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BUX down in low volume trade

Telco

The Budapest Stock Exchangeʼs main BUX index finished down 0.55% at 21,753.36 Monday after falling 0.60% Friday. It is up 30.78% from year-end, after losing 10.40% last year. Over last week, it went up 0.30% after rising 1.57% the preceding week.

Still one of the best performing markets in the world this year, the Budapest parquet took an inevitable, but relatively mild hit in low volume trade on heightened uncertainty after Sundayʼs Greek referendum which left Greece without a bail-out programme and confronted it with an uphill battle to secure another one.

The dayʼs loser was OTP Bank in line with the European trend which is usual at similar junctions, while MOL was up on fuel price rises, and Magyar Telekom, too, on a positive correction after recent falls.

The uncertainty fuels risk aversion but no panic. In Central Europe the regional price fall was moderate as Sundayʼs referendum outcome was not entirely surprising, and in the no manʼs land between the Greek rejection of extending its latest three-year programme that expired end-June and the dim prospect of receiving any international help later, investors refrained from making very sharp gestures at this early stage of the new situation, especially ahead of a German-French summit Monday evening which could set the tone for the foreseeable future. The Greek story unfolding this way or another, the direct economic or financial fallout in Hungary should anyway be minimal, analysts say.

An indirect effect causing some market concern could, however, be that the Greek "no" to Europe may refuel the Hungarian governmentʼs disposition to "unorthodox" policies which have dented quoted companiesʼ profits and increased inequality. The present situation in Greece vindicates "Hungaryʼs standpoint" in the last few years, parliamentary chief whip of the governing Fidesz party has already told parliament recently. But it must also be noted that Hungaryʼs debt service history is flawless, with no Hungarian government ever going as far as even just mentioning the possibility of non-repayment of a debt, analysts add.

OTP lost 2.06% to HUF 5,510 on turnover of HUF 1.98 bln from a HUF 2.81 bln session total, 28% of the daily average this year.

MOL rose 0.24% to HUF 14,600 on turnover of HUF 356m.

Magyar Telekom gained 1.01% to HUF 399 on turnover of HUF 95m.

Richter retreated 0.17% to HUF 4,165 on turnover of HUF 321m.

The bourseʼs mid-cap BUMIX went out 0.37% higher at 1,642.07.

Elsewhere in the region, WIG 20 in Warsaw was down 0.27%. Prague was closed for a public holiday.

Western Europeʼs major indices were all down ahead of their close Monday, FTSE100 in London 0.70%, DAX30 in Frankfurt 1.35%, and CAC40 in Paris 1.83%.


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