BUX up after internet tax shelved
The Budapest Stock Exchange's main BUX index finished up 1.01% at 17,320.32 Friday, after rising 1.47% Thursday. It is down 6.70% from the end of last year, after it rose 2.15% in 2013. Magyar Telekom soared from a more than five-month low the previous day, and almost the whole market improved further after the prime minister said a controversial plan to tax internet traffic would now be withdrawn from next year's budget bill, pending, as he put it, a "long national consultation" on the subject.
Good global mood after the surprise hike of the QE stimulus programme of the Bank of Japan also helped.
The public outcry in Hungary over the internet tax plan, complete with rarely seen mass demonstrations in Budapest this week and last, and the satisfaction with its shelving, veiled for the time being other worries over the government's intention to introduce new or higher special taxes on a host of everyday staples from soaps and deodorants to detergents to stationary goods, substantially raise taxes on extra-wage benefits (cafeteria), and hike the food chain supervision fee for large retailers, which are typically foreign-owned, including Tesco. These measures are likely to further hurt household consumption already weak on slowing employment and income growth.
A planned new tax on mutual fund activities might scare away retail investors, analysts say.
However, the government intends to withdraw the levy on bank card purchases.
Local statistics endorsed ongoing worries Friday. Industrial producer prices monthly growth steeply slowed, and their annual deflation continued in September.
In a revision, the statistical office corrected Hungary's August trade surplus slightly up, but it was still 44% smaller than a year ago as exports fell much more than imports.
Bank lending remained lacklustre in September to the private sector, except loans to SMEs in the framework of the central bank's "Lending for Growth' scheme. Household lending stock even fell from the end of August due to revaluations, the monthly report of the National Bank of Hungary (NBH) showed Thursday.
But a natural gas supply deal
signed late Thursday by Ukraine, Russia and the EU, which decreases the risk to Hungary's gas supply, and the hope expressed by Austria's foreign minister Friday that differences with the EU over the South Stream pipeline project can be resolved in the next month or so, allowing the plan to move ahead, also improved market mood, benefitting MOL.
OTP won 0.37% to HUF 4,065 on turnover of HUF 7.61 bln from a HUF 7.61 bln session total, 7% short of the daily average this year.
MOL gained 1.17% to HUF 11,700 on turnover of HUF 678m.
Magyar Telekom leapt 5.26% to HUF 340 on turnover of HUF1.42 bln.
Richter retreated 0.05% to HUF 3,753 on turnover of HUF 765m.
The bourse's mid-cap BUMIX went out 0.19% higher at 1,451.70.
Over the week, the BUX was up 0.13% after losing 1.99% the previous, holiday shortened, week.
OTP rose 0.87% after a loss of 0.30% last week.
MOL slid 0.13% after falling 0.89% the previous week.
Magyar Telekom gained 1.80% after plunging 6.96% last week.
Richter dropped 1.05% after diving 2.87% over the previous week.
Elsewhere in the region, Warsaw's WIG20 was up 0.73%, while Prague's PX increased 1.72%.
Western Europe's major indices were all sharply up ahead of their close Friday, FTSE-100 in London 1.15%, DAX30 in Frankfurt 2.15%, and CAC40 in Paris 2.21%.
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