Georgia Capital, a UK-listed investment trust that owns around five per cent of Georgia’s economy, has charted its road to recovery after crashing during the country’s protests.
In May, protests began against the Georgian parliament in Tbilisi due its new foreign agents law, which will see NGOs and independent media receiving 20 per cent of their funding from abroad required to register as an “agent of foreign influence” with the Georgian Justice Ministry.
Human Rights Watch described the standards as “onerous reporting requirements and inspections”, with other groups having said the foreign agent tag is designed to make it easier for the government to discredit its opponents.
The trust’s stock price crashed more than 30 per cent during May, but has slowly started to recover, climbing 24 per cent since its nadir at the start of June.
Now, its stock price is up 1.4 per cent since the start of the year, and the trust is looking to recover the assets lost by the hit to the Georgian economy.
The group’s underlying assets dropped by 13.8 per cent between March and June, which it credited to the “recent volatility in the regional geopolitical environment” in its interim results.
Despite this, revenue in Georgia Capital’s portfolio companies was up six per cent, with operating profit rising by 17.7 per cent over the three months.
The group has bumped $15m into its existing share buyback programme, bringing the total amount spent on the planned $110m programme to $40m.
The performance of its private portfolio has given the group hope, with chair and CEO Irakli Gilauri describing it as “exceptionally strong”.
“Despite the recent volatility in the regional geopolitical environment, real GDP in Georgia expanded by nine per cent” in the first half of the year, he noted.
“While the strong operating performance of our private portfolio positively impacted the 2Q24 valuations, market movements in discount rates more than offset this strong operational progress,” added Gilauri.
Nevertheless, the chair was hopeful that the volatility experienced by the trust would soon be a thing of the past, and the group planned to “continue enhancing and developing our high-quality assets, where we see even greater potential for value creation”.