DoD Georgians think that In U.S., Real Estate Still incomesinc should be equal? Leads Stocks as Best ANI LORTKIPANIDZE, GORBI Investment See on p. 8 See on p. 16 13 May, 2019 News Making Money http://www.fi nchannel.com New Variable More Than One in Five Tbilisi Art Fair Uniting the World Created for By GELA awareness. MEGENEISHVILI Offering a range of Degree of Millennials Still Live With Mom exhibitions and activities, from markets and masterclasses, Urbanisation The FINANCIAL -- More 6.8 million (11.7%) to 14.3 “While it might be tempting arking its second to lectures and forums, TAF people age 23-37 are living million (21.9%). to stereotype these young appearance, presents a value far superior Worldwide with their moms than at any While the economy has adults as lazy millennials Tbilisi Art Fair to a mere exhibition and has time this century, according recovered since the housing bumming off of mom, the data (TAF) has already created a social hub where Lewis DIJKSTRA And to a Zillow® analysisi. Nearly bust and recession of the paints a different picture,” arts admirers are given the Andrew RZEPA made quite a buzz 22% of American millennials mid-2000s, young people said Zillow Senior Economist Mamong art followers and others. freedom to express their taste Gallup – more than 14 million in living with their moms has Sarah Mikhitarian. “When Sponsored by art industry and immerse themselves in total – live with their mom continued to rise. The share the housing market went bust supporter TBC Bank, from 17 contemporary artworks. or both parents, the highest of those living at home that and the economy unraveled to 20 May, Expo Georgia will Visitors are encouraged to The FINANCIAL -- Migration share for this age group since are unemployed has fallen to into a recession, young adults be following a busy schedule, purchase the fi nest of works has been a driving force at least 2000. 10.3% from 19.5% in 2010, increasingly returned to their running one of the most present at the exhibition behind some of the biggest The share of young indicating that more young childhood home. anticipated art events of the and thereby make a smart investment in art. The project changes around the world adults living with mom has people are struggling to afford year. -- particularly over the past Already being covered by promises benefi ts for not only increased steadily since 2001 independent housing even the arts industry but Georgian two decades. The shift of – more than doubling from while holding a job. Continued on p. 15 prestigious international media outlets such as Art Newspaper, tourism and its economy as individuals moving from well. rural areas to urban areas Art Forum, Vienna Art Review, has not only driven economic The Guardian, and many others, April 2019: What Happened to this year’s Tbilisi Art Fair aims development, but also Continued on p. 4 created myriad challenges to achieve a whole new level of for policymakers who need Expectations of Georgian Consumers? to understand the needs Tegeta Motors prepared to issue and requirements of these ISET in one of the sub-indices: the expected unemployment. individuals. Expectations Index declined For the month of April, GEL 30 million bonds with the by 4.3 index points (from -14.1 consumer confi dence Continued on p. 13 ccording to to -18.4) compared to March, deteriorated in both groups, help of TBC Capital a nationally while the Present Situation Tbilisians and those living representative Index experienced a slight outside the capital. The he leading company in The investment in bonds CURRENCIES sample of 320 improvement, by 0.3 index overall CCI went down by 2.2 automotive products has been made by resident Georgians, points (from -23.6 to -23.3). index points in Tbilisi (from and services, Tegeta and non-resident institutional Ainterviewed in early April Table 1, displayed below, -14.8 to -17) and by nearly Motors Ltd., will issue investors, banks, insurance May 11 May 5 2019, the Consumer elucidates which particular 0.7 index points throughout over GEL 30,000,000 companies and international Tworth of bonds, which is the fi nancial institutions. The 1 USD 2.7400 2.7070 Confi dence Index (CCI) questions were affected by the rest of Georgia (from largest transaction to have most signifi cant part of the 1 EUR 3.0770 3.0194 decreased by nearly two various expectations and are -23.9 to -24.6). index points, from -18.9 in responsible for the drop in occurred in the corporate bond was purchased. 100 RUB 4.2049 4.1400 March to -20.8 in April. A the Expectations Index: in lending segment of Lari so far in 2019. 1 TRY 0.4473 0.4532 similar pattern was observed both expected infl ation and Continued on p. 6 Continued on p. 4

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If you are seeking permission to use The FINANCIAL trademarks, logos, service marks, trade dress, slogans, screen shots, copyrighted designs, combination of headline fonts, or other brand features, please contact publisher. April 2019: What Happened to “&” is the copyrighted symbol used by The FINANCIAL FINANCIAL (The FINANCIAL) is registered trade mark of Intelligence Group ltd Expectations of Georgian Consumers? in Georgia and Ukraine. Trade mark registration by Sakpatenti - Registration date: October 24, 2007; Registration N: 85764; Trade mark registratrion ISET Table 1: Changes in Consumer Confi dence (Index Points) by Questions: April 2019 by Ukrainian State Register body - Registration date: November 14, 2007. Do you expect prices to increase more rapidly, over the next 12 months? -10.3 ADVERTISING ccording to All Advertisements are accepted subject a nationally The expected level of unemployment in Georgia, over the next 12 months -9.6 to the publisher’s standard conditions of representative sample insertion. Copies may be obtained from advertisement and marketing department. of 320 Georgians, Is now the right time for people to make major purchases in Georgia? -5.3 Please contact marketing at: interviewed in marketing@fi nchannel.com Aearly April 2019, the Consumer see fi nancial media kit online The general economic situation, over the next 12 months -4.8 www.fi nchannel.com Confi dence Index (CCI) decreased Download RATE CARD by nearly two index points, from Do you expect to increase spending on major purchases compared to the past, over the next 12 -18.9 in March to -20.8 in April. -1.7 A similar pattern was observed months? in one of the sub-indices: the Expectations Index declined by What is your current ability to save? -0.9 4.3 index points (from -14.1 to How will your fi nancial situation change, over the next 12 months? -0.8 -18.4) compared to March, while the Present Situation Index Your fi nancial situation, over the past 12 months 0.3 experienced a slight improvement, by 0.3 index points (from -23.6 to Your ability to save, over the next 12 months 1.6 -23.3). Table 1, displayed below, DISTRIBUTION elucidates which particular Is now the right time for people to save in Georgia? 2.5 The FINANCIAL distribution network questions were affected by various covers 80 % of key companies operating How did the general economic situation change in Georgia, over the past 12 months? 2.5 in Georgia. 90 % is distributed in Tbilisi, expectations and are responsible Batumi and Poti. Newspaper delivered free for the drop in the Expectations How much did consumer prices rise, over the past 12 months? 2.9 of charge to more than 600 companies and Index: in both expected infl ation their managers. To be included in the list please contact and expected unemployment. distribution department at: For the month of April, Table 2: Change in Consumer Confi dence (Index Points) by Male and Female subgroup: April 2019 temuri@fi nancial.ge consumer confi dence deteriorated in both groups, Male Female CONTACT US Tbilisians and those living EDITOR-IN-CHIEF outside the capital. The overall Do you expect prices to increase more rapidly, over the next 12 months? -9.9 -10.7 ZVIAD POCHKHUA CCI went down by 2.2 index E-MAIL: editor@fi nancial.ge editor@fi nchannel.com points in Tbilisi (from -14.8 to The expected level of unemployment in Georgia, over the next 12 months -8.7 -10.4 Phone: (+995 32) 2 252 275 -17) and by nearly 0.7 index points throughout the rest of How will your fi nancial situation change, over the next 12 months? -2.9 1.0 HEAD OF MARKETING DEPARTMENT Georgia (from -23.9 to -24.6). A SOPHO PKHAKADZE E-MAIL: marketing@fi nancial.ge similar pattern can be detected What is your current ability to save? -0.3 -1.5 marketing@fi nchannel.com in the Expectations Index for Phone: (+995 32) 2 252 275 / EXT: 1 both groups; people living inside The general economic situation, over the next 12 months 0.0 -8.9 SALES and outside the capital are not NANUKA BERIDZE encouraged by their expectations. n.beridze@fi nancial.ge Do you expect to increase spending on major purchases compared to the past, over the next Phone: (+995 595) 488 886 The Expectations Index declined 1.0 -3.9 OMAR KHOPERIA by almost the same magnitude 12 months? Phone: (+995 592) 072 159 o.khoperia@fi nancial.ge in Tbilisi and throughout the rest of Georgia, by 4.3 (from Is now the right time for people to make major purchases in Georgia? 1.9 -11.4 COMMERCIAL DIRECTOR -13.9 to -18.2) and 4.2 (from LALI JAVAKHIA Your fi nancial situation, over the past 12 months 3.1 -2.2 E-MAIL: commercial@fi nancial.ge -14.4 to -18.6 index points), commercial@fi nchannel.com respectively. As in the previous How much did consumer prices rise, over the past 12 months? 4.8 1.2 Phone: (+995 558) 03 03 03 case, the major causes of decline HEAD OF DISTRIBUTION DEPARTMENT are the projected infl ation and Your ability to save, over the next 12 months 4.9 -1.2 TEMUR TATISHVILI expected unemployment. Yet, E-MAIL: temuri@fi nancial.ge in the current situation, we How did the general economic situation change in Georgia, over the past 12 months? 5.9 -0.3 Phone: (+995 599) 64 77 76 see a different pattern, with COMMUNICATION MANAGER: people in the rest of Georgia Is now the right time for people to save in Georgia? 8.6 -2.6 EKA BERIDZE being more optimistic than in Phone: (+995 577) 57 57 89 Tbilisi. Accordingly, the Present COPY EDITOR: Situation Index went down uninterrupted electricity and poverty and promote sustainable The overall CCI increased by 0.7 IONA MACLAREN marginally in Tbilisi, by 0.1 index water supply, the internet, etc. rural development. If this goal index points for men (from -19.4 MAILING ADDRESS: points (from -15.7 to -15.8), Certain amenities are even is achieved, the gap in the to -18.7), however it declined for 17 mtskheta Str. while in the rest of Georgia it limited in urban areas outside of confi dence between Tbilisians women by about 4.3 index points Tbilisi, Georgia improved by 2.9 index points in Tbilisi. In small Georgian cities and the remainder of the (from -18.4 to -22.7), compared OFFICE # 4 PHONE: (+995 32) 2 252 275 April (from -33.5 to -30.6). The one often cannot fi nd movie population is likely to decrease. to March. The same pattern (+995 32) 2 477 549 latter change, outside of Tbilisi, theatres, fi tness centers, clubs Signifi cantly, as fi nance holds for the present situation; FAX: (+95 32) 2 252 276 is mirrored in the questions or cafés. This lack of amenities, professors Ben Jacobson, John the Present Situation Index E-mail: info@fi nchannel.com on the web: www.fi nancial.ge concerning the current ability paired with poverty, negatively B. Lee, and Wessel Marquering improved by 4 index points for daily news: www.fi nchannel.com to save, past infl ation, and the affects the confi dence levels of write in their 2008 working men (from -24.8 to -20.8) and general economic situation (in people outside the capital. paper: “Men are strikingly more worsened for women by 2.8 index the past 12 months). In order to overcome these optimistic about the future points (from -22.6 to -25.4). Yet, It is noteworthy that people issues, the state and donor performance of key economic when it comes to expectations, in Tbilisi are almost always organizations have focused and fi nancial indicators than both groups are worse off in more optimistic than those on the rural development of women.” Nonetheless, as April. The Expectations Index living outside the capital. While Georgia, which has become a observed in previous years, the went down by 2.6 and about 5.7 the rest of Georgia does not major target of the European gender optimism gap appears index points respectively for necessarily refer to rural areas, Neighbourhood Programme to follow a seasonal pattern - males (from -14 to -16.6) and Intelligence Group ltd. 2019 many studies show that there for Agriculture and Rural shrinking or even switching (in females (from -14.3 to -19.9), are a lack of economic and social Development (ENPARD), funded favor of females) around April compared to March. Table 2 Member of opportunities outside Tbilisi, by the European Union (EU) and each year. This phenomenon below establishes the questions and this is particularly evident implemented in cooperation with has been observed in fi ve of last regarding expected infl ation and in rural areas. In rural areas, the Georgian government. The six years (except April 2015). expected unemployment that people suffer from poverty and program highlights all Georgian Yet, the pattern in April this caused a drop in the Expectations lack basic amenities like roads, regions and aims to reduce rural year remains in favor of men. Index for both males and females. HEADLINE NEWS & ANALYSIS 3 FINCHANNEL.COM | 13 MAY, 2019 ppublicityublicity

