affected in the medium/long term (because a pro-Russia outcome likely will attract more Russian money to offset less European money, and vice-versa).
Completely disagree. The president's "veto" was always expected, and is purely symbolic as can be overruled by Georgian Dream, which is what they currently are showing every intent of doing, thus signing the "Russian Law" into law. The protests are about that, and are what persuaded Georgian Dream to discontinue attempts to bring the law in last year. If the law is voted in as expected, then expect another significant drop in SP. If the mass protests and/or EU and USA pressure does persuade Georgian Dream to drop the law (again), then expect a SP rise, but with the continued risk of a possible Russian invasion (as with Abkhazia and South Ossettia) a material ongoing risk to Georgia's future stability (and thus the SP of BGEO).
This could gravitate back up now it is calming down a bit and El Presidente has interjected. The copycat protests are a global thing at the moment so has little to do with government decisions.
Manfor, you may be right on currency risk - certainly it can't be ignored. It's interesting though that 10 years ago the GEL was stronger at 1.72 and 5 years ago about the same exchange rate as now so hard to say what normal is.
Price to book valuation here is also very high in comparison to UK 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
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 gainst 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%
I started BGEO in July 2022 at just over 1500 and sold most in early April 2024 at 4980, so can't complain. I've added a few at 4105 in the hope that it will eventually get back above 5000 and give divis in the meantime. Why can't politicians behave themselves? (I blame their parents). Good luck all.
I've been hoovering up Tbc the last few days. Very impressed with the rise today. I'm not a day trader so not intersted in daily gains. Great dividend yields. Way overdone in my views. Same here buying up small tranches.
Dram agree the FX risk but personally was fortunate to pick these up at a silly price. 3 more years of divis and I have the shares for free. I bought more at £40 as I think it was blood on the streets time, a bank with a yield of 7% . Agree currency could take a bashing but I believe whatever happens this is a well run bank and will adapt to whatever lies ahea
Interesting that, as I type, TBCG is up 5%. Waiting to see if BGEO benefits from a read over.
Beware the fx risk. BGEO dividend is in GEL, which is losing value because of the situation.
I think, were I long I too would at least be de-risking by now. However, I'm contemplating that a modest punt at 38xx or better might be reasonable, despite hoi polloi having now appreciated the extent of the threat from Rxssia presently.
Sadly need to sell this.
Just knew something would happen. Genuinely thought I had found an under the radar gem.
Don't fully understand what's going on as there's so little info on this share.. But I'll look at wider news.
To much risk in this now.
Good luck (and to all shareholders) - I can't see sentiment and SP recovering unless either (i) or (ii) in my earlier post should happen.
I've just added a few @ £40, can't resist with the yeald around 7% tucked away and forget. Good luck any holders still in
Such a shame this great share is being dragged down by the current turmoil. I sold out at just over £50, and will be sitting on the sidelines, watching closely until either (i) the law is withdrawn (again), or (ii) elections in Oct manage to oust Georgian Dream. My heart goes out to the brave youth of Georgia - at the end of the day they're the ones who matter, not a company share price. :(
The bill has passed, no surprise. You can almost see Georgia on a slippery slope to turning into another Belarus unless something drastic happens to get rid of the Putin puppets currently in control.
If, despite the scale of protest, the 'foreign agents' bill is passed today I fear all hell will break out in Tbliisi. Even if the EU and UK do not apply sanctions, civil unrest is bad for market sentiment and even good companies experience collateral damage. There is a fine line between buying the dip and catching a falling knife.
CGEO has different exposure - sure biggest holding is BGEO and they are BGEO's biggest shareholder...
I'll keep buying on dips - it's a cracking high growth business throwing off cash (not many of those around). Russia is not going to invade, they aren't going to change the government or kick out foreign companies...if you know anything about Georgia this is a completely different context to Ukraine.
Yes, they've been there and done that. Now seem to be focusing on getting control through pro-Putin politicians and legislating against any opposition.
Yes, there was a rumour that Russia was intending to invade Ukraine, but the Russians denied it, so business as usual - until 24th Feb 2022...
I am in because this remains a good company and the overdone drop is based on rumour , not fact
I've been looking for a buy-in point for a while. This dip is tempting, but I think prudence suggests the risk drops off a cliff if Russia is demonstrably in-check. On balance I'm going to let some time go past before I press the buy button.
Not sure whether to buy in here. Are we expecting it to drop anymore?