BUX underperforms in cautious week-end trade

Finishing a roller-coaster week on global market turmoil, investors in the Budapest parquet cautiously drew back ahead of the week-end recess.

The BUX underperformed regional peers as good Polish and Czech GDP data reminded investors of the slowdown in Hungary.

While Hungaryʼs government celebrated fresh official numbers on unemployment falling and general employment increasing again in the latest, May-July, period, investors apparently do not expect that this could stimulate lean consumer demand. Analysts suspect the effect of low-paid seasonal work in the summer including temporary hiring of students, and point out the unreliable nature of the data as a whole, because figures are based on sample-taking for one week only in any three-month period, terming "employed" everybody who worked for money with or without a contract for at least one hour in the reference week, and are distorted by inclusion of fostered workers earning less that the official minimum wage and people working abroad for less than a year.

Other fresh data out Friday showed credit institutions in Hungary recorded a combined pre-tax profit of HUF 155.0 bln in the first half of this year, with 46 of the 156 counted still in the red to the tune of HUF 55.5 bln, compared to a combined audited loss of HUF 294.1 bln in the first half of last year, and a loss of HUF 486 bln in the whole of 2014, including provisioning for mandatory client refunds. Provisions were ploughed back this year.

But attesting to moribund lending, combined interest revenue of credit institutions fell 12.2% while interest expenditure fell only 1.0% relative to the same period of the previous year, translating into a 20.7% plunge in net interest income.

Corporate lending stock of credit institutions fell 2.1% by the end of the second quarter from the end of March, and was down 6.0% from a year ago, and 7.7% down from the end of 2014, the National Bank of Hungary (MNB) said on Friday.

Outstanding lending to households fell 1.7% from the end of March, and was down 9.2% from the end of last year.

Total loans of credit institutions were up 1.0% from the end of March on increased lending to the central government and credit institutions, but was still down 3.8% from the end of last year.

OTP fell 1.39% to HUF 5,335 on turnover of HUF 3.92 bln from a HUF 6.40 bln session total, nearly a third short of the daily average this year.

MOL lost 0.82% to HUF 13,985 on turnover of HUF 1.09 bln.

Magyar Telekom ended flat at HUF 395 on turnover of HUF 136m.

Richter retreated 0.47% to HUF 4,240 on turnover of HUF 1.19 bln.

The bourseʼs mid-cap BUMIX went out 0.60% lower at 1,647.37.

Over the week, the BUX was down 3.55% after losing 0.81% in the previous, holiday-shortened, week.

OTP dropped 5.32% after falling 0.35% last week.

MOL decreased 3.52% after easing 0.03% the preceding week.

Magyar Telekom was off 0.50% after plunging 2.22% last week.

Richter shed 2.64% after dropping 2.02% over the previous week.

The BUMIX dipped 2.39% after gaining 0.30% over last week.

Elsewhere in the region, WIG 20 in Warsaw was up 1.29%, while Pragueʼs PX garnered 0.46%.

Western Europeʼs major indices were mixed ahead of their close on Friday, with FTSE100 in London up 0.38%, DAX30 in Frankfurt down 0.60%, and CAC40 in Paris down 0.04%.