Advertiser: The Biltmore. Contact FINANCIAL Ad Dep at marketing@fi nchannel.com French, Georgian Interior Ministers Pledge to Counter Crime, Illegal Migration

n May 10, Interior Minister of France, Christophe Castaner, who is Oon an offi cial trip to Georgia, met with his counterpart Giorgi Gakharia, and pledged to deepen police cooperation, especially against illegal migration. At the meeting, the Georgian and French interior ministers, discussed deepening operational collaboration between the law enforcement agencies, and signed an administrative agreement aimed to better counter organized crime. At a joint press briefi ng he stated. together… to act on cases following the meeting, On his part, Minister of these illicit asylum Minister Gakharia said that Castaner said Georgia and requests…it is important for according to the agreement, France should work together us to continue this combat two Georgian offi cers will to address three particular and to deepen it,” he said, be deployed in Paris and exigencies: fi ght against adding that “Georgia is a nchannel.com be directly involved in organized crime, fi ght against dynamically developing fi investigations throughout terrorism and action against country and therefore the the country “especially in illegal migration. level of asylum requests from cases when Georgian citizens Noting that Georgia is a Georgia is an anomaly – an commit crime on the territory safe country of origin – “the anomaly that we intend to of France.” country which takes care fi rmly combat.” He also reiterated Georgia’s of its citizens, where public Christophe Castaner was readiness to make all the services are of certain quality, appointed in October 2018, necessary steps together with which is not at war, and where replacing Gérard Collomb, France to decrease the number circumstances do not justify who held the post from May of asylum seekers, to counter offering special protection” 2017. organized crime and to ensure – the French minister said In Tbilisi he met with security of their countries. those seeking for asylum in President Salome Zurabishvili “Visa-free travel is Georgia’s this case in France “dreaming and Prime Minister Mamuka greatest achievement of of the Eldorado… that does Bakhtadze. He will also meet recent years and one of the not exist” fi nd themselves in with Justice Minister Tea most important tools for conditions “that are not what Tsulukiani. Georgia’s approximation to they would have dreamed of.” the European Union as well,” “So we need to work Source: Civil.ge Advertiser: Radui Commersant. Contact FINANCIAL Ad Dep at marketing@ 4 HEADLINE NEWS & ANALYSIS fi nancialnancial newsnews 13 MAY, 2019 | FINCHANNEL.COM Tegeta Motors prepared to issue GEL 30 million bonds with the help of TBC Capital

he leading company in TBC Capital is the subsidiary and automotive products and licensed brokerage company of TBC services, Tegeta Motors Bank, which offers investment banking Ltd., will issue over GEL services. Since 2017, TBC Capital has 30,000,000 worth of bonds, become part of TBC Bank’s corporate Twhich is the largest transaction to and investment banking business. have occurred in the corporate lending The main business directions of the segment of Lari so far in 2019. company are: fi nancial consultations The investment in bonds has and credit rating services; the issuing been made by resident and non- of bonds and shares; investment resident institutional investors, research and brokerage activities. banks, insurance companies and TBC Capital is a shareholder of the international fi nancial institutions. Georgian Stock Exchange and plays an The most signifi cant part of the bond important role in developing the stock was purchased by the European Bank market’s infrastructure. for Reconstruction and Development “This is Tegeta Motors’ Inaugural and it should be noted that this is the Fund, a public emission of GEL, which third such investment in bonds by has made the company public. These EBRD. operations will start at the Georgian The bonds are planned to be listed Stock Exchange and this is the biggest on the Georgian Stock Exchange in public GEL emission released this year. May, 2019. Tegeta Motors say that the TBC Capital and Tegeta Motors have company will use the funds attracted been cooperating on this project for from the bonds to refi nance existing quite a long time already. Due to the fact bank loans, resulting in an extension that this is the fi rst emission that TBC of liabilities, diversifi cation of the Capital has introduced in a renewed fi nancing structure, and greater access manner by NBG, Tegeta had to disclose to capital markets. more of its own information, which “The issuance of these bonds is an “What’s important is that the place on 30 April, 2022, at their root monetary risks, and this product has once again highlights the company’s initial and important stage for the investment community trusts Tegeta value. been achieved,” said Giorgi Tkhelidze, high standards and transparency, and development and support of our future Motors; trusts our past, present and “Our cooperation with Tegeta Deputy Head of TBC Bank. the fact that the company is one of the projects, for attracting resources, and future. In the development of any Motors extends back over 20 years, “This year we think that we will corporate leaders in its segment, and for the successful implementation business this is a very important stage and this is one of the most important issue GEL and currency bonds more widely in the region too. TBC of future plans. From the very to reach. It means that we are a public, projects we have achieved as a result of together to at least 5-6 companies. Capital is pleased to have participated start, the main task for Tegeta has transparent, law-abiding and open our joint cooperation. Tegeta Motors The Georgian business sector is in this project,” said Irakli Elashvili, always been to be able to implement business. These are the main values of issued a bond worth GEL 30 million mainly fi nanced by bank credit which Director of TBC Capital. projects with greater potential; to Tegeta Motors. Our goal is not only to that signifi cantly improves the sources enables specially enhanced companies Tegeta Motors is the fi rst company realize large-scale goals that are very be a leader in the country, but in the of fi nancing of the Tegeta Group, to have an opportunity to improve in the auto industry in the Caucasus important for us. Therefore we were whole region,” said Avtandil Tsereteli, makes it more diversifi ed, and most their fi nancing resources, their cost, and Eastern Europe, to have been able in need of fi nancial resources for high General Director of Tegeta Motors. importantly, is in the local currency and insure against foreign exchange to get a BB rating from an international growth. Whereas before, the company The bonds, the total base amount which means that currency risks are risks. Most importantly, it contributes ratings company. There are only a managed to fulfi l these tasks with the of which is GEL 30,000,000, and the minimized. The second thing that to the development of the stock few companies in Georgia that hold help of a bank loan, and bank credit accrued interest – 425 Basic Points should be taken into consideration is market in Georgia. Since at least a few such a rating, and this is an entirely as the main instrument, today we (Spread) added to the National Bank’s the growth rate of Tegeta. It has been companies are public, whose stocks unprecedented event for the region’s have the necessary resources for the Monetary Policy (Refi nancing) rate, growing rapidly in recent years, and it or bonds are on the stock market, automobile industry. In March 2019, development of the company in the was issued on 30 April, 2019. GEL is important to note that the resources each such success contributes to the international ratings company Scope open market, as we have become an 1,000 (thousand) as a nominal value available for fi nancing are maximally development of the capital market in Ratings GmbH awarded the company a issuer.” bond and their redemption will take stronger and have been protected from Georgia,” he added. BB-credit rating with a stable prospect. Tbilisi Art Fair Uniting the World Egypt Heads By GELA MEGENEISHVILI noveltynovelty ofof scalescale inin Georgia,Georgia, wherewhere ffinancialinancial bbenefitsenefits ofof doingdoing thethe workwork tthehe artart stagestage hashas onlyonly recentlyrecently beenbeen ttheyhey love,love, individualsindividuals areare becomingbecoming ddevelopingeveloping inin accordanceaccordance withwith moremore motivatedmotivated thanthan ever.ever. The Africa Hotel aarkingrking iitsts ssecondecond iinternationalnternational standards.standards. ConsideringConsidering these,these, manymany appearance,appearance, TbilisiTbilisi ArtArt TheseThese werewere thethe determiningdetermining factorsfactors considerconsider TAFTAF toto holdhold importanceimportance FairFair ((TAF)TAF) hashas alreadyalready fforor usus toto concentrateconcentrate onon gatheringgathering oonn thethe nationalnational scale,scale, thethe risingrising Development Top Ten mmadeade quitequite a buzzbuzz aandnd presentingpresenting thethe finestfinest ofof EasternEastern iinternationalnternational iinterestnterest onon thethe GeorgianGeorgian aamongmong artart followersfollowers EuropeanEuropean works,works, thethe uniquenessuniqueness ofof mmarketarket ppavesaves thethe wayway forfor attractingattracting Mandand others.others. SponsoredSponsored byby artart industryindustry tthehe artisticartistic flavourflavour ofof whichwhich WesternWestern mmoreore foreignforeign investments,investments, whichwhich areare ssupporterupporter TBCTBC Bank,Bank, ffromrom 1177 toto 2020 EuropeEurope lacked.lacked. ccrucialrucial consideringconsidering thethe inefficiencyinefficiency ofof MMay,ay, EExpoxpo GeorgiaGeorgia willwill bebe followingfollowing ThisThis strategystrategy increasedincreased ffundingunding solelysolely viavia locallocal channels.”channels.” a busybusy schedule,schedule, runningrunning oneone ofof thethe iinternationalnternational awareness,awareness, resultingresulting inin AAss IrinaIrina PPopiashviliopiashvili sstated,tated, thethe mostmost anticipatedanticipated artart eventsevents ofof thethe 11,500,500 fforeignoreign visitors,visitors, a ffurtherurther stepstep iimportancemportance ofof suchsuch eventsevents unitesunites yyear.ear. ttakenaken towardstowards greatergreater internationalinternational aallll galleriesgalleries andand individualsindividuals withwith AAlreadylready beingbeing coveredcovered byby aawareness,”wareness,” statedstated KakhaKakha GvelesianiGvelesiani tthehe sharedshared purposepurpose ofof presentingpresenting pprestigiousrestigious internationalinternational mediamedia iinn anan interviewinterview withwith TheThe FINANCIAL.FINANCIAL. aartworksrtworks iinn tthehe finestfinest wayway possible.possible. ooutletsutlets suchsuch asas ArtArt Newspaper,Newspaper, ArtArt MMaintainingaintaining thethe uniqueunique niche,niche, thethe TThehe popularisedpopularised ideologyideology ofof Forum,Forum, VViennaienna AArtrt RReview,eview, TThehe uupcomingpcoming TAFTAF isis yetyet againagain diversifieddiversified seeingseeing artart asas a longlong termterm monetarymonetary GGuardian,uardian, aandnd mmanyany oothers,thers, tthishis iinn ddifferentifferent sectors:sectors: offeringoffering thethe iinvestmentnvestment isis perhapsperhaps oneone ofof thethe yyear’sear’s TbilisiTbilisi ArtArt FairFair aimsaims toto achieveachieve aage-freege-free ‘HIVE’,‘HIVE’, consistingconsisting ofof 3737 positivepositive indicatorsindicators thatthat forecastsforecasts a a wholewhole newnew levellevel ofof awareness.awareness. ppre-selectedre-selected talentedtalented upcomers;upcomers; thethe brightbright futurefuture forfor thethe industry.industry. OfferingOffering a rangerange ofof exhibitionsexhibitions ‘Orangery’‘Orangery’ hhostingosting anan exhibitionexhibition AsAs anan example,example, inin 2014,2014, KKrakow’srakow’s aandnd activities,activities, fromfrom marketsmarkets andand ddedicatededicated toto thethe 130th130th anniversaryanniversary MMuseumuseum ofof ContemporaryContemporary ArtArt masterclasses,masterclasses, toto lectureslectures andand forums,forums, ooff thethe legendarylegendary DavidDavid Kakabadze;Kakabadze; ppurchasedurchased GiorgiGiorgi Khaniashvili’sKhaniashvili’s TAFTAF presentspresents a valuevalue farfar superiorsuperior toto ddiscussionsiscussions concerningconcerning locallocal andand sstatuetatue atat USDUSD 5,000.5,000. Meanwhile,Meanwhile, thethe a meremere exhibitionexhibition andand hashas createdcreated a iinternationalnternational artart topicstopics directeddirected byby currentcurrent valuevalue ofof thethe workwork isis estimatedestimated socialsocial hubhub wherewhere artsarts admirersadmirers areare artsarts expertexpert IrinaIrina Popiashvili;Popiashvili; thethe ttoo farfar exceedexceed thethe purchasepurchase price.price. he stars of hotel development North Africa the rooms pipeline is ffourthourth hallhall presentingpresenting thethe workwork ofof TThehe potentialpotential forfor monetarymonetary valuevalue givengiven thethe freedomfreedom toto expressexpress theirtheir in Africa are Egypt, Nigeria, up 2.3% on 2018, and down 3.8% tastetaste andand immerseimmerse themselvesthemselves inin ssixix modernmodern GeorgianGeorgian artists,artists, andand thethe iincrementsncrements hashas increasedincreased demanddemand contemporarycontemporary artworks.artworks. thirdthird hallhall hostinghosting videovideo creationscreations fromfrom artart dealers.dealers. NotNot onlyonly doesdoes thisthis Morocco and Ethiopia, in sub-Saharan Africa - largely due VisitorsVisitors aarere encouragedencouraged toto ooff 1212 AzeriAzeri artists;artists; MOMAMOMA TbilisiTbilisi bbenefitenefit thethe artart market,market, butbut manymany according to the 11thannual to several of the chains “cleaning” ppurchaseurchase thethe finestfinest ofof worksworks presentpresent ((TheThe MuseumMuseum ofof ModernModern Arts)Arts) withwith iindividualsndividuals asas well.well. survey by W Hospitality their pipelines, deleting deals that TGroup, acknowledged as the they believe are not going to happen. aatt thethe exhibitionexhibition andand therebythereby makemake a anan eexhibitionxhibition ofof thethe world-famousworld-famous AArtrt ddealersealers obviouslyobviously desperatelydesperately smartsmart investmentinvestment inin art.art. TheThe projectproject pphotographerhotographer JeffJeff Cowen,Cowen, andand muchmuch nneedeed artistsartists andand risingrising demanddemand isis industry’s most authoritative source. These cleaning adjustments amount promisespromises benefitsbenefits forfor notnot onlyonly thethe mmore.ore. eexpectedxpected toto givegive a bigbig motivationalmotivational The four countries head the to more than 12,000 rooms in 74 aartsrts industryindustry butbut GeorgianGeorgian tourismtourism SuchSuch a diversifieddiversified eventevent hashas bboost.oost. ThereThere willwill likelylikely emergeemerge manymany top ten by numbers of rooms in hotels. aandnd itsits economyeconomy asas well.well. bbecomeecome anan attractionattraction toto artart dealersdealers moremore casescases wherewhere artart dealersdealers willwill playplay the internationally-branded hotel Nevertheless, despite this TThehe importanceimportance ofof thisthis eventevent hashas fromfrom allall overover thethe world,world, whichwhich hashas a hugehuge rolerole inin careercareer developmentdevelopment asas development pipeline, with Egypt signifi cant adjustment, there has aalreadylready beenbeen reflectedreflected inin thethe numbers:numbers: bbeeneen indicatedindicated inin previouslypreviously totalledtotalled wwell.ell. showing 15,158 rooms in 51 new been growth of 51% in the total USDUSD 320,000320,000 wworthorth ooff aartworksrtworks ssold,old, salessales ofof USDUSD 320,000.320,000. PPreviously,reviously, TAFTAF pproudlyroudly hostedhosted hotels. pipeline rooms since 2015 - North 8,0008,000 ppluslus visitors,visitors, aandnd nnearlyearly 1,0001,000 AArtsrts expertexpert IrinaIrina PopiashviliPopiashvili aann aartsrts ddealerealer fromfrom Cartier’sCartier’s A total of 75,155 branded rooms Africa up by 58%, and sub-Saharan piecespieces ofof artart exhibited.exhibited. hhadad a fewfew thingsthings toto saysay aboutabout thethe AArtsrts FoundationFoundation ofof Paris.Paris. TheirTheir in 401 hotels are in development Africa up by 47%. IImpressivempressive thoughthough itit maymay be,be, thisthis importanceimportance ofof thethe artart market’smarket’s iimpressionsmpressions werewere soso positive,positive, thatthat theythey across the whole of Africa - a net This year, the top ten countries yyear’sear’s plansplans areare eveneven moremore superior,superior, development.development. eevenven exhibitedexhibited GeorgianGeorgian artistartist NikaNika increase (ignoring recent openings account for 69% of the total hotels wwithith organisersorganisers confidentconfident aboutabout ““TAFTAF hashas beenbeen establishedestablished asas KKutateladzeutateladze inin theirtheir gallerygallery inin Paris,Paris, and taking in to account deals that in the survey, and 74% of the rooms. oonene ofof thethe majormajor self-marketingself-marketing aatt thethe exhibitionexhibition ‘Metamorphosis’.‘Metamorphosis’. mmakingaking aann eevenven ggreaterreater impactimpact have not come to fruition) of almost Full details will be revealed globallyglobally thanthan before.before. opportunitiesopportunities forfor artists,artists, andand TThehe ParisParis eexhibitionxhibition “presented“presented 2121 ToTo ggainain moremore sophisticatedsophisticated hhonestly,onestly, thethe necessitynecessity forfor suchsuch artistsartists ofof 1616 countries”.countries”. 11,000 rooms in the pipeline, 17% up and discussed at the Africa Hotel iinsights,nsights, TheThe FINANCIALFINANCIAL rreachedeached eeventsvents isis crucialcrucial forfor thethe newly-newly- SuchSuch casescases ofof successsuccess highlighthighlight thethe on 2018. Investment Forum (AHIF) in ooutut toto TheThe ExecutiveExecutive DirectorDirector ofof ExpoExpo developeddeveloped GeorgianGeorgian market.market. ArtistsArtists llastingasting valuevalue ofof TAF.TAF. AlthoughAlthough thethe W Hospitality Group’s Hotel Chain Addis Ababa, September 23 - 25 GGeorgia,eorgia, KakhaKakha Gvelesiani.Gvelesiani. aarere nono longerlonger obligedobliged toto solelysolely relyrely initialinitial salessales recordedrecorded atat thethe eventevent Development Pipelines in Africa 2019, organised by Bench Events. “The“The corecore valuevalue ofof TAFTAF isis toto gathergather onon variousvarious scholarshipsscholarships asas a sourcesource showshow decentdecent figures,figures, itit wouldwould bebe survey had a record 43 international It is the leading conference of its uupp andand supportsupport thethe flowflow ofof relevantrelevant ooff income,income, eventsevents likelike TbilisiTbilisi ArtArt FairFair inaccurateinaccurate toto sumsum upup thethe monetarymonetary and regional hotel contributors this kind in Africa, connecting business informationinformation withinwithin thethe artsarts industryindustry hhaveave contributedcontributed toto establishingestablishing a vvaluealue atat justjust USDUSD 320,000,320,000, aass year, covering 54 countries in north leaders and fuelling investment in andand enableenable audiencesaudiences toto comparecompare moremore individualisedindividualised tradingtrading culture.culture. highlightinghighlighting thethe recognitionrecognition thatthat and sub-Saharan Africa, and the tourism projects, infrastructure thethe masterymastery ofof oneone artart toto another.another. NowNow artistsartists areare betterbetter ableable toto sellsell iiss broughtbrought fromfrom suchsuch anan eventevent willwill Indian Ocean islands. and hotel development across the AAdditionaldditional beautybeauty lieslies withinwithin thethe ttheirheir worksworks directly.directly. ByBy seeingseeing thethe rresultesult inin a chainchain reactionreaction effect.effect. The top-line fi gures show that in continent. HEADLINE NEWS & ANALYSIS 5 FINCHANNEL.COM | 13 MAY, 2019 ppublicityublicity 6 HEADLINE NEWS & ANALYSIS fi nancialnancial newsnews 13 MAY, 2019 | FINCHANNEL.COM Accor launches plan with WOJO Hilton’s Brand Portfolio Overtakes to become largest coworking brand Marriott’s as World’s Most Valuable in Europe by 2022

