BUX pares losses, outperforms
The Budapest Stock Exchangeʼs main BUX index finished down 0.84% at 21,623.72 Monday after surging 1.54% Friday. It is up 30.00% from year-end, after losing 10.40% last year. Over last week, it was up 1.57% after falling 1.87% the previous week.
The Budapest parquet followed European peers down in the wake of the week-end collapse of talks between Greece and its creditors, but pared losses by close as investors saw risk of contagion limited. Hungary is not a member of the euro zone, trade and investment links with Greece are few, and there are no Greek banks present in Hungary.
The real risk for emerging markets from the Greek crisis is whether it triggers broader contagion in the euro zone and global financial markets, Capital Economics said in a note on Monday.
"The concern is that a financial crisis in Europe would lead to a collapse in investor risk appetite, which in turn would disrupt capital flows to emerging markets," it said.
However, other analysts emphasise that euro zone finances and the economy is in a much better shape to withstand the fallout of any Greek developments than even a few years ago.
At the same time, a new row with the EU is brewing, after Hungaryʼs Prime Minister, Viktor Orban, rejected the European Commissionʼs recommendations on budget spending cuts and on providing benefits to the needy rather than fostered work. And then the Brussels commission has not even looked yet into to competition conformity of some aspects of fostered work in Hungary. Local councils can loan cheap fostered workers to agricultural companies for seasonal work, a practice that makes others that pay market-based wages uncompetitive, analysts add.
Oil and gas company MOL on Monday relayed a production and marketing update from the operator of the Shaikan block in the Kurdistan Region of Iraq. MOL said operator Gulf Keystone Petroleum had confirmed that it continues to produce more than gross 40,000 barrels of oil equivalent per day. And, as a result of the continuing dialogue with the Kurdistan Regional Governmentʼs Ministry of Natural Resources to establish a regular payment cycle for all oil sales both current and historic, Gulf Keystone Petroleum and MOL have now adopted a diversified marketing strategy, it added.
OTP lost 1.00% to HUF 5,530 on turnover of HUF 8.86 bln from a HUF 11.33 bln session total, more then a tenth above the daily average this year.
MOL fell 1.05% to HUF 14,200 on turnover of HUF 790 mln.
Magyar Telekom eased 1.25% to HUF 395 on turnover of HUF 436 mln.
Richter retreated 0.07% to HUF 4,197 on turnover of HUF 1.16 bln.
The bourseʼs mid-cap BUMIX went out 1.34% lower at 1,634.31.
Elsewhere in the region, WIG 20 in Warsaw was down 1.72%, while Pragueʼs PX dropped 2.30%.
Western Europeʼs major indices were all down ahead of their close Monday, FTSE100 in London 1.77%, DAX30 in Frankfurt 3.37%, and CAC40 in Paris 3.68%.
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