Erste: Hungary bond yields likely to ease by year end

History

Hungarian bonds will probably rally, sending yields lower, until the end of this year because the government has committed to its budget-deficit targets, reports Bloomberg quoting Erste Group Bank AG.

“We view the government’s commitment to the deficit target a positive sign and forecast bond yields to ease from current levels until the year-end,” analysts at Erste including Zoltán Árokszállási in Budapest wrote in a research report today.

The government bonds maturing in June 2022, the most actively traded in Hungary in the last six months, rallied, pushing the yield eight basis points, or 0.08 percentage point, lower to 7.41% as of 10:00 a.m. in Budapest. The forint depreciated 0.1% to 272.1 per euro.

Hungary wants a budget shortfall of 2.5% of gross domestic product next year, after a gap of 4.3% in 2010 and a surplus this year because of the effective nationalization of private-pension funds and temporary taxes on energy, financial, retail and telecommunication industries.

The debt agency, known as ÁKK, may “soon” start using the funds acquired from the pension portfolios to buy back government bonds, “which could provide further support” to securities of “short” and “medium” maturities, Gyula Tóth, a Vienna-based analyst at UniCredit SpA, wrote in a research report today.

ADVERTISEMENT

Századvég raises GDP forecast to 7.8% Analysis

Századvég raises GDP forecast to 7.8%

Opposition parties to begin PM candidate primaries Elections

Opposition parties to begin PM candidate primaries

New editor-in-chief at Betone Studio Appointments

New editor-in-chief at Betone Studio

Budapest leaders make public transport free for under-14s City

Budapest leaders make public transport free for under-14s

SUPPORT THE BUDAPEST BUSINESS JOURNAL

Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.