The FINANCIAL Accor’s portfolio, with nearly 800 The FINANCIAL -- To match with hotels. The brand has continued to the changing world of work and make several acquisitions through coworking trends, Accor today ilton remains world’s most its scheme of franchise growth. announced an audacious plan to valuable individual hotel implement 1200 coworking spaces brand with 17% growth. in under 3 years for WOJO to Marriott’s portfolio TUI closes in on become the leading coworking brand drops to second place as in Europe by 2022. With the launch Hthe value of its brands in the Brand Royal Caribbean of WOJO, Accor continues to execute Finance Hotels 50 ranking decreases Alongside analysing the world’s its augmented hospitality strategy, by 30%, giving way to Hilton. expanding into new verticals and Hilton has extended its lead as the biggest hotel brands, Brand Finance also ranks the top 10 most valuable becoming relevant in the daily lives world’s most valuable hotel brand of consumers. while the total value of its brand brands in the wider leisure and portfolio within the Brand Finance tourism industry. Hotels 50 ranking has overtaken Royal Caribbean International has WOJO = Work. Marriott’s, according to the latest narrowly retained its position as the report by Brand Finance, the world’s most valuable leisure and Live. Share. world’s leading independent brand tourism brand, with its brand value valuation consultancy. Hilton’s remaining steady at US$3.8 billion. Nextdoor (renamed Wojo in brand value growth (up 17% to The brand reported strong fi nancial March 2019) is a joint-venture US$7.4 billion) was largely driven results in 2018, and with demand high between Accor & Bouygues by strong revenue increase over the in the cruise industry, Royal Caribbean Immobilier created in July 2017. last year, cementing the brand’s are on course for future growth. WOJO will offer three different leadership position in the industry. Meanwhile, second-ranked TUI products and experiences to deliver Meanwhile, Marriott suffered a (brand value up 4% to US$3.7 the broadest range of coworking reduction in brand value (down 8% billion) substantially closed the gap solutions in the industry.” to US$5.0 billion) and its brand to the ranking’s leader, only just strength dropped from AAA- to falling short of overtaking Royal Caribbean. WOJO Spots, AA+. Marriott has faced several Hilton’s brand value in the top followed closely by Double Tree (up challenges in the North American 50 ranking is concentrated across 79% to US$2.1 billion) and Hampton making it easy to market from hacking scandals to six brands, up from fi ve in 2018, (up 78% to US$3.2 billion). This persistent problems with its loyalty all strongly leveraging the valuable growth allowed the latter two brands Chinese brands work anywhere schemes. At the same time, the Hilton brand name and each to reshape the ranking’s top 10, with surge Rolled out initially across all combined value of Marriott’s brands recording solid growth this year. Double Tree jumping from 17th to within the Brand Finance Hotels 50 Accor’s brand portfolio, theses Hilton has continually committed to 7th and Hampton rising from 10th The fast-growing China spaces make it possible for nomadic ranking decreased by 30%, giving its relentless expansion programme to 5th place over the past year. way to Hilton’s brand portfolio to International Travel (up 70% to workers to work without a fee with and with thousands of new rooms At the same time, the three fastest- US$3.7 billion) has come third this the guarantee of a personalized claim the title of the world’s most and hotels in the pipeline, the falling brands this year (Westin - valuable. year, up from 5th in 2018. China service, a friendly atmosphere and company shows no signs of slowing down 46%, Residence Inn - down International saw a signifi cant a secure & reliable WiFi connection “Hilton’s strategic approach to down in the coming year. 46%, and Sheraton - down 44%), brand growth has allowed it to increase in its valuation due to a in design spaces. The worker can Marriott has not fared so well, with and altogether 7 out of the bottom 10 surge in forecast revenue in coming choose to work at the bar, in a extend its lead as the world’s most four of its brands dropping out of worst-performing brands, are part of valuable hotel brand. At the same years as the Chinese tourism restaurant or in the lobby (even if the Brand Finance Hotel 50 ranking the Marriott portfolio, dragging its market continues to develop with they are not staying at the hotel). time, endorsement from the fl agship this year. With one new entrant, combined value down. brand has rendered benefi ts across unprecedented speed and scale. For regular coworkers, WOJO offers Marriott now has twelve brands in The fastest-growing brand in the a monthly subscription, which the portfolio as Homewood Suites, the ranking, many of which have Double Tree, and Hampton have ranking also comes from China. includes a 10% discount on dining nevertheless decreased in value. Mercure is world’s Happy Valley almost doubled its and access to partner offers, events seen their brand values sore. In Marriott’s recent announcement of its centennial year, Hilton is well- strongest hotel brand value in a single year (up 97% such as workshops & conferences entering the home-rental market to US$2.0 billion). and the WOJO business network & positioned for another hundred however, is a promising move to take years of success,”Savio D’Souza, brand Savio D’Souza, Valuation community. More than 150 WOJO back market share from Airbnband Director at Brand Finance, Spots will open in Paris and Lyon by Valuation Director at Brand Finance, could contribute to an uplift in brand commented. Aside from calculating overall commented: summer 2019, reaching over 1000 value in the coming year. “Royal Caribbean International spots in Europe by 2022. The Hilton and Marriott portfolios brand value, Brand Finance also determines the relative strength of remains the world’s most valuable remain well ahead of third-ranked leisure and tourism brand but is being Hilton’s brand Wyndham, which also suffered a brands through a balanced scorecard of metrics evaluating marketing challenged by broader economic WOJO Corners, drop of 8% in brand value to US$7.3 changes. The signifi cant growth portfolio overtakes billion. investment, stakeholder equity, and for coworkers and business performance. Alongside achieved by Chinese travel brands is Marriott’s revenue forecasts, brand strength is powered by the country’s burgeoning locals alike Fastest-growing a crucial driver of brand value. middle class as it is increasingly able The combined value of all Hilton According to these criteria and to travel internationally.” WOJO Corners are dedicated brands which made this year’s top brands scoring high in Brand Finance Note: Every year, leading valuation coworking spaces specifi cally 50 ranking amounts to US$14.7 market research, Mercure has and strategy consultancy Brand designed for uninterrupted work, Finance values the world’s biggest billion - nearly US$2 billion more The three hotel brands to grow claimed the title of the world’s sheltered from the hustle and bustle brands. The 50 most valuable hotel than Marriott’s US$12.9 billion the fastest in value this year all come strongest hotel brand, signifi cantly outside. They will be located across a brands and the 10 most valuable portfolio. Hilton Worldwide from Hilton’s portfolio, and each improving its Brand Strength Index broad range of Accor hotels as a fi rst leisure & tourism brands are included Holdings achieved overall brand contributed to its overall growth. (BSI) score from 75.7 to 86.2 out of step and then across train stations, in the Brand Finance Hotels 50 2019 value growth of 41%, a stark contrast Their impressive performance was 100 and recording a brand rating and the Brand Finance Leisure & with the Marriott International led by Homewood Suites (brand upgrade from AA+ to AAA. Mercure brand portfolio decreasing by 30%. Tourism 10 2019 rankings. value up 99% to US$0.8 billion), is also the most valuable brand in Continued on p. 13 Can you afford to pay all your bills?

