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Georgian Investment Group+ - 2011 Georgian Stock Market Annual Review, Jan 9, 2012.

Georgian Stock Exchange (Summarized Results)

Deals Number - 1281

Traded Stocks - 102 430 267

Money Turnover - 19 344 259 Gel ( USD 11 600 000 )

(To view the full report please click here:

http://reports.aiidatapro.com/brokers/GeorgianInvestmentEN/2011Georgian_StockMarket_Annual_Review_eng.pdf)

Georgian Stock Exchange (Trading Floor)

Annual Turnover of GSE Trading Floor:

Deals Number - 860

Traded Stocks - 12 077 996

Money Turnover - 2 503 705

(Source: GSE official website data)

As we see, the average monthly turnover of trading floor was 1 006 499 stocks and 208 642 Gel

Georgian Stock Exchange (Off exchange deals, fixation)

Annual Turnover of the Off exchange market (Fixation):

Deals Number - 421

Traded Stocks - 90 352 271 NNN[ETH]*

Money Turnover - 16 840 554 [ETH][ETH][degrees]N[ETH][cedilla]

(Source: GSE official website data)

As we see, the average monthly turnover of Off exchange market was:

Stocks turnover - 7 529 356 per month and 1 403 380 Gel in money point of view

Comparative view of trading floor vs. off exchange (fixation) market

Off exchange market (Fixation - deals, done on stocks, listed on Stock Exchange, without trading. GSE in that case is just collector of information due to the ongoing Law) prevailed on the Trading floor by 7.5 times in stocks view and in 6.7 times in the money point of discussion.

As we see, the statistics itself shows the reality - development of Stock Market in Georgia still facing the very low (bottom) stage and it is the direct (but not the alone) output of the present rules and, especially, the fixation (off exchange deals)

2011 Georgian Stock Market Review by Months

January, 2011

TRADES SUMMARY FOR January-2011 (table)

TRADING SYSTEM TRANSACTIONS SUMMARY FOR January-2011 (table)

There was not any significant uprising activity in January. From the stock we would like to mention demand on JSC aLiberty Banka. From the Money and total stocks outstanding point of view, the leader was JSC aGreen Capitala (former aGeoTransProjecta) - 13.61% shares were traded on the volume of 252 569 Gel. Price per share was fixed at 10.8 Gel. If we take into account the main asset of this company (many storeyed, well furnished business center in the central part of Tbilisi), the price per share looks a very low one. Based on it, the total markup should be just 1 855 760 Gel (a

little more than 1 mln USD).

The second position, based on money volume was occupied by JSC aBank of Georgiaa- 249 257 Gel.

February 2011

TRADES SUMMARY FOR February-2011 (table)

TRADING SYSTEM TRANSACTIONS SUMMARY FOR February-2011 (table)

The main demand on stocks in this month was again fixed on JSC aLiberty banka - 2 040 572 stocks. But if we look closely, it is a minuscule number, as the total number of stocks outstanding is 4 861 015 088.

Money Turnover - leader was JSC aBank of Georgiaa- 316 826 Gel

There were not fixed any important stake trading in February

March 2011

TRADES SUMMARY FOR March-2011 (table)

TRADING SYSTEM TRANSACTIONS SUMMARY FOR March-2011 (table)

We have seen uprising activity in March. The leaders from the stocks and money turnover view were the same - JSC aLiberty Banka - 1 595 500 stocks and JSC aBank of Georgiaa - 398 996 Gel. We would like to mention the price downward trend at JSC aBank of Georgiaa. Price plummeted from 35 Gel to the average 20 Gel at the end of 2011. It is the result of the ongoing world economic crisis and the shrinkage of investor's activity on the stock markets (Banks' stock is trading on the London Stock Exchange). As the outcome of this situation, the demand on stocks is plunged worldly.

