BUX down on global woes

Telco

The Budapest Stock Exchange's main BUX index finished down 0.42% at 17,310.39 Monday, after falling also 0.42% Friday. It is down 6.75% from the end of last year, after it rose 2.15% in 2013. Over last week, the BUX was up 1.51% after falling 1.13% the previous week.

The Budapest parquet continued down after gloom engulfed global markets at the sight of Japan sinking into recession in the third quarter, and did not recover even after Western markets turned positive in the afternoon on a hint of the ECB's president at the possibility of buying government bonds.

Locally, fears for banks' outlook were maintained by a government bill submitted to parliament Monday that would limit the interest rates banks could charge on mortgages converted from foreign currencies into forint debts to the interest of the original loan, although analysts argue that the bill eliminates the last uncertainty in the process of debtors relief mandated by legislation.

OTP fell, regardless of a hefty upgrade of its target price by Barclays to HUF 4,620 from HUF 4,230 following OTP's results on Friday.

Falling oil prices pressured MOL while French utility GDF Suez announced plans to sell its Hungarian power trading business to Hungarian energy trader MET Group, 40% owned by MOL, the latest development in a process of foreign energy firms, including Germany's E.ON, scaling back their operations in Hungary since the government has cut household energy bills and increased the state's influence in the sector. MOL is 24.7% owned by the state.

In light of stronger-than-expected third quarter growth, Hungary's central bank will probably keep interest rates on hold until it encounters weakness in economic data,

Commerzbank said in a note Monday. However, Commerzbank expects the government's assumption that deflation, driven by commodity prices, is temporary, and will pick up in 2015 to be challenged as early as in the first quarter of next year.

OTP lost 0.35% to HUF 3,996 on turnover of HUF 1.41 bln from a HUF 3.15 bln (8.01) session total, less than two-fifths of the daily average this year.

MOL fell 0.17% to HUF 12,050 on turnover of HUF 432m.

Magyar Telekom plunged 1.72% to HUF 342 on turnover of HUF 426m.

Richter retreated 0.38% to HUF 3,696 on turnover of HUF 726m.

The bourse's mid-cap BUMIX went out 0.76% higher at 1,449.23.

Elsewhere in the region, Warsaw's WIG20 was up 0.20%. Prague was closed because of a public holiday. Western Europe's major indices were all up ahead of their close Monday, FTSE-100 in London 0.23%, DAX30 in Frankfurt 0.60%, and CAC40 in Paris 0.55%.

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