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BUX overperforms in pre-ECB trade

Telco

The Budapest Stock Exchangeʼs main BUX index finished up 0.33% at 23,846.61 Tuesday after gathering 0.24% on Monday. It is up 43.36% from year-end, after losing 10.40% last year.

Slowly climbing to the fifths nearly four-and-a-half-year high within two weeks, the BUX outperformed euro area indices that stuttered after strong data on manufacturing performance and falling unemployment dented some of the highest expectations for the scope and weight of easing measures the European Central Bank (ECB) is projected to announce on Thursday.

But investors reckon that any amount of ECB easing would be a bonus for shares in emerging Europe, including Hungary. Tempered certainty for a US rate hike still this month in view of dismal US manufacturing data in the afternoon supported shares as well.

The market also welcomed Hungaryʼs Purchasing Managers Index (PMI) that rose to the highest reading in 2015 in November, after a slowdown in October. The sub-index of new orders also rose slightly, but that was enough for an all-time high since 1995, when polling for PMI started in Hungary.

However, the employment sub-index pointed to contraction once more after a temporary rise in October. Prices also remained under lid in November.

Thus, the data have not shaken expectations that the National Bank of Hungary (MNB) would also chip in some further non-conventional easing on December 15 as it had quasi predicted it last week, although the effectiveness of its measures is highly debated among economists.

OTP Bank rose more after it announced that it bought HUF 1.3 bln of its own shares in the previous session.

Oil company MOL recovered on rising domestic fuel prices after it fell on Monday on news of continuing disputes between a consortium of which it is a member and the Iraqi Kurdistan local government concerning payments.

Drugmaker Richter corrected down after it reached an all-time high on Monday at the end of a ten-day spell of surge.

OTP won 0.82% to HUF 6,120 on turnover of HUF 5.86 bln from a preliminary HUF 12.15 bln session total, more than a third above the daily average this year.

MOL rose 0.63% to HUF 13,585 on turnover of HUF 983 mln.

Magyar Telekom improved 0.50% to HUF 404 on turnover of HUF 173 mln.

Richter retreated 0.48% to HUF 5,563 on turnover of HUF 5.06 bln.

The bourseʼs mid-cap BUMIX went out 0.20% lower at 1,623.62.

Elsewhere in the region, WIG 20 in Warsaw was down 0.30%, while Pragueʼs PX lost 0.55%.

Western Europeʼs major indices were mixed ahead of their close on Tuesday, with FTSE100 in London up 0.60%, DAX30 in Frankfurt down 1.01%, and CAC40 in Paris down 0.79%.

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