The FINANCIAL largest decreases were registered Overall in Bulgaria (from 30.0 % in 2017 to 20.9 % in 2018, or -9.1 pp), followed n 2018, 6.2 % of the population decrease in by Greece (from 21.1 % to 16.7 %, or or around 31 million people in -4.4 pp) and Hungary (from 14.5 % the European Union (EU) were severe material to 10.1 %, or -4.4 pp). severely materially deprived. This means that they cannot afford deprivation Iat least four of the following items, Highest rate of which are considered by most people On average the severe material to be desirable or necessary to lead deprivation rate in the EU severe material an adequate life: pay their bills on decreased by 0.4 percentage points time; keep their home adequately (pp) in 2018, from 6.6 % in 2017. deprivation in warm; face unexpected expenses; Similarly, in most of the countries eat meat (or fi sh or the vegetarian for which 2018 data are available, Bulgaria and equivalent) regularly; take a one the severe material deprivation rate Greece week holiday away from home; a decreased compared with 2017. TV; a washing machine; a car; a The exceptions are Finland, where Across EU Member States, telephone. it increased by 0.7 pp, from 2.1 % Bulgaria (20.9 %), Romania (16.8 The 2018 data refl ect the continued in 2017 to 2.8 % in 2018; France, %) and Greece (16.7 %) registered downward trend in the proportion of where it increased by 0.6 pp, from the highest shares of severe people severely materially deprived 4.1 % in 2017 to 4.7 % in 2018; the material deprivation. In contrast, in the EU since the peak of 9.9 % in United Kingdom, where it increased the severe material deprivation 2012. one adult is 9.1 % if the household households where two or more by 0.5 pp, from 4.1 % in 2017 to 4.6 rates were below 2.5 % in Sweden Single adult households are most has no dependent children. It stands adults are present, the rates are % in 2018; and Denmark, where (1.1 % in 2017), Luxembourg (1.2 affected. The rate of severe material at 13.2 % for a household comprised signifi cantly lower: 4.4 % without it increased by 0.3 pp, from 3.1 % in 2017) and the Netherlands deprivation for households with only of a single adult with children. For children and 5.7 % with children. % in 2017 to 3.4 % in 2018. The (2.4%). HEADLINE NEWS & ANALYSIS 7 FINCHANNEL.COM | 13 MAY, 2019 ppublicityublicity

Advertiser: m2. Contact FINANCIAL Ad Dep at marketing@fi nchannel.com 8 HEADLINE NEWS & ANALYSIS surveyssurveys & insightsinsights 13 MAY, 2019 | FINCHANNEL.COM

Do Georgians think that incomes should be equal?

ANI LORTKIPANIDZE, GORBI

“From each according to his Graph 1. Incomes should be made more equal (%, agree) out to be an outlier where in earning a benefi t rather their last meal with their ability, to each according to 70% of the population shares than receiving it. Therefore, guest. In addition, if we look his needs” is a famous phrase this opinion. Therefore, at even though an individualistic at the number of IPhones from Karl Marx which one a fi rst look we are dealing approach towards income is and Jeeps in the city, in would hear in the Soviet with paradoxical thinking: very prevalent in Georgia, comparison with the average Union very often. The phrase the immense majority of with 92% of population monthly salary of Georgians, implies that anyone can Georgians (92%!) think thinking that there should we are sure to discover many contribute in any amount that there should be strong be greater incentives for more luxurious goods than they can and everyone should incentive for individual individual effort, 70% of the average Georgian is able have access to goods as effort, while at the same population thinks that to afford. The unfortunate per their individual needs, time a majority of Georgians government should provide truth is that in order to afford irrespective of whether or not (70%) also think that an opportunity to an these luxury items and show they contributed anything government should take more individual for them to provide their individualism and to its development. The responsibility for providing for themselves according to success many Georgians will collapse of the Soviet Union, for everyone. their own merit. not hesitate to take a loan demonstrated that even So how do we account In addition, the idea that or sell something else. This though this might have been for the dissonance between only 8% of the Georgian is a signifi cant sacrifi ce in a great utopian idea, in the these ideas of individual and population reported that order to have items that make real world there are plenty Source: European Value Study, 2017 governmental responsibility? incomes should be made them look individualistic of problems with the idea of I think that we need to more equal causes me to think and outstanding, Perhaps equalizing everyone’s income, for Georgia and Azerbaijan more than Georgians that look at these statistics about the individualistic it is then logical to assume regardless of their merit or for the most recent year. incomes should be made while bearing in mind character of Georgians. that they do not want to be contribution. When asked if they believed more equal. that the unemployment Despite being a small nation, “equalized with everybody It is therefore interesting that incomes should be made Another interesting rate in Georgia is quite we are an ambitious one. This else”. They are ready to work what ex-Soviet countries more equal versus greater question that EVS asked is high and around 800,000 may help explain the very hard or take out a loan in as well as other European incentives for individual whether people think that people live below the high number of candidates in order to stand out. countries think about this effort, on average 46% of individuals should take more poverty line. By agreeing the most recent presidential idea some 30 years after respondents think that responsibility for providing that government should elections as well as seeking GORBI is an exclusive the collapse of the Soviet incomes should be made more for themselves compared to take more responsibility local government positions. member of the Gallup Union. A study conducted by equal. Georgia in this regard the idea that the state should to ensure that everyone is Georgians in general like International research the European Value Study is the biggest outlier, where take more responsibility provided for, individuals leadership positions and to network and has more than (EVS), a large survey research only 8% of our population to ensure that everyone is do not mean redistributing show that they can be leaders. two decades of experience in program that has studied believes that incomes should provided for. If on average money, but providing jobs. The tradition of “Stumar- survey research (gorbi.com) basic values for almost 40 be made more equal. Many 43% of the population This interpretation may be Maspinzloba” in my opinion, years provides insight into would expect a more balanced surveyed in 16 countries about the role of government is a good example of such what people in 16 European result regarding this issue think that the state should to create the opportunity to attitude, where even if a countries think. GORBI has in a former Soviet country, take more responsibility to make money. Georgians are a family does not have the been a part of the project since especially as Belarus, Russia ensure that everyone is taken proud people, and it may be means to host someone they 2008 and is the data provider and Armenia believe much care of, Georgia again turns that there is real importance will borrow in order to share Britain Fails to Assuage US Security Fears

