BUX plunges after Moody’s downgrade

Telco

The Budapest Stock Exchange’s main BUX index opened down 3.13% at 16,441.74 on Friday, after Moody’s downgraded Hungary’s sovereign rating to "junk" for the first time in 15 years.

Moody’s cut Hungary’s debt rating to Ba1 from Baa3 late Thursday.

OTP Bank fell 5.09% to HUF 2,890, oil and gas company MOL dropped 3.55% to HUF 17,505, drug maker Richter lost 1.45% to HUF 34,000 and Magyar Telekom dipped 1.21% to HUF 489.

Analysts interviewed by MTI said they expected share prices to fall on the BSE after the Moody’s downgrade Thursday night.

Zoltan Varga of the QUAESTOR Group said this could end of the outperformance of the Hungarian stock exchange seen in recent days. It could influence OTP and Magyar Telekom shares in particular as the Monetary Council could be compelled to raise the base rate by 25-50 basis points at next Tuesday’s rate-setting meeting due to the repeated forint weakening.

Zsolt Balasy of Concorde Securities said the direction of share price movements is not a matter of question now, "only the extent and the duration of the fall is". The forint immediately hit a new low against the dollar, he added.

The BUX closed down 0.03% at 16,973.50 on Thursday, on turnover of HUF 10.6bn.

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