April 2011

TRADES SUMMARY FOR April-2011 (table)

TRADING SYSTEM TRANSACTIONS SUMMARY FOR April-2011 (table)

The money volume in April has soared as the result of the definite deals (unfortunately off exchange deals, fixation). Most of traded stocks were fixed at JSC aLiberty Banka - 24 880 552 stocks, but money turnover was small - 625 575 Gel. During the 2011, the price of this stock has shown slowdown trend and decreased from 0.035 Gel to 0.002 Gel. In the money turnover, the leader was JSC aBank of Georgiaa - 1 786 684 Gel. The pivotal stake trading was fixed at the following companies: JSC aKutaisi Auto Service Rashia - 49% stocks were traded at price of 36 004 Gel (fixation); JSC aBusiness Center Sopmshenia (Business Center, close to aDelisia Underground) - 2% stocks, but price was a very low. It is hard to believe that this many storied Business Center total price is just 871 565 Gel(coming from capitalization) ...... JSC aTbilSilka - here the price trend was an opposite one. During the previous and after period the price of this stock was in the range of 0.30- - 0.70 Gel per stock. Unclear, what had happened in April of 2011 and why the price in this deal was 1.50 Gel. Turnover of stock in this deal was a very tiny and weighted average stake of the stocks too small. Price per stock here is unclear.a[bar]a[bar]

May 2011

TRADES SUMMARY FOR May-2011 (table)

TRADING SYSTEM TRANSACTIONS SUMMARY FOR May-2011 (table)

The leader of the month was JSC aBank Libertya - 5 335 350 stocks were traded and JSC aBank of Georgiaa - 755 332 Gel in money turnover.

The most strange and unclear deals of this month were deals on JSC aTelliani Valleya - 538 400 stocks were traded, but price was.... 0.01 Gel per stock (off exchange deal, fixation) anda[bar]. 0.14 Gel - at the same time, but via trading floor of Georgian Stock Exchange. What kind of Stock Market development could be discussed if the same stock, at the same date and time has the price different from each other at 14 times! And that is the legal, possible and adopted way. To have more scrutiny understanding, let's imagine yourself in this situation: You have purchased the product (stock, asset)

at price of 0.14 Gel and suddenly, you got the news, that.... you could buy this product at.....0.01 Gel (14 times cheaper)..... (no comments)a[bar]

June 2011

TRADES SUMMARY FOR June-2011 (table)

TRADING SYSTEM TRANSACTIONS SUMMARY FOR June-2011 (table)

June was an active trading period. The leader from the stocks turnover was the same - JSC aLiberty Banka - 4 231 134 stocks, from the money side - JSC aBank of Georgiaa - 848 296 Gel

From the other deals we would like to mention the following stake trading:

- The pivotal stake trading took place in the gas distribution companies in the definite regions of Georgia: JSC aGori Gasa - 93% stocks were traded, JSC aKutaisi Gasa - 54.95% stocks were traded, JSC aGruz Org Gasa -90.23% stocks were traded and JSC aRustavi Gasa - 59.33% stocks were traded. As we see, in these four gas companies the owner was changed and the most stakes was sold. Due to Georgian legislation, the new Owner at every company is obliged to do the Obligatory Tender Offer to the remainder shareholders within the 45 days from the deal. This Tender Offer should be published into the Legislative Journal aMatsnea and should be submitted to the registrar address to the every single shareholder. In the case of the Law violation, the new Owner will lost the right to use more than 50% stocks and every Shareholders meeting, done without Tender Offer is banned and abolished (should be if any) by the Legislation.

- Once more we would like to point (as in May) deal on JSC aTelliani Valleya. May be it looks a very strange, buta[bar] the same 538 400 number of stocks were traded again! But! In this month the new price was fixed (off course again off exchange deal, fixation).......0.19 Gel per stock! How interestinga[bar]price on this portion has increased at 19 times! Of course, no comments, details or other information was disclosed and announced (illogical and a very strange deal).......

- JSC aAqata - 19.88% stocks were traded at price of 65 496 Gel totally. Volatility of the price in that deal was high - price range was from 1 Gel to 1.6575 Gel.

July 2011

TRADES SUMMARY FOR July-2011 (table)

TRADING SYSTEM TRANSACTIONS SUMMARY FOR July-2011 (table)

July was the most active period in 2011. Approximately half of the year stock and money turnover took place in July.

