Underpinned by the Hungarian central bankʼs base rate cut earlier in the week, outperforming most emerging markets as it ended still up on the week, the Hungarian parquet also withdrew from Thursdayʼs highs as a strong dollar lured investors away and worries about stability in the Middle East depressed investor sentiment.
Money continued to flow out of emerging market-themed funds, according to weekly figures from fund flow trackers EPFR Global.
Locally, the fallback was led by OTP after media reports that its bid failed for Sloveniaʼs second-largest bank, Nova KBM.
Also on Friday Hungarian fund managers Concorde downgraded OTP to underweight from overweight as it slashed its annual profit forecast for Hungaryʼs largest bank to HUF 88 bln from HUF 108 bln previously due to expected further losses in Ukraine, and saw larger than expected contributions by OTP to client insurance funds in the wake of the recent brokerage failures in Hungary. It left OTPʼs year-end target price unchanged at HUF 4,677.
Aspects of the OTP downgrade reminded investors of Richterʼs similar exposure to Russian and Ukrainian markets.
Some loss of confidence could also be felt in the market after the parliamentary opposition accused the government of insider trading when it turned out that the prime minister ordered ministries and other public entities to withdraw investments from brokerages after the failure of one brokerage, Buda-Cash, at the end of February, but before the bankruptcy announcement two weeks later of another, Quaestor, without warning private investors. Opposition also says that investing state money with private brokerages is against the law to start with.
OTP fell 1.85% to HUF 5,300 on turnover of HUF 6.88 bln from a HUF 9.73 bln session total, a hair above the daily average this year. OTP reached a close to four-year high on Wednesday at HUF 5,440.
MOL dropped 0.52% to HUF 12,430 on turnover of HUF 864 mln.
Magyar Telekom gained 0.48% to HUF 417, a 23-month high, on turnover of HUF 1.23 bln.
Richter retreated 1.69% to HUF 3,952 on turnover of HUF 711 mln.
The bourseʼs mid-cap BUMIX went out 0.59% lower at 1,533.26.
Over the week, the BUX added 3.84% after rising 3.00% in the previous week.
OTP gathered 3.92% after surging 8.51% last week.
MOL rose 6.19% after dipping 2.17% the previous week.
Magyar Telekom soared 8.03% after a plus of 1.31% last week.
Richter advanced 0.05% after gaining 2.36% over the previous week.
The BUMIX garnered 0.59% after a rise of 0.94% last week.
Elsewhere in the region, the WIG 20 in Warsaw was down 0.14%, while Pragueʼs PX fell 0.80%. Western Europeʼs major indices were mixed ahead of their close Friday, with FTSE-100 in London down 0.73%, DAX30 in Frankfurt up 0.02%, and CAC40 in Paris up 0.37%.
