Bank of Georgia Holdings suffered steep falls on Tuesday on concerns over political uncertainty in its domestic market after a surprise upset in the parliamentary elections.

Shares in the group, which is the holding company of Bank of Georgia, were down 7.28% at 1,185p before the close in London after current President Mikheil Saakashvili admitted that the opposition, the Georgian Dream Party (GDP), had the majority of the vote.

Saakashvili, who leads the outgoing United National Movement (UNM), said in a statement: "After summarising the preliminary results of parliamentary elections, it is obvious that the coalition Georgian Dream has gained an advantage in these elections.

"It means that the parliamentary majority should form a new government and I, as the President, will contribute - in frames of the Constitution - to the process of launching Parliament's work so that it is able to elect its chairman and also to form a new government."

Analyst Sue Munden from Seymour Pierce said this afternoon that while the swift and supportive action of the President is impressive and his grace in defeat is good for internal political relationships, the impact will undoubtedly be felt before his term ends next year. He has led the country since 2003.

"The impact on Georgia in the short term will be a higher degree of risk and uncertainty until the new government is formed and makes its policies clear," Munden said.

Bank of Georgia's operations are expected to continue with business as usual but Seymour Pierce reckons the share price will continue to be weak "until there is clarity on the new government and its intentions".

Nevertheless, with the shares trading at just 5.3 times full-year earnings, the broker maintained its 'buy' rating on the stock.

"We understand that investors may want further reassurance but we believe that the shares at these price levels represent a buying opportunity."

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