BUX turns around

Telco

The Budapest Stock Exchange's main BUX index finished up 0.09% at 17,824.28 Wednesday after dropping 1.12% Tuesday. It is up 7.16% from year-end, after losing 10.40% last year. While individual shares performed mixed, the main index ended a four-day spell of losses on upbeat retail trade data and a larger-than-expected policy rate cut in Poland.

With the largest annual leap within 11 years, the January retail trade growth suggested Hungarian consumers have more money to spend as disposable incomes gain from cheaper fuel bills, around HUF 1,000 bln in refunds from banks for charges courts deemed "unfair" and the conversion of foreign-currency loans to forint debt. The reading strengthened expectations that economic growth this year, although probably slowing from last year, could be faster than recently forecast by the government, the European Commission and economists.

Poland's central bank slashed its main interest rate by 50bps 1.50%, the lowest on record, after most analysts expected a cut of 25bps only. This fueled expectations that the National Bank of Hungary (MNB) would follow suite later this month.

Magyar Telekom was slightly down in profit taking after rising 4.5% to 22-month highs in the past four days.

After a five-day drop of 5.7%, OTP recovered as investors have already priced in analysts' consensus for a net loss in the fourth quarter on provisioning for exposure in Ukraine, client refunds mandated by low and other regulatory changes on household mortgage contracts. Still large write-downs in Russia besides Ukraine, and solid improvements in Hungary, Bulgaria and Romania could follow in the present quarter, too, analysts say. OTP is set to publish its earnings early Friday.

OTP won 1.20% to HUF 4,200 on turnover of HUF 4.61 bln from a HUF 7.16 bln session total, 15% short of the daily average this year.

MOL gained 0.77% to HUF 11,800 on turnover of HUF 439 mln.

Magyar Telekom fell 1.26% to HUF 392 on turnover of HUF 521 mln.

Richter retreated 1.38% to HUF 3,714 on turnover of HUF 1.54 bln.

The bourse's mid-cap BUMIX went out 0.11% lower at 1,503.19.

Elsewhere in the region, the WIG 20 in Warsaw was up 0.70%, while Prague's PX dropped 0.30%. Western Europe's major indices were all up ahead of their close Wednesday, FTSE-100 in London 0.24%, DAX30 in Frankfurt 0.83%, and CAC40 in Paris 0.81%.

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