BUX rises for a second day

Telco

The Budapest Stock Exchangeʼs main BUX index finished up 0.53% at 21,152.44 Tuesday after rising 1.19% Monday. It is up 27.16% from year-end, after losing 10.40% last year.

The Budapest bourse, though reined in by OTP Bank, rode for a second day global sentiment that improved on expectations central banks in Europe and the US will keep an equity-friendly monetary policy in the coming months.

Hopes are also there for central banks in emerging Europe to loosen policy further in view of signs of slowing economic growth and the prospect of continued low inflation and interest rates across the world.

Hungaryʼs annual GDP growth slowed from 3.5% in the first quarter to 2.7% in the second quarter, and the cabinet chief said last week the government was eagerly looking for ideas to keep the pace above at least 2% in the foreseeable future.

Annual retail trade growth has sharply decelerated in August in Hungary according to official statistics published on Monday.

After a large gain on Monday, OTP Bank was subdued following an announcement of the National Bank of Hungary on Tuesday that it replaces the current optional 2% to 5% reserve calculation system with a uniform reserve ratio set at 2% for all domestic banks from December 1, in order to prompt more of banksʼ funds out of central bank instruments into government paper which yield less and less recently. In addition, signs multiply that the government is ready for another round of arm-twisting to coerce bank to lend more to corporates as well despite low creditworthy demand. The government last week broached the possibility to review even the February agreement with the European Bank for Reconstruction and Development (EBRD) to gradually cut the special bank levy from next year unconditionally.

OTP lost 0.09% to HUF 5,350 on turnover of HUF 3.15 bln from a preliminary HUF 6.21 bln session total, about two-thirds of the daily average this year.

MOL gained 0.47% to HUF 12,755 on turnover of HUF 1.51 bln.

Magyar Telekom rose 1.28% to HUF 396 on turnover of HUF 921m.

Richter advanced 1.12% to HUF 4,500 on turnover of HUF 1.42 bln.

The bourseʼs mid-cap BUMIX went out 0.12% lower at 1,614.66.

Elsewhere in the region, WIG 20 in Warsaw was up 0.52%, while Pragueʼs PX shed 0.21%.

Western Europeʼs major indices were all up ahead of their close on Tuesday, FTSE100 in London 0.37%, DAX30 in Frankfurt 0.95%, and CAC40 in Paris 1.06%.

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