Q3 reports expected to push up share prices temporarily
The publication of third-quarter reports by Hungary's listed companies are expected to prompt a short-term buying wave of shares, but share prices will start to rise steadily only in the coming year, according to analysts at OTP Bank.
Most companies whose shares are traded on the Budapest Stock Exchange (BÉT) will publish their Q3 reports in mid-November. The analysts said in a monthly report that they expected to see a steady rise in share prices only in 2007, when investors regain their confidence in Hungary's economic policy and the trend in the region improves. At the same time, however, the economy will show the negative effects of slower growth and a fall in state spending, they added.
Hungary's political situation is expected to stabilise, the general government deficit will narrow and the country's financing requirement will be reduced, according to the analysts. Hungary's risk premium will become smaller. But this will be countered by a growing risk premium on global markets. Long-term yields will fall significantly in the coming twelve months, according to the report, therefore the analysts recommended these terms to investors. (Mti-Eco)
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