BUX corrects down in thin trade

Telco

The Budapest Stock Exchangeʼs main BUX index finished down 0.28% at 22,553.44 Tuesday after rising 0.12% Monday. It is up 35.59% from year-end, after losing 10.40% last year.

With no new domestic stories stirring the market and eurozone peers putting in lacklustre, mixed performance on disappointing results from some bellwethers like French bank Credit Agricole or German carmaker BMW while weak oil prices weighed on energy stocks, the few investors left over in the Budapest bourse amidst the summer holiday season had the time to brood on recent developments.

An unlikely global leader year-to-date, the BUX may be ripe for some correction, analysts add.

The sharp decline in Hungaryʼs manufacturing PMI in July, especially in major sub-components such as production, new orders, exports and imports points to weakening growth prospects for the country, Citigroup said in a note on Tuesday. Citi expects GDP growth to slow to an annual 2.7% in the second half of this year from 3.5% in the first quarter.

Published on Monday, Hungarian manufacturing PMI fell to 50 points in July, indicating stagnation from the previous month. It was the lowest monthly index in two years.

Earlier, surveys showed EU support funds flows into Hungary slowing to a trickle recently, and data attested to export growth sharply decelerating and imports starting to fall.

The weak data, however, are unlikely to lead to more monetary easing, analysts said, reminding that the Hungarian central bank announced an end to its rate-cutting cycle late July.

Oil and gas company MOLʼs partner in the Shaikan field in Iraqi Kurdistan said that from September the Kurdistan Regional Government would accelerate to a monthly basis the allocation of revenue portions from its direct crude oil sales to the producing international oil companies, and as export was expected to rise early next year, the regional government envisaged making additional revenue available to the companies.

Earlier, MOLʼs Croatian operation INA said operating profit increased an annual 33% in the first half of this year.

But these news failed to invigorate MOLʼs share price as it announced another batch of fuel price reduction on Tuesday due to Brentʼs recent falls.

MOL is to announce second-quarter results early Wednesday. Market consensus expects healthy growth.

Magyar Telekom will follow late Wednesday. Analysts project annual profit growth to have slowed from the first quarter, but also expect the first dividend in three years from Hungaryʼs largest telco by market share.

OTP ended flat at HUF 5,750 on turnover of HUF 1.16 bln from a HUF 3.66 bln session total, less than two-fifths of the daily average this year.

MOL lost 0.61 % to HUF 14,635 on turnover of HUF 1.44 bln.

Magyar Telekom dropped 0.49% to HUF 409 on turnover of HUF 472m.

Richter retreated 0.22% to HUF 4,490 on turnover of HUF 525m.

The bourseʼs mid-cap BUMIX went out 0.09% lower at 1,681.53.

Elsewhere in the region, WIG 20 in Warsaw was down 0.10%, while Pragueʼs PX decreased by 0.41%.

Western Europeʼs major indices were mixed ahead of their close on Tuesday, with FTSE100 in London down 0.11%, DAX30 in Frankfurt up 0.19%, and CAC40 in Paris down 0.21%.


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