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BUX further up on MOL

Telco

The Budapest Stock Exchangeʼs main BUX index finished up 0.19% at 23,477.19 Thursday after climbing 0.46% Wednesday. It is up 41.14% from year-end, after losing 10.40% last year.

Despite continuing gloom caused by ECBʼs disappointingly mild easing last week, a stronger euro in its wake, and dismal Chinese trade data this week, Western indices mostly profited from a consolidation in commodity related shares which became cheap lately on falling raw material prices, and the same helped MOL outperform and support the Budapest main index.

Cheaper oil is increasingly pricing out shale oil, OPEC said in a monthly report on Thursday. This process benefits conventional producers in terms of market share and sales, including MOL, analysts add.

Fresh Hungarian October foreign trade data did not do much to invigorate the market as they showed deceleration in annual export growth and a fall in monthly comparison, while annual import growth also slowed, but it widened for a second month compared to the preceding month. Trade balance more than doubled from a year ago, but fell almost 30% from September.

Economic research institute GKI has raised its GDP growth forecast for 2016 to 2.3% from its earlier projection of 2.0% on the base effect of the farm sectorʼs poor performance this year and the positive impact of the reduction of the bank levy next year, but its compares to its prediction for 2.7% growth this year and an actual 3.6% last year. It highlighted that investments were expected to decline 5% next year after stagnating this year.

A recent modification to public procurement legislation which allows relatives of government officials to participate in public tenders if they live in s separate household also casts some shadow on the market as it could limit the chances of independent players while public financing is to narrow in the coming years due to fewer EU funds. Earlier this week the Budapest ambassador of the US was quoted as criticising the law, saying it was not proper that "US companies should compete with relatives of government figures". But on Thursday, the chief of staff of Hungaryʼs government rebuffed the criticism as unjust, saying Hungary was not favouring anybody, and Hungary "was not like the US, here nobody can become ambassador for supporting a political party."

OTP lost 0.84% to HUF 5,870 on turnover of HUF 3.68 bln from a preliminary HUF 8.32 bln session total, less than a tenth short of the daily average this year.

MOL gained 1.70% to HUF 13,750 on turnover of HUF 952m.

Magyar Telekom rose 0.98% to HUF 414 on turnover of HUF 465m.

Richter retreated 0.18% to HUF 5,416 on turnover of HUF 3.07 bln.

The bourseʼs mid-cap BUMIX went out 0.11% lower at 1,616.08.

Elsewhere in the region, WIG 20 in Warsaw was up 1.63%, while Pragueʼs PX garnered 0.04 points.

Western Europeʼs major indices were mixed ahead of their close on Thursday, with FTSE100 in London down 0.53%, DAX30 in Frankfurt up 0.28%, and CAC40 in Paris up 0.13%.

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