Panmure Gordon highlights buying opportunity at Bank of Georgia

17th Mar 2014 10:09

The recent sell-off in Bank of Georgia shares due to the Ukraine crisis is a good reason to buy the stock, according to Panmure Gordon."The shares have fallen 12% from the high of 2,500p on concerns over the Ukraine situation, combined with an attempted placing last week which was pulled," said Analyst Keith Baird.He explained that this weekend's overwhelming vote in favour of Crimea re-joining Russia was expected given that there is a Russian ethnic majority in the region."Our assumption has been that Russian takeover in the Crimea represents the effective partitioning of the Ukraine which will be accepted by the West without the need for escalation into outright war. It should help free up the rest of the Ukraine to pursue a European destiny," he said."No one to my knowledge expects any action against Georgia which is a different situation strategically, politically and ethnically."Baird said that assuming no further escalation in the crisis, there should not be any long-term adverse impact on the Georgian economy which should revert back to trend growth of 5% this year."This is a good buying opportunity," he said.This economic growth, along with positive operating leverage, should help Bank of Georgia report 50% aggregate growth in profits from 209m Georgian lari in 2013 to 300m lari in 2015.The stock was down 0.7% at 2,178p by 10:39 on Monday.BC