Budapest stocks outperform on Hungarian growth outlook
By Sandor Peto
BUDAPEST (Reuters) - Hungarian stocks firmed on Thursday, outperforming other Central European markets, as the country's economic performance encouraged some buying and the Ukrainian crisis did not escalate further.
Most regional assets were treading water as speculation of an early rate increase by the U.S. Federal Reserve weighed on risk appetite and flash manufacturing surveys in the euro zone, the region's main export market, were mixed.
The main index <.BUX> of the Budapest bourse which was closed on Wednesday due to a national holiday firmed 0.9 percent by 0755 GMT, led by OTP Bank and drug maker Richter , firms which have business in crisis-hit Russia and Ukraine.
OTP rose 1 percent to 4,127 forints and Richter gained 1.1 percent to 3,934 forints. Both stocks fell sharply in the past months due to Russia's conflict with Ukraine's Western-backed government and a new law in Budapest which imposes big costs on banks in Hungary.
Ukrainian forces continue to fight with Russian-backed rebels in eastern cities, but there is no fresh sign that the conflict with Russia could escalate and OTP stocks continue to recover from a 3,726-forint low hit earlier this month.
"Some investors may be giving slightly bigger weight to Hungarian stocks after the latest (Q2) GDP figures (showing robust 3.9 percent annual growth)," said Monika Kiss, analysts of brokerage Equilor in Budapest.
Austria's Raiffeisen , one of the biggest regional banks in Central and Eastern Europe, posted rising second-quarter profits despite a loss in Hungary, saying it expected "no significant impact" from western sanctions against Russia. Its stocks surged 5.2 percent in Vienna.
Hungarian government bond yields rose 1-2 basis points as investors were positioning ahead of auctions.
"Three-year yields are at 3.15 percent, 5-year at 3.47 and 10-year at 4.46, but I expect good auction results about 5 basis points lower," one Budapest-based fixed income trader said.
The auction results are due at 10:30 AM BST.
In Warsaw, the stocks of Netia , Poland's No.2 fixed-line operator, firmed 0.9 percent to 5.68 zloty, after its largest owner, billionaire Zbigniew Jakubas told Reuters that it should consider a tie-up with mobile rival Play.
In Prague, Miner NWR shed 2.8 percent to 3.5 Czech crowns, after the company, which is restructuring after a fall in coal prices, posted a 30.2 million euro net loss in the second quarter, slightly more than analysts had expected.
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**************** CEE MARKETS SNAPSHOT AT 0955 CET ************
************************* CURRENCIES *************************
Latest Previous Daily Change
bid close change in 2014
Czech crown 27.880 27.938 +0.21% -1.97%
Hungary forint 314.570 314.470 -0.03% -5.59%
Polish zloty 4.190 4.189 -0.03% -0.97%
Romanian leu 4.415 4.419 +0.09% +1.03%
Croatian kuna 7.627 7.620 -0.09% -0.11%
Serbian dinar 117.430 117.505 +0.06% -2.50%
Note: daily change calculated from previous close at 1800 CET
**************************** STOCKS **************************
Latest Previous Daily Change
close change in 2014
Prague <.PX> 975.85 976.52 -0.07% -1.12%
Budapest <.BUX> 17875.39 17715.56 +0.90% -2.50%
Warsaw <.WIG20> 2454.03 2451.06 +0.12% +2.07%
Bucharest <.BETI> 7075.25 7074.47 +0.01% +09.22%
Ljubljana <.SBITOP> 802.59 803.76 -0.15% +25.21%
Zagreb <.CRBEX> 1854.45 1854.76 -0.02% +4.16%
Sofia <.SOFIX> 546.03 546.63 -0.11% +11.12%
***************************** BONDS **************************
Yield Yield Spread Daily
(bid) change vs Bund change in
Czech Republic spread
2-year 0.161 -0.001 +017bps +0bps
5-year 0.523 -0.003 +030bps -1bps
10-year 1.348 -0.011 +034bps -3bps
Hungary
3-year 3.290 +0.020 +328bps +2bps
5-year 3.620 +0.000 +339bps -1bps
10-year 4.600 +0.010 +360bps -1bps
Poland
2-year 2.304 -0.010 +231bps -1bps
5-year 2.699 +0.000 +247bps -1bps
10-year 3.195 +0.000 +219bps -2bps
******************* FORWARD RATE AGREEMENTS ******************
3x6 6x9 9x12 3M interbank
Czech Rep 0.345 0.370 0.370 0.35
Hungary 2.250 2.330 2.410 2.15
Poland 2.280 2.160 2.165 2.65
Note: FRA quotes are for ask prices
**************************************************************
(Reporting by Reuters buros; Editing by Toby Chopra)
