BUX down in low volume trade
The Budapest Stock Exchangeʼs main BUX index finished down 1.22% at 23,455.91 Tuesday after rising 0.34% Monday. It is up 41.01% from year-end, after losing 10.40% last year.
Catching up with Mondayʼs deep fall in Western markets which struggled to remain above the waterline on Tuesday, the Budapest parquet turned south in slow, pre-Christmas trade with a tendency to realize profits from spectacular year-to-date rises, which made BUX one of the world champions this year despite multiplying economic woes in Hungary.
Latest calculations show EU funds other than agricultural payments should fall below 2.5% of the probably shrinking Hungarian GDP next year from around 6% this year, to deal a heavy blow to tepid investments.
Hungaryʼs cashflow-based general government deficit, excluding local councils, reached 108.8% of the full-year target by end-November, a second reading of data showed on Tuesday. The deficit grew mainly on pre-financing EU projects in the hope to cash in on EU funds later.
Another factor in Tuesdayʼs retreat could have been an agreement to raise the minimum wage next year by 5.7% to a monthly gross of HUF 111,000 in nominal terms, which is projected to bring about a 5.6% real rise. Low wages are still too low to stimulate consumption growth, while the equal amount of payroll tax rises in the wake of the wage rise might further sap companiesʼ ability to perform, analysts say.
Loser of the day, oil company MOL was dragged down by Brent oil prices that plunged to a more than 11-year low on Monday. Cheap fuel augurs more deflation pressure, but the last policy meeting of Hungaryʼs central bank pointed to less zeal to continue unconventional easing with the speed projected earlier, in views of the Fed rate hike cycle that started last week.
OTP slipped 1.17% to HUF 5,900 on turnover of HUF 2.53 bln from a preliminary HUF 4.98 bln session total, little above half the daily average this year.
MOL plunged 2.08% to HUF 13,860 on turnover of HUF 885 mln.
Magyar Telekom shed 0.50% to HUF 400 on turnover of HUF 141 mln.
Richter retreated 0.92% to HUF 5,400 on turnover of HUF 1.31 bln.
The bourseʼs mid-cap BUMIX went out 0.16% higher at 1,613.92.
Elsewhere in the region, WIG 20 in Warsaw was up 0.50%, while Pragueʼs PX garnered 0.15%.
Western Europeʼs major indices were all up ahead of their close on Tuesday, FTSE100 in London 0.80%, DAX30 in Frankfurt 0.06%, and CAC40 in Paris 0.23%.
ADVERTISEMENT
Mapei Targets 6% Higher Revenue This Year
Parliament Negates Mandatory Membership in MOK
Number of Residential Developments in Cities Falls 9%
Veronika Spanarova Wins Expat CEO of the Year Award 2023
SUPPORT THE BUDAPEST BUSINESS JOURNAL
Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.
