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BUX stalls after Greek deal

Telco

The Budapest Stock Exchangeʼs main BUX index finished up 0.16% at 22,098.77 Monday after rising 1.52% Friday. It is up 32.85% from year-end, after losing 10.40% last year. Over last week, the BUX was up 0.87% after rising 0.30% the previous week.

The bailout deal for Greece reached by euro zone leaders Monday morning, and Chinese sharesʼ bounce to two-week highs on better than expected foreign trade data helped lift the Budapest parquet steeply, too - initially.

Later on, investors seemed to ponder some possible repercussions of the Greek deal, and the BUX spent most of the afternoon in light red, struggling back above the waterline only towards close, mainly on OTP.

First, just as much Greeceʼs half-year ordeal has not shackled the BUX due to Hungaryʼs very few direct financial or business links to Greece, the promising Greek deal did not boost the market for long either. After two days of healthy rises, the "buy on the rumor, sell on the fact" effect took its tall.

And to a Hungarian government sympathising with Greeceʼs stubbornness for long, the outcome of the Greek talks now shows that in case of an emergency, caused partly by Greek government policies themselves, the EU does not tolerate serious deviation and also has the means to bring home limits of "unorthodox" policies on those experiencing with them.

This may somewhat tame the Hungarian government in the future, a development which, although market friendly on a longer term, could make investors rethink some positions in the short run, especially concerning such companies that benefit from market-bending, nationalistic economic policies in Hungary, analysts say.

OTP won 0.43% to HUF 5,780 on turnover of HUF 5.95 bln from a HUF 8.26 bln session total, 15% short of the daily average this year.

MOL gained 0.21% to HUF 14,385 on turnover of HUF 1.29 bln.

Magyar Telekom fell 0.25% to HUF 393 on turnover of HUF 238m.

Richter retreated 0.12% to HUF 4,250 on turnover of HUF 701m.

The bourseʼs mid-cap BUMIX went out 0.01% higher at 1,652.95.

Elsewhere in the region, WIG 20 in Warsaw was down 0.02%, while Pragueʼs PX rose 1.00%. Western Europeʼs major indices were all up ahead of their close on Monday, FTSE100 in London 0.86%, DAX30 in Frankfurt 1.56%, and CAC40 in Paris 2.12%.


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