BUX corrects up in lacklustre trade


The Budapest Stock Exchangeʼs main BUX index finished up 0.65% at 21,219.23 Monday after falling 1.05% Friday. It is up 27.57% from year-end, after losing 10.40% last year. Over last week, it dropped 1.18% after inching up 0.01% in the preceding week.

As if to bring home the message of fresh central bank statistics on Hungarian residents increasingly shunning the share market, the Budapest bourse struggled to inch up, correcting some of a big fall on Friday, on foreign funds uneasy positioning in view of another batch of dismal Japanese and Chinese industrial and investment data over the week-end, which may or may not influence policymakers of the US Fed when they decide on Thursday to tighten or stay put.

Although the prospect of a US rate hike has already been largely priced in on expectations that if should make emerging market assets less attractive, with the BUX down more than 7% from its year-to-date peak early in May, the real impact is yet to be seen, which explains low volumes and the reluctance to take longer risks in the marketplace these days, analysts say.

Border controls multiplying in Europe, after Hungary in Austria, Germany, Slovakia and the Czech Republic as well, to stem the flow of refugees, but on the longer-term possibly damaging trade and tourism, also weigh on sentiment.

On the domestic turf, a second reading of July data in Hungary on steeply slowing annual industrial and manufacturing production growth, complete with a monthly fall, suggested the economy could be slowing more than expected.

Other statistics out on Monday showed agricultural producer prices annual decline in the first half of this year significantly exceeded, on average, the fall in cost of sales, pointing to weak consumer demand and a growing difficulty in agriculture to produce value added, diminishing its ability to contribute to GDP.

On the bright side, Morgan Stanley said in a note that S&P would review Hungaryʼs sovereign credit rating on Friday with a possibility of upgrading the outlook to "positive" from "stable".

In a newspaper report on Monday, Hungarian oil and gas company MOL confirmed it would generally overhaul its investment policy and only launch investments that it can recoup, calculating with oil and gas prices at present and in the mid-term, after it announced last week that it had "significantly reduced" the geological potential of a licence it operates in the Kurdistan Region of Iraq.

KBC Equitas said in a note on Monday that the fair price of drugmaker Richter could leap about HUF 609 if one of its flagship product, Cariprazine, gets the green light in the US in the coming days.

OTP won 1.88% to HUF 5,522 on turnover of HUF 2.64 bln from a HUF 5.44 bln session total, less than two-thirds of the daily average this year.

MOL fell 1.13% to HUF 13,180 on turnover of HUF 1.90 bln.

Magyar Telekom rose 1.03% to HUF 394 on turnover of HUF 45m.

Richter advanced 0.76% to HUF 4,232 on turnover of HUF 794m.

The bourseʼs mid-cap BUMIX went out 0.14% lower at 1,623.36.

Elsewhere in the region, WIG 20 in Warsaw was down 0.29%, while Pragueʼs PX shed 0.03%.

Western Europeʼs major indices were mixed ahead of their close on Monday, with FTSE100 in London down 0.21%, DAX30 in Frankfurt up 0.49%, and CAC40 in Paris down 0.13%.

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