Both Georgia-focused banks listed in London saw their share prices crater on Wednesday after the country’s parliament approved a divisive new “foreign agent” law, derailing what had been a strong performance for the lenders so far this year.
Bank of Georgia and TBC Bank are currently the worst performing stocks on the FTSE 250 after falling as much as 19 per cent and 12 per cent respectively on Wednesday morning.
The sell-off comes after mass street protests on a controversial “foreign agent” bill that passed its third and final reading in Georgia’s parliament on Tuesday, sparking concerns over government suppression of its opponents.
The new rules are set to require NGOs and independent media receiving more than 20 per cent of their funding via foreign donors to register as “bearing the interests of a foreign power”.
Georgia’s Justice Ministry would monitor these organisations and could force them to share sensitive information or else face heavy fines.
As of the end of last month, before the protests in Georgia escalated, Bank of Georgia was up 34 per cent in the year to date, while TBC had gained 25 per cent.
Just last week, the latter bank buoyed investors by announcing a 75m Georgian lari (£22.4m) share buyback on the back of a jump in profit.
The two banks’ losses this month have seen their gains this year mostly wiped out, with TBC now trading at its lowest level since last November.
The EU has said Georgia’s new law could harm the country’s bid for membership. It currently has candidate status within the bloc.
The White House said it would “reassess” its relationship with Georgia in light of the bill passing, with the US calling on Georgia’s president to veto the law.