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BUX falls in global gloom

Telco

The Budapest Stock Exchangeʼs main BUX index finished down 0.79% at 20,666.72 Monday after rising 1.07% Friday. It is up 24.24% from year-end, after losing 10.40% last year. Over last week it fell 1.36% after raking up 0.17% in the previous week.

The Budapest bourse slid in narrow volumes while eurozone peers lost more than half of their Friday gains, suffering the continuing impact of the Volkswagen scandal, volatile row material and oil prices hitting related shares, regional elections in Spain giving Catalan separatists an as yet unclear mandate to push for independence, mixed US data that, failed, however, to distance the threat of a US rate hike, and comments over the weekend from the head of the IMF who said the IMF was likely to revise downwards its estimates for global economic growth due to slower expansion in emerging economies.

Volkswagen plants produce a part of the exports of Poland, the Czech Republic, Slovakia and Hungary as well, with Audi, a member of the Volkswagen group, a flagship in Hungaryʼs exports. Automakers provide 12% of Hungaryʼs export, and 21% with Audiʼs engine manufacturing included. Emerging Europe provides 26.2% of Volkswagenʼs output in Europe and 12.8% globally, SocGen remarked on Monday.

Furthermore, it would cost the Hungarian economy billions of euros if border controls were reinstalled along many more border sections within the EU Schengen zone in response to the migration crisis, Hungaryʼs foreign minister repeatedly told the press on Monday.

Multinational companies are major contributors to Hungaryʼs economic output, and these companies operate on tight schedules both in importing basic materials and exporting their products, so delays would seriously affect them, the minister said.

Meanwhile, local economic think tank GKI Gazdasagkutato published new forecasts on Sunday, projecting 2.7% GDP growth for Hungary this year and 2.0% next, after 3.6% last year. It said domestic demand should increase 1% this year and 0.3% next year, with investments stagnating this year and falling 5% next year, and exports expanding 8% this year, but slowing to 5.5% next year, mainly on fewer EU funds and global risks that limit export markets.

OTP lost 0.71% to HUF 5,332 on turnover of HUF 1.10 bln from a HUF 3.63 bln session total, two-fifth of the daily average this year.

MOL fell 2.43% to HUF 12,030 on turnover of HUF 2.06 bln.

Magyar Telekom ended flat at HUF 386 on turnover of HUF 103 mln.

Richter advanced 0.23% to HUF 4,440 on turnover of HUF 335 mln.

The bourseʼs mid-cap BUMIX went out 0.11% lower at 1,599.74.

Elsewhere in the region, WIG 20 in Warsaw was down 1.66%. Prague was closed for a public holiday.

Western Europeʼs major indices were all down ahead of their close on Monday, FTSE100 in London 2.25%, DAX30 in Frankfurt 1.95%, and CAC40 in Paris 2.68%.

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