Highlights

  • FED decided not to raise rates in the September 2016 meeting, increasing the likelihood of a rate increase in the December 2016 meeting.
  • According to preliminary data, growth remained in negative territory in Azerbaijan and Belarus, with the respective economies contracting 3.1% y/y and 3.0% y/y in 8M16.
  • Contraction in Armenia eased from 4.3% y/y in July 2016 to 0.5% y/y in August 2016. Growth accelerated in Georgia and Ukraine to 2.9% y/y and 2.7% y/y, respectively, from 2.1% y/y and 1.7% y/y in the previous month, while growth in Kazakhstan retreated from 0.6% y/y to 0.2% y/y.
  • Inflation remained at double-digit levels in Kazakhstan, Azerbaijan, and Belarus; retreated from 7.2% y/y in July 2016 to 6.9% y/y in August 2016 in Russia; and increased from 7.9% y/y to 8.4% y/y in Ukraine. Inflation in Georgia was below 1.0% y/y in August 2016, while the price level in Armenia declined 1.9% y/y after a 1.3% y/y decline in July.
  • Development company, M2, completed its fourth successful issuance of US$-denominated bonds – the largest to date by a Georgian company. The US$ 25mn issuance on October 7, 2016, carries an annual coupon rate of 7.5%, payable semi-annually, with a maturity of three years. Galt & Taggart served as the sole placement agent. The bonds will be listed on the Georgian stock exchange.

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