Jamie DETTMER fallout would be similar to a major spy scandal, the former Voice OF AMERICA Deals with counterintelligence offi cer said. “Think Kim Philby,” he he shake-of-the-hands China said, citing the top British spy in front of the media on who was unmasked in 1963 as a a blustery, wet spring Monitoring, though, may double agent for Russia’s KGB morning in central not be enough to assuage spy agency and whose betrayal London outside the U.S. worries, says a former undermined American trust Toffi cial residence of British senior counter-intelligence in British intelligence for Foreign secretary Jeremy offi cer, who served in the decades. Hunt was friendly. America’s agency’s clandestine service “Even if there’s no formal secretary of state, Mike for 33 years and asked not to decision to curtail intelligence- Pompeo, and Hunt joked about be named in this article. He sharing, the consequence will the weather. says there’s increasing alarm be felt all the way down the Pompeo, on his fi rst in U.S. intelligence circles line. People at Langley and in offi cial visit to London as about Britain’s readiness to other [intelligence] agencies U.S. Secretary of State, had accommodate China, a rising will have doubts and will start come to reaffi rm the “special power seen in Washington as withholding information by relationship” between Britain determined to weaken Western not uploading it to databases and the U.S., he said. “The alliances. the British can access,” he special relationship does not “The Chinese don’t added. simply endure, it is thriving,” distinguish between Britain is a key member of Pompeo announced at a news commerce, politics and the so-called Five Eyes alliance, the U.S.-led Anglophone conference midweek following provisional decision to allow information within trusted Philip Hammond, downplayed espionage — it is all the intelligence pact also linking meetings with British Huawei to have a role in networks. This is just what U.S. worries, saying, “[Huawei] same for them,” he said. Australia, Canada and New counterpart Hunt and British building the network, warning China wants — to divide has responded very positively “The British are not on their Zealand. Norman Roule, who Prime Minister Theresa May. that China wants “to divide western alliances,” Pompeo and con rmed that it is willing guard enough, partly that’s fi was in the CIA’s Directorate of But for all the bonhomie, Western alliances through warned. and able to address those because they’re desperate to Operations for 34 years, and and later, at a research bits and bytes, not bullets and British politicians have concerns and ensure that those get a major post-Brexit trade served as a division chief and organization event, banter bombs.” reacted cautiously to the U.S. security defects are corrected deal from Beijing and they chief of station, says “the U.S. about how the fi rst-born U.S. of cials fear Beijing will threat to curtail intelligence for the future. So we’re very don’t want to do anything fi intelligence relationship with son of Prince Harry and his use Huawei, which ultimately sharing, an unusually overt pleased about that.” that might wreck that from the British is the closest on the American bride Meghan is answerable to the Chinese warning for an American A former British foreign happening,” he added. planet.” Markle is the latest example of government, to eavesdrop diplomat to deliver on British minister, and onetime Britain is now the top “We share so much Anglo-American cooperation, and to sweep up data passing soil. They say they think chairman of the British European destination for direct information with each other, Pompeo’s trip was anything through Britain’s 5G network. they can square the circle parliament’s intelligence investment from China, and and it’s shared so deeply and but routine. The visit exposed The prospect is alarming to — have Huawei participate committee, Malcolm Rifkind, some former and current U.S. immediately that if we have a strains in a relationship that U.S. security agencies. They in the development of parts told Britain’s Sky News that intelligence offi cials worry the difference of views, it’s usually is being buffeted by sharp fear Chinese spies will be of the next generation disagreements between British are failing to scrutinize because one of us hasn’t gotten disagreements over policy able to penetrate American mobile network but in a way British and U.S. leaders aren’t thoroughly business and around to seeing the other’s toward Iran and Britain’s networks and even capture that answers U.S. security unusual. infrastructure deals involving fi le yet,” he added. He says on dealings with China. intelligence shared with objections. “There’s nothing new about Chinese companies. the Huawei issue, the British Britain. Britain has said it is that,” he said. “Margaret China is building nuclear security agencies “don’t have a Pompeo emphasized that planning to allow the Chinese Thatcher had rows with Ronald power plants in Britain, different view than that of the China’s Huawei if Britain uses Huawei’s telecom giant to participate Reagan, John Major with and Chinese companies are United States.” pioneering technology for in a limited role in developing Bill Clinton. It is the normal being encouraged by the He predicts there were America’s top diplomat its 5G network, it would the 5G network. Of cials talk situation between friends. British government to bid for fi will be weeks of technical delivered a blunt public be putting at risk the about ensuring that Huawei’s Occasionally you disagree.” contracts to build and manage discussions. warning in London about longstanding intelligence- participation is kept in non- He believes there’s a work- HS2, a high-speed railway that, “The devil will be in the doing business with China and sharing arrangement it has core areas. The decision was around, pointing out that when completed, will directly details,” he said. “The question specifi cally about using the with Washington — the rock on made by Prime Minister May, Huawei has been highly link London, Birmingham, will be, ‘Can you take some of technology of Chinese telecom which the special relationship over the objections of her involved in Britain’s current the East Midlands, Leeds and Huawei’s technology and put giant Huawei to develop is built. security and defense chiefs. 4G network and its role is Manchester. it in places where it doesn’t Britain’s fi fth-generation “Insuf cient security will On Thursday, in an interview monitored by a team of British If Britain does give Huawei fi matter and still guarantee (5G) wireless network. He impede the United States’ with a Chinese media outlet, intelligence operatives “to even a limited role in building security?’” urged Britain to rethink its ability to share certain the country’s fi nance minister, make sure there’s no mischief.” its future 5G network, the HEADLINE NEWS & ANALYSIS 9 FINCHANNEL.COM | 13 MAY, 2019 ppublicityublicity

2)),&,$/5(35(6(17$7,9(,1*(25*,$ 6$*$,03(; ZZZVDJDJH  10 HEADLINE NEWS & ANALYSIS FFactCheckactCheck 13 MAY, 2019 | FINCHANNEL.COM Belarusian President Says Damages From Contaminated Irakli Abesadze: Russian Oil ‘Enormous’

STATEMENT: “THOUSANDS OF JOBS HAVE BEEN LOST BECAUSE OF BANKING REGULATIONS, THERE IS A USURY PROBLEM AND IT IS PRECISELY BECAUSE OF THE REGULATIONS THAT THE WORLD BANK AND THE INTERNATIONAL MONETARY FUND DECREASED THE ESTIMATED ECONOMIC GROWTH RATE FROM 5% TO 4.6%.” VERDICT: FACTCHECK LEAVES IRAKLI ABESADZE’S STATEMENT WITHOUT A VERDICT.

Egnate SHAMUGIA statement WITHOUT A some statistical data. In his VERDICT. interview with FactCheck, FactChek Mr Abesadze said that he does ANALYSIS not have such statistics and made his statement based on European Georgia MP, Irakli information in the media. RESUME: Abesadze, in his speech before In April 2019, the Since January 2019, the the Parliament of Georgia, International Monetary Fund National Bank’s new lending spoke about the outcomes updated the 2019 economic regulations have entered into of the lending regulations review and estimates. In force and requirements for imposed by the National Bank accordance with the updated taking loans have become of Georgia. As stated by Mr The FINANCIAL -- Belarusian and to the oil refi neries,” crude oil output, but it must estimates, Georgia’s economic President Alyaksandr Lukashenko said. be separated before the crude stricter. Therefore, this could Abesadze, the regulations growth in 2019 is 4.6% and Lukashenka has said that He said he expects the costs oil is shipped to refi neries possibly have an impact upon which entered into force this has not been changed this year’s employment and from January 2019 resulted as compared to February the cost of damages from to run into the hundreds of because it can destroy refi nery jobs indicators. However, in decreased jobs, pushed estimates. In February 2019, contaminated oil received millions of dollars and that he equipment. fi rst quarter data of 2019 is loans into the “black market” an IMF representative noted via the Russian Druzhba oil hopes Russia will not dispute The state-owned pipeline not yet available and even if and caused a decrease in the that whilst making the 4.6% pipeline was “enormous” the fi gures. operator Transneft has said it were, we would be unable estimates for economic growth. economic growth estimate, a and that Belarus expects Russia late in April the contamination could to assert whether or not the These regulations impose less favourable external compensation from Russia. halted oil fl ows through the have been deliberate, and changes in employment in a lending restrictions on environment and the “Right now, we are Druzhba pipeline because of that a criminal case had been certain sector are related to a commercial banks and micro- impact of a slow growth evaluating the damage,” contaminated crude. opened. specifi c regulation. Therefore, fi nance organisations. This of lending upon the economy Lukashenka was quoted as Belarus has said that The Druzhba pipeline Irakli Abesadze could not base means they are obliged was taken into account. saying on May 11 by the state- the source of “chlorine carries oil from Russia and his statement vis-à-vis job to study and analyse an However, it is also noted that run Belta news agency. contamination” of the oil was Kazakhstan through Belarus losses upon specifi c fi gures. individual’s solvency. the growth of the budget’s “Damage is enormous found within Russia along the to refi neries in Poland, FactCheck, however, also Apart from the necessity of capital expenditures counter- to the pipeline, to the pipeline’s Samara-Unecha Germany, and Slovakia. lacks the possibility to verify the solvency analysis, the balances the negative factors. equipment on the pipelines, section. the accuracy of the statement. regulations impose additional Of further note is that the including pumps on the Organic chloride is typically Based on reporting by In regard to the usury and the requirements, including the share of the budget’s capital facilities and the like, used by producers to increase Belta and Reuters so-called “black market” in requirement that the difference expenditures increased in Irakli Abesadze’s statement, between a borrower’s net 2018 which has an impact in it is practically impossible to income and the loan payment 2019 as well whilst these types measure the latter. However, should not be less than the of expenditures increased theoretically it is possible that subsistence minimum (the further in 2019. Of additional he made a fair supposition. The subsistence minimum is note is that the International author of the statement also currently GEL 181). The Monetary Fund slashed Electric cars: EU trade does not have respective data. National Bank’s president Georgia’s 2019 economic April 2019 was the last issued the aforementioned growth rate estimate from time when the International regulations on 24 December 4.8% to 4.6% in December Monetary Fund (IMF) updated 2018 and they went into force 2018. The IMF stated that surplus of € 3 billion estimates for 2019’s economic on 1 January 2019. Therefore, the economic situation in growth rate and the 4.6% growth the economic regulations Georgia’s trade partners and estimate for Georgia was kept will start to affect economic in the region was the reason unchanged. This happened in indicators from this year. behind the decision. The light of the IMF’s decision to cut The National Statistics IMF particularly emphasised estimates for Georgia’s main Offi ce of Georgia produces economic processes in Turkey. trade partners. Of note is that statistical data about jobs Georgia’s main trade in the IMF’s review and when as part of its business sector partners (in terms of the share speaking about estimates of statistics. However, the in total exports in 2018) are economic growth, emphasis is latest information about as follows: Azerbaijan (15%), made upon the less favourable jobs and employment in Russia (13%), Armenia (8.3%), external environment and the business sector for the Bulgaria (7.7%), Turkey the impact of the slow growth present moment only includes (6.9%) and Ukraine (5.2%). In of lending. The latter refers the fourth quarter data of April 2019, the IMF slashed to lending regulations. As of 2018. In addition, the latest economic growth estimates January 2019, Georgia’s 2019 statistical information about for Azerbaijan, Russia and economic growth rate was 5% employment/unemployment Armenia by 0.2% whilst it in the World Bank’s assessment compiled through the research increased for Bulgaria by which was decreased to 4.6% at study of workforce also 0.2%. In regard to Turkey, its the beginning of April. A weak includes the fourth quarter economic growth rate estimate external demand and the so- of 2018. In turn, the National dropped from 0.4% to -2.9%. called “responsible lending” Statistics Offi ce of Georgia will Of note is that in light of – lending regulations – were publish 2019’s fi rst quarter these factors and the general named as the reasons behind indicators on 20 May 2019. decrease in regional economic the World Bank’s decision. Therefore, the MP’s talk about growth after December At the present moment this year’s employment fi gures 2018, the IMF left Georgia’s and in accordance with both is groundless in terms of facts estimated economic growth The FINANCIAL the World Bank and the and statistics because not rate unchanged at 4.6%. At the the United States (23 %) also among the top four IMF’s assessments, Georgia’s such information is available beginning of April 2019, the and China (10 %). Member States importing estimated economic growth at this moment. In regard to World Bank published updated Imports into the EU electric and hybrid electric rate for 2019 is 4.6%. In loans being pushed into the estimates of macroeconomic n 2018 the European came primarily from cars from outside of the addition, both of them notes “black market” and a usury estimates for European and Union (EU) exported South Korea (48 % of EU: Germany (26 % of EU that stricter lending will problem, there is no factual Central Asian (without high- € 4.7 billion worth of evidence to support this imports in terms of value), imports in terms of value), negatively affect economic income) countries. In this electric cars and hybrid Japan (35 %) and the Belgium and Sweden growth, although it will have because information about document, Georgia’s 2019 electric cars that can these activities is not compiled; United States (10 %). (both 16 %) and the a positive impact upon the economic growth estimate Ibe driven in combination hence, the term “black market.” Among the EU Member United Kingdom (15 %). sector’s stability and this factor decreased to 4.6% whilst it with a petrol or diesel is taken into consideration Lending money by individuals was 5.0% as of January 2019. States, the largest exporter Overall, trade in electric in their estimates. Therefore, is not under a legal framework The World Bank indicates that engine. Imports of of electric and hybrid and hybrid electric cars was regulations on lending are not and information about it is not the decrease is stipulated by electric and hybrid electric electric cars to countries dominated by hybrid petrol the only reason behind the generated and registered. a weakening foreign demand cars were worth € 1.6 outside of the EU in 2018 cars, which accounted for decreased estimates of the IMF FactCheck contacted which in turn is related to billion, resulting in a trade and the World Bank. They are Irakli Abesadze in regard was Germany (64 % of 67 % of the value of EU the macroeconomic situation surplus of € 3.0 billion. export in terms of value), imports and 60 % of the just one factor. to his statement about the in Georgia’s trade partner The main destinations Given the aforementioned loss of jobs in the business countries as well as the followed by Sweden value of EU exports. Electric number of unspecifi ed sector and about the so-called for EU exports in 2018 (13 %) and the United cars alone accounted for 32 National Bank’s responsible were Norway (39 % of circumstances, FactCheck “black market” in order to lending policy. The latter refers Kingdom (10 %). These % of imports and 39 % of leaves Irakli Abesadze’s learn whether or not he had to lending regulations. exports in terms of value), three countries were exports. HEADLINE NEWS & ANALYSIS 11 FINCHANNEL.COM | 13 MAY, 2019 FFactCheckactCheck In 2018, CO2 emissions

in the EU decreased Salome compared with 2017 Samadashvili:

