The Georgian government’s measures to stabilize the situation following the November 7 unrest - when riot police broke up a demonstration - have allayed foreign investors’ fears about Georgia, some senior Georgian business executives have said.

“Bank of Georgia shares on the London Stock Exchange declined in October by 15% and it was a clear indicator of investor fears [vis-a-vis developments in Georgia],” Lado Gurgenidze, chairman of the Bank of Georgia’s supervisory board, said on November 10.

“But on November 7, 8, 9, prices stabilized and then started to even slightly increase, which means that the trend has significantly changed.”

Gurgenidze was speaking at a meeting between President Saakashvili and a group of leading Georgian businesspeople in Tbilisi on November 10.

The Bank of Georgia has been listed on the London Stock Exchange in the form of global depositary receipts (GDR) since November 2006. The bank said on November 10 that its GDRs rose by 0.8% on the exchange to USD 33.2 last week, with a total of 530,700 GDRs traded.

“We manage several investment funds – with about GEL 100 million – to diversify our investments in various sectors, including agro-business and retail,” he added. “One foreign investor transferred USD 4.8 million to one of our investment funds on November 8. So we have definitely seen that foreign investors positively perceive the stabilization of the situation in the country.”
 
In response, President Saakashvili told the Bank of Georgia chief executive that uncertainty about future developments in Georgia had caused the initial decline in the bank’s share price.

“Your shares declined at first for a simple reason: expectations were catastrophic after those people gathered on Rustaveli Avenue [outside the parliament] with their slogans and demands,” Saakashvili said. “You will see the price of your [the bank’s] shares double after January 5 [the date for the presidential polls].”

Meanwhile, Standard and Poor’s rating agency said recent developments in Georgia would have no near-term effect on its 'B+/B' ratings or positive outlook on the sovereign [rating], the Thomson Financial reported.

Standard and Poor’s, however, also warned that the current state of emergency was accompanied by the worrying suggestion that the government would take heavy-handed measures to quash the opposition, which could put pressure on the current positive outlook.