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BUX down again on EU-Russia standoff

Telco

The Budapest Stock Exchange's main BUX index finished down 1.23% at a six-week low of 17,619.51 Friday, after plunging 1.40% Thursday. It is down 5.09% from the end of last year, after it rose 2.15% in 2013.

he Budapest parquet fell for a fourth consecutive day. Only OTP scraped together some adjustment intraday after it reached a six-week low Thursday, just to lose it to another six-week trough in final trades.

Broadly, the BUX followed most emerging markets this week, hit by an equities sell-off mainly by foreign investors in view of the dollar's and top-rated sovereigns' strength anticipating a US rate hike early next year.

In Hungary, new legislation detailing the rules how banks should refund their household debtors for practices deemed unfair, and plans for still another law putting banks activities on a "fair basis" kept up the pressure.

Hungary's central bank pledged this week to use its reserves to help banks finance the loan refunds and a planned conversion of forex loans into forint debts next year. This might help avoid harming financial stability, but the drop in reserves may still worry foreign investors, analysts said.

Another negative is that neighbouring Romania, where OTP also does business, is also discussing proposals to help borrowers at the cost of banks, although analysts play it down as pre-presidential-election "noise".

On Friday, the EU-Russia tit-for-tat sanctions war seemed set to continue, disappointing earlier hopes. On Thursday, Hungary's central bank confirmed the possibility of economic slowdown because of the conflict. Meanwhile, Hungary got a thinly veiled rapping in Brussels for suspending gas re-exports to Ukraine.

OTP fell 0.28% to HUF 3,989 on turnover of HUF 11.19 bln from a HUF 14.04 bln session total, about 70% above the daily average this year.

MOL fell 1.19% to HUF 12,000 on turnover of HUF 796 mln.

Magyar Telekom dropped 1.12% to HUF 353 on turnover of HUF 542 mln.

Richter retreated 2.64% to HUF 3,906 on turnover of HUF 1.24 bln.

The bourse's mid-cap BUMIX went out 0.72% lower at 1,493.42

For the week, the BUX lost 4.31% after falling 1.49% the previous week.

OTP dove 9.44% after gaining 0.57% last week

MOL dropped 3.38% after rising 1.39% the previous week.

Magyar Telekom advanced 0.57% after plunging 5.90% last week.

Richter fell 1.86% after losing 5.13% over the previous week.

Elsewhere in the region, Warsaw's WIG20 was up 0.71%, while Prague's PX lost 0.19%.

Western Europe's major indices were all up ahead of their close Friday, FTSE-100 in London 0.35%, Frankfurt's DAX30 0.02%, and CAC40 in Paris 1.23%.

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