STATEMENT: “THE CURRENCY DEPRECIATED UNDER THE GEORGIAN DREAM GOVERNMENT AND THE BUDGET OF THE MINISTRY OF DEFENCE DECREASED AS COMPARED TO 2014 BECAUSE WE HAVE TO MAKE CALCULATIONS IN USD.” VERDICT: FACTCHECK CONCLUDES THAT SALOME SAMADASHVILI’S STATEMENT IS MOSTLY FALSE.

Vakhtang DEMURIA of Georgia and says “…you amount of the Ministry of depreciated the currency…” Defence’s budget is nearly FactChek is largely speculative. The GEL 875 million whilst GEL exchange rate is affected its actual budget was GEL by internal and external 667.4 million in 2014. The RESUME: objective factors which are share of the Ministry’s In 2019, the planned beyond the Government allocated funds in total budget for the Ministry of of Georgia’s control. Of budget expenses decreased Defence of Georgia is nearly importance is the USD index from 8.16% to 7.42% and the GEL 875 million whilst its dynamic whose sharp growth expenditures to GDP ratio actual budget was GEL 667.4 trend coincides with the decreased from 2.29% to million in 2014. However, start of the GEL depreciation 1.95%. Therefore, the context whilst analysing the budget process in the third quarter of Salome Samadashvili’s dynamics, it is necessary to of 2014. Taking this into statement in regard to a consider relative fi gures as consideration, saying that the decrease in the budget is well as absolute numbers. Government of Georgia has somewhat true. That said, infl uenced by factors such as In the case of the Ministry depreciated the currency is her line of argument which Eurostat climate conditions, economic and Bulgaria, of Defence, its expenditures incorrect. However, together leads to the aforementioned growth, size of the population, to GDP ratio decreased in with the external factors, conclusion is inaccurate estimates that transport and industrial highest 2019 from 2.29% to 1.95% as certain actions or inactions because it is inappropriate to activities. in 2018 carbon compared to 2014 despite a of the Government of Georgia calculate a budget in a foreign It should also be noted that increases in growth in nominal funding. also contributed to the GEL currency. It is possible that dioxide (CO2) imports and exports of energy In addition, the share of the depreciation (a low economic as a result of the changes in products have an impact Latvia Ministry’s allocated funds growth rate, the imposition the exchange rate, less goods emissions from on CO2 emissions in the According to Eurostat in total budget expenses of a stricter visa regime on a and services are purchased country where fossil fuels are estimates, CO2 emissions fossil fuel decreased from 8.16% to number of countries, poorly in USD. However, such kinds burned: for example if coal fell in 2018 in a majority of 1 7.42%. Therefore, the context planned reforms, unequal of expenses are only a part of combustion is imported this leads to an EU Member States, with of Salome Samadashvili’s spending of state fi nances, the budget and this cannot be increase in emissions, while if the highest decrease being statement is somewhat true. etc.). interpreted as a “decreased The FINANCIAL electricity is imported, it has recorded in Portugal (-9.0%), However, Salome budget.” no direct effect on emissions followed by Bulgaria (-8.1%), Samadashvili got her ANALYSIS That part of the statement in the importing country, as Ireland (-6.8%), Germany On 4 April 2019, United where Salome Samadashvili ignifi cantly decreased results from converting the these would be reported in the (-5.4%), the Netherlands National Movement MP, addresses the Government by 2.5% in the absolute fi gures in USD exporting country where it is (-4.6%) and Croatia (-4.3%). Salome Samadashvili, stated: of Georgia and says “…you European Union instead of making a correct produced. Increases were registered in “In fact, the budget of the depreciated the currency…” (EU), compared with analysis. Therefore, her line eight Member States: Latvia Ministry of Defence decreased is largely speculative. the previous year. of argument is inaccurate (+8.5%), ahead of Malta because the national currency The GEL exchange rate is SCO2 emissions are a major Largest falls in (+6.7%), Estonia (+4.5%), because it is inappropriate to depreciated under your affected by internal and contributor to global warming calculate a budget in a foreign Luxembourg (+3.7%), Poland government and we have to external objective factors. and account for around CO2 emissions currency. It is possible that (+3.5%), Slovakia (+2.4%), calculate the budget in USD. Under the Georgian Dream 80% of all EU greenhouse as a result of the changes in Finland (+1.9%) and Lithuania Since 2014, the Ministry’s government, certain of its gas emissions. They are in Portugal (+0.6%). the exchange rate, less goods and services are purchased in budget has decreased by USD actions or inactions, together USD although this cannot be 80 million.” with the diffi cult economic interpreted as a “decreased The Ministry of Finance of and geopolitical situation in budget” because such kinds Georgia publishes its budget the region, also contributed of expenses are only a part indicators. These indicators to the depreciation of GEL Industrial producer prices of the budget and not the are given in Georgia’s state against USD. One of the clear- whole. Naturally, the Ministry budget chapter of allocations. cut indicators here is the of Defence’s expenses are Whilst analysing budget USD index which has had a down by 0.1% in euro area made in accordance with the dynamics, it is necessary growth trend since 2014 and contracts concluded both in to consider relative fi gures is beyond the Government of Industrial producer Annual comparison by GEL and USD as well as in together with nominal ones. Georgia’s control. Up by 0.1% in prices in the euro area in main industrial grouping and other currencies, a part of In the case of the Ministry which might have depreciated of Defence’s budget, the 1 For instance, in 2016 it EU28 March 2019, compared by Member State was proposed to separate with February 2019, fell by Industrial producer prices against GEL (for instance expenses to GDP ratio, as well UAH). as their share in total budget the supervisory function 0.5% for the energy sector, in the euro area in March from the National Bank of The FINANCIAL remained stable for non- 2019, compared with March That part of the statement expenses, have decreased in where Salome Samadashvili 2019 as compared to 2014. Georgia, impose a stricter durable consumer goods, 2018, rose by 7.8% in the visa regime, etc. and rose by 0.1% for both energy sector, by 1.5% for addresses the Government In 2019, the planned n March 2019, compared with capital goods and durable both capital goods and February 2019, industrial consumer goods and by durable consumer goods, by producer prices fell by 0.1% 0.2% for intermediate goods. 1.3% for intermediate goods in the euro area (EA19) and Prices in total industry and by 0.1% for non-durable rose by 0.1% in the EU28, excluding energy remained consumer goods. Prices in Iaccording to estimates from Graph 1: Ministry of Defence Budget Dynamics in 2014-2019 (GEL Million) stable. total industry excluding Eurostat, the statistical offi ce In the EU28, industrial energy rose by 1.0%. of the European Union. In producer prices rose by In the EU28, industrial February 2019, prices increased 0.2% for intermediate goods, producer prices rose by 8.2% by 0.1% in the euro area and by by 0.1% for capital goods, in the energy sector, by 1.7% 0.2% in the EU28. durable consumer goods and for intermediate goods, by In March 2019, compared non-durable consumer goods, 1.6% for durable consumer with March 2018, industrial while prices in the energy goods, by 1.5% for capital producer prices rose by 2.9% sector remained stable. Prices goods and by 0.5% for non- in the euro area and by 3.1% in total industry excluding durable consumer goods. in the EU28. energy rose by 0.2%. Prices in total industry The largest decreases in excluding energy rose by Monthly industrial producer prices 1.3%. were recorded in Denmark Industrial producer prices comparison by (-1.6%), Cyprus (-1.2%) rose in all Member States, and Estonia (-0.8%), while with the highest increases main industrial the highest increases were recorded in Romania grouping and by observed in Greece (+1.1%), (+6.7%), Belgium (+6.4%), Luxembourg and Romania Latvia (+6.1%) and Hungary Member State (both +0.8%). (+5.5%). Source: Ministry of Finance of Georgia 12 HEADLINE NEWS & ANALYSIS ppublicityublicity 13 MAY, 2019 | FINCHANNEL.COM HEADLINE NEWS & ANALYSIS 13 FINCHANNEL.COM | 13 MAY, 2019 fi nancialnancial newsnews New Variable Created for Degree of Urbanisation Worldwide Lewis DIJKSTRA And Andrew RZEPA Gallup

The FINANCIAL -- Migration has been a driving force behind some of the biggest changes around the world -- particularly over the past two decades. The shift of individuals moving from rural areas to urban areas has not only driven economic development, but also created myriad challenges for policymakers who need to understand the needs and requirements of these individuals. An often-cited United Nations data point is that since 2009, more people are living in urban areas than rural. Despite the signifi cance of this fi nding, until recently, little has been known about the distribution and degree of urbanicity of the world’s urban populations. This is a consequence of the fragmented way that countries have historically determined what classifi es as urban. In response to this lack of a common defi nition, a coalition of six international organizations (the EU, FAO, ILO, OECD, UN- Habitat and the World Bank) have developed a single global defi nition called the Degree of Urbanisation. They have applied this defi nition to an estimated global population grid, thereby creating a single, consistent defi nition of urbanisation that could countries in 2017 and 65 countries has widescale ramifi cations for Urbanisation variable is available of Urbanisation against the battery be applied uniformly to any specifi c in 2016. By overlaying the interview policymaking. It can facilitate through a free download (as a .csv of Gallup’s core World Poll variables, geographic area. geotags against this geospatial layer, the sharing of best practices fi le) that Gallup data subscribers including: happiness, access to good Gallup partnered with the European we were able to obtain a new globally across communities with similar can integrate back into the 2016 and jobs and desire to migrate. It also Commission in 2018 to review over consistent, harmonized Degree of characteristics and improve policies 2017 World Poll data sets. creates an opportunity for Gallup’s 170,000 face-to-face geotagged Urbanisation variable for every responsible for resource allocation This variable provides subscribers clients to explore the impact of interviews collected through the interview. or aid distribution. with an unprecedented opportunity urbanicity on SDG indicators such as Gallup World Poll in more than 109 This new standardized variable The newly developed Degree of to explore the impact of the Degree food security and fi nancial inclusion.

