BUX rides improved global mood

With tailwind from Western markets, the BUX stopped just shy of a fifth nearly four-and-a-half-year high within two weeks. Hopes vested in an expected further easing by the ECB on Thursday and in further non-conventional moves by the National Bank of Hungary (MNB) to follow suite on December 15 balanced the worsening economic outlook and the mixed news of the day.

Industrial producer prices in Hungary fell in October for a third month in annual comparison, and were down for a fourth month on a monthly basis, official statistics out on Monday showed.

Banksʼ corporate credit stock, including bonds, grew 2.4% by the end of October from end-September, after falling 0.6% in September, according to data published on Monday by the National Bank of Hungary. However, it was down 6.3% from the end of last year, down 5.6% from a year ago, down 9.4% from two years ago, down 9.7% from three years ago, down 18.2% from four years ago, and down 15.6% from five years ago. Over last year, the stock grew 7.4%, after falling 3.5% in 2013, and declining 10.3% in 2012.

Meanwhile, outstanding bank loans to households fell 0.5% in October from end-September, were down 10.8% from the end of last year, down 11.5% from a year ago, and down 15.1% from two years ago, partly also reflecting the effect of the conversion of forex mortgages into forint debts early this year.

Also on Monday, the European Commission has registered a European Citizens Initiative (ECI) inviting the Commission to propose to trigger Article 7 of the Treaty with a view to suspend Hungaryʼs voting rights for alleged breaches of the EU’s fundamental values in handling the refugee crisis. The registration starts a one-year process of collection of signatures in support of the ECI. The Commission added that its decision to register concerns only the legal admissibility of the proposal, and has not analysed the substance of the initiative at this stage.

Pharma company Richter and OTP Bank were again in vogue. Richter rose to an all-time high on continuing pricing-in of its outlook in the US following a September FDA approval of one of its drugs. OTP, securely scaling the HUF 6,000 technical barrier, surged on the prospect of better government-banks relationships following a government bill introduced last week that aims to improve the conditions of a prospective cut in the special bank levy, although it seems to be rather neutral for OTP itself, compared to calculations based on the previous legislation in June on the reduction of the levy. At its intraday peak, OTP was up 2.66%, to slow down in final trades only.

OTP won 1.00% to HUF 6,070 on turnover of HUF 12.05 bln from a preliminary HUF 20.46 bln session total, more than twice the daily average this year.

MOL fell 1.46% to HUF 13,500 on turnover of HUF 1.97 bln.

Magyar Telekom slid 1.23% to HUF 402 on turnover of HUF 364 mln.

Richter advanced 1.51% to HUF 5,590 on turnover of HUF 5.96 bln.

The bourseʼs mid-cap BUMIX went out 0.52% lower at 1,626.93.

Elsewhere in the region, WIG 20 in Warsaw was down 0.16%, while Pragueʼs PX lost 0.33%.

Western Europeʼs major indices were all up ahead of their close on Monday, FTSE100 in London 0.07%, DAX30 in Frankfurt 0.99%, and CAC40 in Paris 0.82%.