BUX down on debtor relief, Ukraine

Telco

The Budapest Stock Exchange's main BUX index finished down 0.14% at 18,749.34 Thursday -- but up from an intraday low of 18,607.90 -- after rising 0.26% Wednesday. It is up 1.00% from the end of last year, after it rose 2.15% in 2013.

Despite Western markets up, and after two days of gains and some initial advances Thursday morning, the Budapest parquet felt that "sinking feeling" which saddles betting whenever the rift between the government and the banks widens some more. The latest: the parliamentary leader of the ruling Fidesz said in an interview late Wednesday that the Hungarian government does not have to consider the burden-bearing capacity of local banks when they incur heavy losses over their forint and forex receivables (as a result of the government's debtor relief programme) because this is about executing a court ruling.

In an apparent answer, the general secretary of the Hungarian Banking Association wrote in an open letter on Thursday that the over-burdened financial system can not serve Hungary's development adequately, and a healthy banking sector which is "not bled dry" is a national interest.

OTP, however, closed up as it is seen the best positioned bank to survive the debtor relief programme.

End of trade buying into the day's losses improved the general picture, too.

Magyar Telekom remained down as speculation on a buy-out by its parent, Deutsche Telekom, fizzles out.

Other shares felt also the new twists and turns of the crisis in and around Ukraine, among them some alleged war threats against several Eastern European countries attributed to the Russian president by Suddeutsche Zeitung.

An offer of Gazprom to ship half to one billion cbm extra gas to Hungary soon as part of its reserve strategy suggested to analysts that Gazprom is anticipating a "gas war" with Ukraine in the winter.

EBRD in London upped its GDP forecasts for Hungary but cut back those for most other countries in the region on the Ukraine crisis, and emphasised that even the pace of Hungary's economy is based on several temporary factors, including the debtor relief scheme, "the price of which will be paid by the banks".

OTP won 0.54% to HUF 4,459 on turnover of HUF 2.11 bln from a HUF 6.00 bln session total, little more than two-thirds of the daily average this year.

MOL fell 0.28% to HUF 12,460 on turnover of HUF 978m.

Magyar Telekom dropped 1.85% to HUF 372 on turnover of HUF 2.24 bln.

Richter advanced 0.20% to HUF 4,093 on turnover of HUF 438m.

The bourse's mid-cap BUMIX went out 0.97% lower at 1,494.21.

Elsewhere in the region, Warsaw's WIG20 was down 0.48%, while Prague's PX rose 1.17%.

Western Europe's major indices were all up ahead of their close Thursday, FTSE-100 in London 0.53%, Frankfurt's DAX30 1.26%, and CAC40 in Paris 0.61%.

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