BUX corrects up

Telco

The Budapest Stock Exchangeʼs main BUX index finished up 1.29% at 20,932.82 Tuesday after falling 0.79% Monday. It is up 25.84% from year-end, after losing 10.40% last year.

Starting with a fall, the Budapest bourse ended the day on a rising leg of the roller-coaster it has ridden since early August as most Western markets corrected slightly up in yo-yo like trade on Tuesday, from time to time re-testing the yearʼs lows on multiplying global uncertainties. These were exacerbated by contradicting comments from US Fed decisionmakers concerning the suitable deadline of a rate hike. As a result, analystsʼ predictions varied between October to next March on Tuesday, a time frame too wide for investors to price.

The BUX finished down 8.39% from this years peak at 22.850.53 on May 6. The DAX in Frankfurt is down by around a quarter from its all-time high in April.

The Budapest bourse was supported by news of a large loan from the European Investment Bank (EIB) and a confirmation by the government that the European Commission has lifted a suspension of funding for Hungary introduced in April. Renewed payments could help wind down by almost a half that part of the above-target budget deficit that was directly incurred by the delays because the government had pre-payed beneficiaries. Hungaryʼs budget deficit reached 103% of the annual target by end-August.

Clouds, however, also gathered as the national economy minister said on public radio on Tuesday that between 2m and 2.5m of the 11m Volkswagen group engines rigged to pass emissions tests were made at the Audi plant in Hungary. A drop in European car sales could have a 0.3-0.6% impact on the performance of the Hungarian economy, the minister said earlier.

He also said Hungaryʼs government wants to reduce the economyʼs dependence on the car business, with automotive industry accounting for 22% of industrial output and 13% of Hungaryʼs exports, acting to expand other branches of industry, such as the pharmaceutical, medical equipment and machinery parts sectors.

OTP won 2.74% to HUF 5,478 on turnover of HUF 3.99 bln from a preliminary HUF 8.31 bln session total, less than a tenth short of the daily average this year.

MOL gained 1.08% to HUF 12,160 on turnover of HUF 3.20 bln.

Magyar Telekom ended flat at HUF 386 on turnover of HUF 119 mln.

Richter advanced 0.34% to HUF 4,455 on turnover of HUF 947 mln.

The bourseʼs mid-cap BUMIX went out 1.03% higher at 1,616.22.

Elsewhere in the region, WIG 20 in Warsaw was down 0.80%, while Pragueʼs PX fell 0.31%.

Western Europeʼs major indices were mixed ahead of their close on Tuesday, with FTSE100 in London down 0.61%, DAX30 in Frankfurt up 0.14%, and CAC40 in Paris up 0.13%.

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