BUX rises in confident trade

After Thursdayʼs slowdown, the Budapest parquet on Friday caught up with European markets that rose on the continuing weakening of the euro against the US dollar which raised expectations for company profits.

The improving economic and exports outlook in the euro area, especially in Germany, supports the closely linked CEE economies and asset prices together with expectations that the Hungarian currency is about to turn around and weaken, too, after the euro rebounded from a 15-month low against the Hungarian currency earlier in the week. Disappearing yields in the euro area in the wake of the ECBʼs QE also support riskier assets, including shares.

Soothing words from Hungaryʼs government also helped. The Prime Minister said in his regular week-end public radio interview that he wanted the 2016 budget draft ready by summer to increase predictability, and the Economy Minister added that the government was assessing decreasing VAT on several products, although "no large changes should be expected" in the rate of the corporate and the personal income tax next year, with single digit tax rates probable only by 2018-19.

The Economy Minister also nodded in a TV interview to analysts predictions of economic growth in Hungary around 3% this year instead of the governmentʼs still official target of 2.5%, suggesting a raise of the target.

The Prime Minister also confirmed earlier pledges to cut the special bank tax from next year for banks that boost lending.

OTP was back in favour after a bill of the governing Fidesz party showed that banks would not be obliged to pay upfront to top up an investors insurance pool as was initially feared. Following bankruptcy procedures against three local brokerages, the bill would raise the compensation capacity of the insurance fund financed by the financial sector, but pool members could borrow from the central bank for a ten-year maturity for the purpose, and also seize some assets of the failed brokerage houses.

OTP won 2.46% to HUF 5,502, its highest close since July 26, 2011, on turnover of HUF 5.36 bln from a HUF 8.96 bln session total, less than a tenth short of the daily average this year.

MOL rose 0.43% to HUF 13,980 the highest close since February 10, 2014, on turnover of HUF 1.64 bln.

Magyar Telekom improved 0.24% to HUF 424, a more than two-year closing high, on turnover of HUF 355 mln.

Richter advanced 1.96% to HUF 4,160, another almost seven-month closing high, on turnover of HUF 1.45 bln.

The bourseʼs mid-cap BUMIX went out 1.38% higher at 1,578.07.

Over the holiday-shortened week, the BUX added 5.75% to a rise of 0.19% in the previous week.

OTP gained 3.81% after finishing last week flat.

MOL surged 9.73% after rising 2.49% the previous week.

Magyar Telekom increased 2.66% after falling 0.96% last week.

Richter improved 6.69% after dropping 1.34% over the previous week.

The BUMIX garnered 2.71% after a plus of 0.34% last week.

Elsewhere in the region, WIG 20 in Warsaw was up 0.07%, while Pragueʼs PX lost 0.09%. Western Europeʼs major indices were all up ahead of their close Friday, FTSE-100 in London 0.97%, DAX30 in Frankfurt 1.63%, and CAC40 in Paris 0.49%.