BUX underperforms European peers
The Budapest Stock Exchangeʼs main BUX index finished down 2.95% at 23,179.43 Monday, after falling 1.65% Friday. It is down 3.10% from year-end, after surging 43.81% last year.
While euro zone indices fared mixed after falling on Friday to the lowest since December, 2014, the Budapest parquet accelerated an aggressive negative repricing after huge wins last year.
Cheap oil is a bonus for Hungaryʼs economy as a whole, but possible repercussions in terms of inflation that could slow again after some acceleration in December, led to second thoughts.
Analysts expect the National Bank of Hungary (MNB) to restart easing soon, but the MNB itself refrained from communicating a reinforced easing bias in recent weeks. With falling inflation or, maybe, deflation returning, real interest rated should become even more negative, making it difficult for banks to increase lending, after they have been hit by a heavy fine last week for alleged cartel activities.
Unease is also felt as European authorities seem to turn tough on Poland after its new government has copied some unorthodox and illiberal policies from the Hungarian governmentʼs book, and Standard & Poorʼs unexpectedly downgraded Polandʼs debt on Friday.
Meanwhile, the market dearly lacks the flow of new money printed by the Fed until end-2014, and the quantitative easing of the European Central Bank (ECB) started last spring seems to be way not enough to prop up either euro zone or emerging Europe markets as it did despite similar economic odds after chairman Mario Draghi has introduced his "whatever it takes" slogan in 2012.
Morgan Sachs on Monday raised its recommendation for drugmaker Richter to "neutral" from "sell", but this did not help.
OTP lost 3.15% to HUF 5,900 on turnover of HUF 5.35 bln from a preliminary HUF 10.95 bln session total, 5% above the daily average of the last 52 weeks.
MOL fell 2.94% to HUF 13,200 on turnover of HUF 1.27b.
Magyar Telekom eased 0.75% to HUF 397 on turnover of HUF 351m.
Richter retreated 3.83% to HUF 5,400 on turnover of HUF 3.91 bln.
The bourseʼs mid-cap BUMIX went out 0.70% lower at 1,643.21.
Elsewhere in the region, WIG 20 in Warsaw was down 3.19%, while Pragueʼs PX shed 1.51%.
Western Europeʼs major indices were mixed ahead of their close on Monday, with FTSE100 in London down 0.22%, DAX30 in Frankfurt up 0.23%, and CAC40 in Paris down 0.08%.
SUPPORT THE BUDAPEST BUSINESS JOURNAL
Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.