Accor launches plan with An Off Year Puts Asset Managers WOJO to become largest coworking brand in Under Renewed Stress

Europe by 2022 NEW YORK—Asset managers must blaze new strategic trails to put their Bouygues Immobilier and WOJO growth trends on a more consistent Continued from p. 6 will be integrated from the outset in track following a diffi cult year— certain real estate projects. especially in an industry largely airports and shopping malls. This The strategic network offered by dominated by a small number of coworking experience is designed the combination of WOJO Spots, players—according to a new report by for local and coworkers customers, Corners & Sites refl ects WOJO’s Boston Consulting Group (BCG). The with recurring weekly needs, seeking desire to provide shared workspaces report, titled How Asset Managers Can an informal and comfortable work in iconic, central and strategic Win in a Winner-Takes-All World is environment. being released last week. locations. The WOJO sites are Positioned as a precursor to BCG’s The fi rst WOJO Corner was historically the fi rst spaces to have annual Global Asset Management launched in 2018 in the Mercure been deployed: 10 sites are currently study, which is due out later this year, Paris Montmartre Sacré-Cœur hotel. open in Ile-de-France and Lyon the report offers a comprehensive Building on the success of this pilot (with over 5000 members). Wojo look at industry performance in 2018, in the heart of Paris, more than sites will expand rapidly across examines the battle between active and 100 other WOJO Corners will open Europe with a target of more than 50 passive strategies, and explores the throughout Europe by 2022. locations by 2022. winner-takes-all dynamic. Sounding a As a result, Accor is the fi rst global call to action, the report also outlines 2017. Net new fl ows, meanwhile, were respect. Just 5 of the top 15 strategies hotel group to collaborate with a optimal next steps for asset managers 0.9%—considerably weaker than the were passive, while the remainder WOJO Sites, the “all recognized player in the coworking in their quests to stem the tide and gain record 3.1% seen in 2017. The historical were active. in one” coworking fi eld to present a brand experience or maintain competitive advantage. average is about 1.5%. “Passive is increasingly popular that is unique in its scope and “In a worst-case scenario, by 2023, The shifting patterns of AuM were with both retail and institutional solution content and is open to travelers and profi ts will have decreased by nearly refl ected in revenues, with aggregate investors, and a price war is locals alike. one-third,” said Renaud Fages, a BCG revenues rising by 3%, measurably proceeding apace,” said Dean Frankle, These are unique stand-alone partner based in New York, coauthor less than the 9% gain seen in 2017. a BCG principal based in London, coworking spaces over several of the report, and global leader of the Costs, meanwhile, continued to rise coauthor of the report, and the fi rm’s thousand square meters in dedicated Augmented fi rm’s asset management segment. as the industry struggled to adjust to asset management topic leader in “However, the outlook is not entirely the UK. “Some active managers buildings, combining communal the macroeconomic environment and hospitality comes to gloomy. Challenging periods present fi rms invested in, for example, data and have responded by restructuring fee zones (bars, lounges, kitchens) opportunities for change and, in a analytics. Regulatory measures, such schedules, shutting underperforming with shared spaces, meeting rooms life for consumers largely winner-takes-all world, the as the updated Markets in Financial funds, and launching new products.” and dedicated offi ces. They bring chance to get ahead of the competition.” Instruments Directive, were also major The Winner-Takes-All Dynamic. together on one site a wide range of The rollout of a global coworking A Diffi cult Year in Terms of Overall drivers of increasing costs. The average Overall, in terms of fl ows, 2018 was entrepreneurs, department of large experience with WOJO is yet another Performance. According to the report, cost-to-income ratio of our sample was a challenging year. In the US, $620 companies, startups and smaller proof point of Accor’s broader the asset management industry, after 66% in 2018, up slightly from 65% billion of in fl ows were offset by $491 companies to form a dynamic, vision to increase its relevance in several years of stellar performance, 2017. billion of outfl ows. The trend in recent integrated community. Unlike the daily lives of consumers. Steven found in 2018 that it had to adjust. Active Asset Managers Are Feeling years has been for winning fi rms to Spots and Corners, it is possible to Taylor, Chief Brand Offi cer: “We Bouts of fi nancial-market volatility, the Heat. The battle between active capture the lion’s share of infl ows, rent offi ces and benefi t from a wide are reimagining hospitality not as tightening monetary policy, and and passive strategies continued to and that continued in 2018, albeit at range of services. As heralds of a new a place or service, but as infi nite slowing global growth created a more play out in 2018, with passive grabbing a slightly slower rate—and mainly in lifestyle at work, WOJO sites are led connected moments, whether you challenging environment. most of the net infl ows in the US, while the US. The top ten US players cap- by a “business partners” teams who want to live, work, or play. We Assets under management (AuM), active held its own in Europe and Asia- tured 81% of net mutual fund fl ows of are dedicated to the well-being of are creating a holistic ecosystem net infl ows, and revenues came under Pacifi c. Ten of the 15 most popular fi rms with positive fl ows, compared members and to connecting them around the consumer and WOJO is considerable duress. In a sample of strategies in the US were passive, with with 85% in 2017. In Europe, the top strategically with other members 30 managers from around the world global, emerging-market, and specialty ten accounted for 29% of infl ows in a great example of how our unique representing AuM of $39 trillion— 2018, compared with 35% in 2017. in the network to create new themes continuing to prosper. One- augmented hospitality strategy will roughly half the industry—BCG found third of the top 15 were dedicated to business opportunities. These sites allow us to connect into the everyday that AuM fell by 4% in 2018, a marked such motifs. The European market are developed in partnership with lives of customers.” turnaround from the 12% rise seen in continued to lag behind the US in that Continued on p. 16 14 HEADLINE NEWS & ANALYSIS ppublicityublicity 13 MAY, 2019 | FINCHANNEL.COM

Advertiser: The FINANCIAL. Contact FINANCIAL Ad Dep at marketing@fi nchannel.com HEADLINE NEWS & ANALYSIS 15 FINCHANNEL.COM | 13 MAY, 2019 fi nnancialancial newsnews Volume of More Than One in Five retail trade Millennials Still Live With Mom unchanged in euro area Up by 0.3% in EU28 The FINANCIAL

n MMarcharch 20192019 ccomparedompared withwith FFebruaryebruary 2019,2019, tthehe sseasonallyeasonally aadjusteddjusted volumevolume ofof retailretail tradetrade rremainedemained unchangedunchanged inin thethe eeurouro areaarea (EA19),(EA19), andand increasedincreased Ibyby 0.3%0.3% inin thethe EU28,EU28, accordingaccording ttoo estimatesestimates fromfrom Eurostat,Eurostat, thethe sstatisticaltatistical ofoffi cece ofof thethe EuropeanEuropean UUnion.nion. IInn FFebruaryebruary 22019,019, tthehe rretailetail tradetrade volumevolume increasedincreased byby 00.5%.5% inin bothboth thethe euroeuro areaarea andand EEU28.U28. InIn MMarcharch 22019019 ccomparedompared wwithith MMarcharch 2018,2018, tthehe ccalendaralendar adjustedadjusted rretailetail salessales indexindex increasedincreased byby 11.9%.9% iinn tthehe euroeuro areaarea andand byby 2.9%2.9% iinn thethe EU28EU28 MMonthlyonthly The FINANCIAL -- More people stereotype these young adults as lazy present-day affordability challenges New York have the highest share of ccomparisonomparison age 23-37 are living with their millennials bumming off of mom, for those looking to rent and long- millennials living with their moms – moms than at any time this century, the data paints a different picture,” term diffi culties in saving for a down at least 31%. These four metros are according to a Zillow® analysisi. said Zillow Senior Economist Sarah payment on a fi rst home. Recent all among the seven least affordable bbyy rretailetail Nearly 22% of American millennials Mikhitarian. “When the housing Zillow research found today’s rental markets in the country. – more than 14 million in total – live market went bust and the economy renters need an extra year and a half Millennials in Seattle, Austin, sectorsector andand byby with their mom or both parents, unraveled into a recession, young to save for a down payment than Portland, Kansas City and Denver the highest share for this age group adults increasingly returned to their parents’ generation 30 years will likely need to travel to visit their since at least 2000. their childhood home. And, despite earlier. moms on Mother’s Day. The smallest MMemberember StateState The share of young adults living a strong labor market and fairly Those that choose to live with share of young adults live with mom with mom has increased steadily robust economic recovery, this trend their moms and build up their in these markets, below 15% in each InIn tthehe euroeuro areaarea inin MarchMarch 2019,2019, since 2001 – more than doubling has continued in the face of rising savings may have a leg up. An case. In these booming, expensive ccomparedompared withwith FebruaryFebruary 2019,2019, thethe from 6.8 million (11.7%) to 14.3 housing costs and deteriorating analysis from HotPads®, a Zillow markets, it’s likely that fewer young vvolumeolume ofof retailretail tradetrade increasedincreased byby million (21.9%). affordability. Living with mom as Group-owned apartment- and adults live with mom because family 00.6%.6% fforor ffood,ood, drinksdrinks aandnd ttobacco,obacco, While the economy has recovered an adult can certainly bring its share home-search platform, showed that is far away rather than because rents wwhilehile automotiveautomotive fuelfuel decreaseddecreased since the housing bust and recession of headaches, but the benefi ts go living rent-free with parents can are more affordable. bbyy 0.6%0.6% andand non-foodnon-food productsproducts of the mid-2000s, young people beyond the occasional home-cooked allow you to afford a down payment The median monthly rent price in bbyy 0.4%.0.4%. IInn tthehe EU28,EU28, thethe retailretail living with their moms has continued meal – living under mom’s roof can on a home nearly three years sooner. the U.S. is $1,474, up 2.5% from a ttraderade volumevolume increasedincreased byby 0.5%0.5% to rise. The share of those living allow young adults to save enough And a small share of this young adult year earlier, according to the Zillow fforor food,food, drinksdrinks andand tobaccotobacco andand at home that are unemployed has money for a down payment, security population is actually hosting mom Rent Indexii. Zillow predicts rents bbyy 0.2%0.2% forfor non-foodnon-food products,products, fallen to 10.3% from 19.5% in 2010, deposit or some other big expense. in their own home – perhaps to take will rise an additional 1.8% in the wwhilehile automotiveautomotive fuelfuel remainedremained indicating that more young people Not to mention you won’t have to care of her as she ages or to have coming year and reach the $1,500 sstable.table. are struggling to afford independent travel far to take your mom out to help raising children of their own. threshold. AAmongmong MemberMember StatesStates forfor housing even while holding a job. dinner this Mother’s Day.” Among large housing markets, wwhichhich datadata areare available,available, thethe “While it might be tempting to Rents are on the rise, bringing Riverside, Miami, Los Angeles and llargestargest increasesincreases inin thethe totaltotal retailretail ttraderade volumevolume werewere registeredregistered iinn LithuaniaLithuania ((+1.7%),+1.7%), PPortugalortugal ((+1.2%)+1.2%) aandnd tthehe UnitedUnited KingdomKingdom ((+1.1%).+1.1%). TThehe hhighestighest decreasesdecreases EBRD sees stronger growth in southern wwereere observedobserved inin SloveniaSlovenia (-3.1%),(-3.1%), CCroatiaroatia (-1.9%)(-1.9%) aandnd AAustriaustria and eastern Mediterranean in 2019/2020 ((-0.8%).-0.8%). The FINANCIAL -- Countries in the In Egypt, it is tourism, natural gas fi nance for small fi rms. reconstruction efforts in Syria, should AAnnualnnual southern and eastern Mediterranean production, telecommunications, Jordan will also likely benefi t from the situation stabilise in that country. (SEMED) will see stronger growth in construction and Suez Canal revenues greater confi dence on the back of In Morocco, growth is expected both 2019 and 2020, bucking a trend that have driven strong growth, with commitments made at a conference in to improve to 3.2 per cent in 2019 ccomparisonomparison of slowing economic expansion this the economy likely to expand by 5.5 London in February 2019 in support and 3.8 per cent in 2020 driven by year in the rest of the EBRD regions, per cent in the fi scal year 2018-19 and of investment, growth and jobs in stronger non-agriculture growth, after bbyy rretailetail according to the EBRD’s latest by 5.9 per cent in 2019-20, compared the country and from rising exports a slowdown to 3.1 per cent in 2018. economic outlook. with a previous 5.3 per cent. following the re-opening of the border The likely upturn will refl ect improved Average growth across the fi ve The main risks to the outlook with Iraq. fi scal management and economic sectorsector andand byby SEMED countries – Egypt, Jordan, arise from a persistent wait-and-see Lebanon is likely to see only a small diversifi cation away from agriculture, Lebanon, Morocco and Tunisia – is approach taken by foreign investors pickup in growth after a slowdown to a further recovery in tourist arrivals, MMemberember StateState expected to rise to 4.6 per cent this and the erosion of competitiveness just 0.2 per cent in 2018. The outlook strong foreign direct investment, year from 4.4 per cent in 2018 and because of the recent appreciation remains uncertain. rapid expansion of the automotive and InIn tthehe euroeuro areaarea inin MarchMarch 2019,2019, increase further to 5.1 per cent in of the pound and stubbornly high Investment and private aeronautics industries and expanded ccomparedompared withwith MarchMarch 2018,2018, thethe 2020. infl ation. The risks are partially consumption were dampened by mining capacity. vvolumeolume ofof retailretail tradetrade increasedincreased The EBRD’s report says social mitigated by the authorities’ strong political uncertainty following May Economic growth in Tunisia bbyy 3.0%3.0% forfor non-non- foodfood products,products, unrest and political instability commitment to the implementation of 2018 elections and by a “wait-and-see” accelerated to 2.5 per cent in 2018, the byby 1.4%1.4% forfor automotiveautomotive fuelsfuels in Jordan and Lebanon delayed structural reforms. approach following the April 2018 fastest growth since 2012, benefi tting aandnd byby 0.7%0.7% forfor food,food, drinksdrinks andand implementation of various reforms Growth in Jordan will rise only CEDRE conference in Paris, which from an upturn in agriculture on the last year. However, tourism continued moderately in 2019 and 2020 and the aimed to spur donor and investor back of favourable weather conditions ttobacco.obacco. InIn tthehe EU28,EU28, thethe retailretail to strengthen in most countries and pace of economic activity is likely to support for the Lebanese economy. and input from the tourism and ttraderade volumevolume increasedincreased byby 4.4%4.4% competitiveness in Tunisia improved remain well below levels seen before Growth is expected to remain low banking sectors. fforor non-foodnon-food products,products, byby 4.1%4.1% forfor due to currency depreciation. The the start of instability in neighbouring at 1.3 per cent in 2019 and 2.0 per Growth in 2019 is forecast to aautomotiveutomotive fuelfuel andand byby 0.4%0.4% forfor sound implementation of reforms Syria and Iraq in 2010 that has exerted cent in 2020, refl ecting lack of clarity rise only slightly to just 2.7 per ffood,ood, drinksdrinks aandnd ttobacco.obacco. propelled Egypt to its highest growth signifi cant pressure on the domestic regarding sources of economic growth, cent, held back by the delay in the AAmongmong MemberMember StatesStates forfor rate in a decade. economy. political and security risks, both implementation of structural reforms, wwhichhich datadata areare available,available, thethe Economic activity in SEMED The EBRD expects modest domestic and regional, and subdued primarily due to political uncertainty hhighestighest yearlyyearly increasesincreases inin thethe is expected to benefi t from the expansion of 2.2 per cent in 2019 growth in traditional drivers such as ahead of elections later in 2019. ttotalotal retailretail tradetrade volumevolume werewere implementation of economic reforms and 2.4 per cent in 2020, after just tourism, real estate, and construction. In 2020, once the elections are over, rregisteredegistered inin IrelandIreland (+10.8%),(+10.8%), and business environment upgrades 1.9 per cent in 2018. Supporting Any improvement in the the EBRD expects a recovery in foreign RRomaniaomania ((+9.3%),+9.3%), CCroatiaroatia aandnd to promote domestic and foreign factors for the Jordanian economy outlook depends on the successful investor confi dence in Tunisia’s LLuxembourguxembourg (both(both +8.6%).+8.6%). investment. Greater domestic and should include the implementation implementation of reforms pledged reform momentum which should political certainty should also support of structural reforms, domestic and by the government in the context of result in a signifi cant improvement in DDecreasesecreases werewere observedobserved forfor growth, which will nevertheless foreign investment, lower imported the CEDRE Conference. Lebanon is both domestic and foreign investment SSlovakialovakia ((-2.0%),-2.0%), AAustriaustria ((-1.0%)-1.0%) remain below pre-2011 levels. energy costs and increased access to also well placed to benefi t from the and push growth to above 4.0 per cent. aandnd BelgiumBelgium (-0.9%)(-0.9%) 16 HEADLINE NEWS & ANALYSIS fi nancialnancial newsnews 13 MAY, 2019 | FINCHANNEL.COM In U.S., Real Estate Still Leads Stocks as Best Investment

