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BUX a hair down in thin trade

Telco

The Budapest Stock Exchangeʼs main BUX index finished down 0.01% at 21,850,62 Monday after falling 0.70% Friday. Over last week, it dipped 0.41% after soaring 5.52% in the preceding week. It is up 31.36% from year-end, after losing 10.40% last year.

The Budapest bourse rose moderately until the final quarter of an hour of trade in a start-of-week repositioning that followed general profit taking on Friday, while Western markets fared mixed on dismal Chinese data and the results disappointment from Morgan Stanley, the latest in a row of weak US quarterly bank figures.

Mood in Budapest was underpinned by the announcement that Audi, a member of the Volkswagen group, was going to invest HUF 32 bln at its plant in Hungary with a government support of HUF 6 bln in subsidy. Although not directly related to any shares in the BUX, the news helped allay earlier fears that Volkswagenʼs emission-rigging scandal could damage Hungaryʼs economy through its mostly German-held automotive industry and exports.

End of trade caution wiped out BUXʼs gains of around 0.6% earlier in trade, but, following last weekʼs profit taking, MOL shone again on recent positive developments in its upstream business.

Volumes also fell sharply from Friday contributing to volatility within the day, and suggesting that ratcheting quotations up is rather for the brave in these days of global uncertainty about the intentions of the US Fed, and multiplying signs of a slowdown in the euro zone and Hungary as well.

A professional survey on employment out on Monday reminded investors to on-going narrow straits in the Hungarian economy. In the third quarter, 29% more vacancies were advertised at companies compared to a year ago, but the number of job seekers increased only 16%. The wide mismatch between both the numbers and skills required and offered illustrates the impact of low wages and emigration of hundreds of thousands of working-age Hungarians to Western Europe, which, together with traditionally low labour participation within a population shrinking due to natural causes as well, should cap Hungaryʼs potential economic growth, as Standard & Poorʼs pointed out in its latest assessment in July as part of the explanation why it refrained to upgrade Hungary to investment level.

OTP lost 0.97% to HUF 5,615 on turnover of HUF 1.58 bln from a preliminary HUF 4.71 bln session total, about half the daily average this year.

MOL gained 1.81% to HUF 13,250 on turnover of HUF 900m.

Magyar Telekom ended flat at HUF 386 on turnover of HUF 169m.

Richter retreated 0.64% to HUF 4,670 on turnover of HUF 1.95 bln.

The bourseʼs mid-cap BUMIX went out 0.49% higher at 1,616.89.

Elsewhere in the region, WIG 20 in Warsaw was down 0.61%, while Pragueʼs PX ended flat in percentage terms, with a gain of 0.03 points.

Western Europeʼs major indices were mixed ahead of their close on Monday, with FTSE100 in London down 0.53%, DAX30 in Frankfurt up 0.70%, and CAC40 in Paris up 0.02%.

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