- Mostly this turnover is the result of one single deal on JSC aUnited Telecommunication Company of Georgiaa. Via fixation and off exchange deal 42 848 963 stocks (41.5% from the authorized stock capital) was traded on the sum of 6 000 331 Gel. We would like to reminder our readers, that the similar stake was traded on December 15, 2006 (also fixation, off exchange deal), but price five years ago was 89 722 692 Gel. As we see, in 5 (five) year period after the privatization (company was in state ownership and was sold in 2006 [ETH][sup.3][ETH]3/4[ETH][acute accent]N) price of the company's stocks has slid almost in 15 times?! Once again, as in the previous examples, no details and comments on this deal are availablea[bar]...

- The second position due to the money volume in July was filled by JSC aPrinting Press (the continuous territory of the JSC aTBC Banka head office, Marjanishvili Street, former state Universal Magazine). 30 697 stocks of the company was traded by fixation, total volume was 2 495 269 Gel. The most blurry and fuzzy moment here is the price. This deal was concluded in three consecutive deals during the one day (based on statistics), off exchange and fixation way. The strange is price volatility. The same stock, at the same period of trading was sold from.... 1.30 Gel to...... 83.4879 Gel per one! As we see, just in one single day, the same stock was sold and purchased with price difference of 64.22 times from each other! We hope, that readers have no questions why investors in Georgia have no the will to buy/sell any stock locally. Imagine yourself in that deal. You have purchased the stocks (assets, product) for 83 Gel per one and suddenly got the news that this product (asset, stock) was purchased by other aInvestora for a[bar]. 1.30 Gel per one at the same time and date! (Average deal price was 81.287 Gel). We would like to mention, that the entire deal was only 25.68% from the total stocks outstanding of this company (do not think it was controlling stake or close to it....)

- Once again, more than 20 % stocks of JSC aAqata were traded.

August 2011

TRADES SUMMARY FOR August-2011 (table)

TRADING SYSTEM TRANSACTIONS SUMMARY FOR August-2011 (table)

Turnover of August was a very tiny. JSC aBank Libertya - 3 596 232 stocks were traded and the volume was equal to 95 059 Gel. The second stock due to its weight was JSC aBank of Georgiaa - 87 602 Gel.

September 2011

TRADES SUMMARY FOR September-2011 (table)

TRADING SYSTEM TRANSACTIONS SUMMARY FOR September-2011 (table)

September was similar to August - no any important deal and or turnover at all. From the stocks JSC aLiberty Banka was the leader - 1 052 864 stocks were traded. From the money view, the leader was JSC aBank of Georgiaa - 196 922 Gel.

The alone more or less important stake was traded at JSC aTbilSteelProducta - 9.77% of the stock outstanding.

October 2011

TRADES SUMMARY FOR October-2011 (table)

TRADING SYSTEM TRANSACTIONS SUMMARY FOR October-2011 (table)

In October, market was an active one. The most of traded stocks (via fixation) was done on stocks of JSC aUnited Telecommunication Companya - 4 218 948 stocks on the total volume of 717 221 Gel. The most stake trading was shown on the second and the third tier stocks: JSC aMeskhetia - 31.57% of the stocks outstanding; JSC :Vaziania - 14.87% stocks; JSC aGeorgian Silka - 41 954 stocks of 14.3% of the stocks outstanding and JSC aEquipment Productiona - 4.42% stocks.

November 2011

TRADES SUMMARY FOR November-2011 (table)

TRADING SYSTEM TRANSACTIONS SUMMARY FOR November-2011 (table)

In November, the most traded weight in capital was fixed at JSC aAndza 94a - 27.58% was traded and at JSC aKutaisi Lithopone Factorya - 23.40%. Here, the price of stocks was a little unclear one. Part of stocks was traded at price of 0.61 Gel per stock and part at price of 1.2892 Gel per stock...

The reasons of such differences are unknown...

December 2011

TRADES SUMMARY FOR December-2011 (table)

TRADING SYSTEM TRANSACTIONS SUMMARY FOR December-2011 (table)

Ending period of 2011 had faced upward trend in volume. The leader in stocks was JSC aBank Libertya - - 4 637 998 stocks. In money view, the leader was JSC aLiberty Consumera - 1 046 507 stocks were traded at price of 0.10 Gel on the entire sum of 95 660 Gel.

***

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For further Information please contact: "Georgian Investment Group+",

Tel: +995 599 51 10 57, +995 599 56 93 97, +995 599 16 11 09

http://www.investgroup.ge, mail: info@investgroup.ge
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