Jeffrey M. JONES Gallup AMERICA

WASHINGTON, D.C. -- Stocks have had a strong 2019, with the major U.S. stock indices establishing or nearing record highs in April and early May. Still, more Americans continue to believe real estate (35%) is a superior long-term investment to stocks (27%) or other investment options. The April 1-9 Gallup poll was conducted amid the ongoing bull stock market, but before the recent stock index records. In recent years, the real estate market has also been hot, with home values in 2018 the highest on record, and Americans expect home prices to continue to rise. Gallup has asked a version of the best investment question since 2002, and Americans’ choices have varied, largely in response to the performance of the various investment options. In 2002, as housing prices were increasing rapidly, 50% of U.S. adults said real estate was the best investment, the highest percentage choosing any investment type in a single year in Gallup’s trend. Five years later, as the real estate bubble was about to burst after values peaked, housing still ranked fi rst but with fewer Americans, 37%, choosing it. in recent years, improving only Between 2008 and 2010, covering slightly from the low point of 52% most of the Great Recession period registered in 2013 and 2016, despite that saw plummeting home and stock the strong performance of stocks. values, Americans were as likely to The rate of stock ownership remains name savings accounts or CDs as the signifi cantly lower than it was before best long-term investment as they the Great Recession, including 62% were to name stocks or real estate. in 2007. Gold topped the list the fi rst two Previous Gallup analysis showed years Gallup included it as one of that stock ownership has declined the options, in 2011 and 2012, and among most major U.S. subgroups essentially tied for fi rst in 2013. In since before the recession, with recent years, with both real estate the exception of upper-income and and stocks showing consistent gains older Americans. and gold prices falling from their Stock owners, not surprisingly, 2011 high point, the allure of gold are more positive than the general has faded. The 14% choosing gold as public is about stocks as an the best investment this year is down investment. Thirty-seven percent from 34% in 2011. of stock owners (compared with 27% of U.S. adults) rank stocks as the best long-term investment Stock Ownership option, essentially tying it for fi rst with real estate (38%) among stock Steady, but Not investors. question about the best long-term real estate, perhaps because the second home or another type of real Americans who own both stocks investment. This group of investors question wording asked respondents estate investment is not as appealing Back to Pre- and a home are also divided as to was even more positive about stocks to exclude their primary home as stocks are. which is the best investment, with as a long-term investment, with when thinking of real estate as an Americans who do not own either Recession Figures 40% choosing real estate and 38% 54% choosing mutual funds as the investment. The differing results stocks or a home are more inclined stocks. best long-term investment and an between the two surveys suggest that to see real estate (31%) as a better The percentage of Americans A 2018 Wells Fargo/Gallup survey additional 11% choosing individual many stock owners see a primary investment option than stocks who invest in the stock market -- asked U.S. investors with $10,000 stocks. home as a solid investment -- one (18%), while 23% choose savings 55% -- has stayed relatively steady or more in investments a similar In that survey, just 19% chose that is on par with stocks -- but that a accounts or CDs. Empowered Women Will Drive An Off Year Puts Asset Economic Growth in the Pacifi c Managers Under The FINANCIAL -- Making it easier for agencies, civil society organizations, the under-representation of women women in the Pacifi c to start businesses and the private sector. This book, in the Pacifi c in economic activities. and gain formal employment will with its innovative and pragmatic Women constitute just 34% of the Renewed Stress improve livelihoods and create more recommendations, will help these formal workforce in Fiji and only 29% open and productive economies, says institutions formulate effective in Samoa, where they earn 62% less that, in truth, neither approach alone a recently released book by the Asian programs to ensure women in the on average than men. In Tonga, only Continued from p. 13 is suffi cient: CEOs must embrace both. Development Bank (ADB). Pacifi c can participate fully in their 18% of formal businesses are women- In a time of adversity, the most unwise Women and Business in the Pacifi c, economies.” owned, while only 25% of small and The winner-takes-all trend was less choice is to do nothing. a joint publication from ADB’s Pacifi c “No nation can reach its economic medium-sized enterprises are owned entrenched there, mainly because both “As leaders contemplate a tough- Private Sector Development Initiative potential without harnessing the by women in Papua New Guinea (PNG). the market and distribution methods er future, they should concentrate (PSDI) and the Government of energy, skills, ideas, and talent of Only 8% of state-owned enterprise are more fragmented. on costs with a simultaneous focus Australia, examines how women in women. With the diversity of ways board members in Vanuatu are women, Optimal Next Steps for Asset on ensuring that clients are highly seven Pacifi c countries engage in the it presents to support women’s and only 10% in PNG are. Managers. According to BCG, there motivated to remain on board,” said private sector. It identifi es numerous empowerment and their equal “Women and Business catalogues, are two key strategic approaches for Qin Xu, a BCG partner based in Hong barriers to women’s entrepreneurship access to economic opportunities, analyzes, and seeks to inform responses asset managers working to prepare Kong, coauthor of the report, and the and employment, and suggests a Women and Business in the Pacifi c to the contexts that economically for the future: shoring up defenses fi rm’s asset management topic leader range of responses for each country to will help governments, business, aid marginalize women in Pacifi c and adopting more aggressive in Asia. “However, asset managers consider. organizations, and women in the Pacifi c countries. These include limited access strategies. Defensive moves include may also consider more aggressive “Women’s economic empowerment themselves to achieve the goal of seeing to land, fi nance, skills training, and focusing intently on costs, reviewing approaches, including leveraging will not happen automatically or more women working and leading in trade and markets, as well as—more the portfolio, and optimizing pricing. advanced analytics, introducing quickly in Pacifi c island countries,” the private sector.” - said First Assistant broadly—threats to women’s autonomy Aggressive strategies, meanwhile, products, moving into new locations, said ADB Director General for the Secretary in Australia’s Department of and issues with dispute resolution and may comprise refocusing on and merging with peers. A downturn Pacifi c Ms. Carmela Locsin. “It will Foreign Affairs and Trade’s Offi ce of the enforcement of rights.” - said the client retention, leveraging data brings inevitable risk. Viewed require a sustained, collaborative the Pacifi c Ms. Kathy Klugman. book’s lead author and PSDI’s Gender and analytics, and seeking M&A constructively, however, it may present effort from governments, development Data collected for the book illustrates Expert Ms. Vijaya Nagarajan. opportunities. But BCG concludes an inviting window of opportunity.” HEADLINE NEWS & ANALYSIS 17 FINCHANNEL.COM | 13 MAY, 2019 | places we strongly reccommend to visit | hhotelsotels

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NINO BERIDZE'S Red Café - ORTHODONTIC CENTER Bistro & Cafe

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Respublika Grill Bar PICASSO PREGO

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Continued on p. 22 20 HEADLINE NEWS & ANALYSIS ppublicityublicity 13 MAY, 2019 | FINCHANNEL.COM