BUX follows European peers down the slope


The Budapest Stock Exchangeʼs main BUX index finished down 1.15% at 21,335.79 Friday after soaring 1.94% Thursday. It is up 28.27% from year-end, after losing 10.40% last year.

In a severe hangover after the European Central Bank (ECB) speeded markets up on Thursday by emphasizing its readiness to do "everything" within its mandate to spur growth and inflation against multiplying odds, but actually did nothing serious, markets in Europe fell in quick profit taking, with Budapest being no exception, as old fears for Chinaʼs economic growth and uncertainty about the still strong possibility of a US rate hike on September 17 returned in force.

Mixed U.S. payroll data in the afternoon just reinforced volatility.

On the domestic turf, official statistics confirmed in a second reading the sharp slowdown of GDP-growth in Hungary in the second quarter, mainly on falling agricultural output, slowing growth in industry and exports, fewer EU funding and narrowing resources for household consumption.

However, perceptions that Central European economies are relatively well cushioned against repercussions from either China or the US helped BUX outperform compared to Western peers.

But investors were reminded of the growing government meddling in economy by an announcement that Hungaryʼs recently nationalized gas distributor, Főgáz, has signed a deal to buy the local natural gas retail company of GDF

International. Rampant nationalization through government buy-out of the energy retail sector follows years of squeezing out foreign firms by mandatory household energy price cuts and delays in opening alternative gas pipelines providing cheaper resources, analysts add.

Mass breakouts of refugees attempting a journey to Germany on foot from a mainline train station in western Hungary surrounded by police, while Hungaryʼs parliament adopted laws to tighten controls and threatening illegal immigrants with prison terms, highlighted the collision course of Hungary with its EU partners on how to handle the migrant crisis. A first sign of possible economic fallout also appeared on Friday when tourist agencies began to announce massive cancellations of incoming tours due to the local tension and repeated disruptions in railway traffic between Budapest and the Austrian border.

OTP lost 1.27% to HUF 5,460 on turnover of HUF 2.13 bln from a HUF 3.62 bln session total, only more than a third of the daily average this year. MOL fell 1.80% to HUF 13,650 on turnover of HUF 562 mln. Magyar Telekom dropped 0.76% to HUF 394 on turnover of HUF 83 mln. Richter retreated 0.70% to HUF 4,230 on turnover of HUF 816 mln.

The bourseʼs mid-cap BUMIX went out 0.21% higher at 1,640.02.

Over the week, the BUX was up 0.01% after plunging 3.55% in the previous week.

OTP rose 2.34% after dropping 5.32% last week. MOL dipped 2.40% after decreasing 3.52% the preceding week. Magyar Telekom was off 0.25% after easing 0.50% last week. Richter shed 0.24% after dipping 2.64% over the previous week.

The BUMIX sank 0.45% after falling 2.39% over last week.

Elsewhere in the region, WIG 20 in Warsaw was down 0.40%, while Pragueʼs PX let go 1.15%.

Western Europeʼs major indices were all down ahead of their close on Friday, FTSE100 in London 2.32%, DAX30 in Frankfurt 2.69%, and CAC40 in Paris 2.81%.

MET Group Wins TXF 'Commodity Financing Deal of the Year' Energy Trade

MET Group Wins TXF 'Commodity Financing Deal of the Year'

Hungary Opposes Freeing up Further EUR 6.5 bln From EPF Int’l Relations

Hungary Opposes Freeing up Further EUR 6.5 bln From EPF

1st Primark Store in Hungary Opens Retail

1st Primark Store in Hungary Opens

New Textile Collection Celebrates Hungary's Furmint Grape Wi... Art

New Textile Collection Celebrates Hungary's Furmint Grape Wi...


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.