An unexpected member of the world championsʼ league in terms of year-to-date rises, apparently a temporary minor safe heaven for the brave in a volatile global environment, hoovering up cheap liquidity that cautiously avoids the real economy, the Budapest parquet nevertheless returned to outperforming euro zone peers on Thursday, with the Greek crisis on the backburner until the referendum planned for Sunday in Greece.
OTP Bank led the pack after Credit Suisse raised its target price for OTP to HUF 6,500 from HUF 5,400 with overweight rating.
“We think consensus is too conservative on pay-out ratios and that increasing dividend per share provides further support to the share,” Credit Suisse said in a note.
Also helpful to Hungaryʼs bank sector were analystsʼ reviews on Thursday on the possibility of international competition to evolve in the second half of the year to buy up pieces of Hungarian banksʼ non-performing corporate portfolio, a new market in which an investment vehicle of the National Bank of Hungary (MNB) — the Hungarian Reorganisation and Receivables Management Company (MARK) established by the central bank last autumn — might now be just one of the contenders.
A proposal of the Basel Committee of banking supervisors to further tighten banksʼ capital requirements to cover risk of credit valuation adjustment (CVA) mismatches between banks in derivatives transactions did not hinder OTPʼs rise as such market is irrelevant in Hungary, and neither did news on Thursday that OTP board members sold chunks of their holdings in OTP on Wednesday.
OTP won 1.32% to HUF 5,699 on turnover of HUF 3.42 bln from a HUF 5.22 bln session total, about half the daily average this year.
MOL gained 0.17% to HUF 14,470 on turnover of HUF 653 mln.
Magyar Telekom lost 0.75% to HUF 395 on turnover of HUF 98 mln.
Richter advanced 0.71% to HUF 4,230 on turnover of HUF 956 mln.
The bourseʼs mid-cap BUMIX went out 0.27% higher at 1,644.46.
Elsewhere in the region, WIG 20 in Warsaw was up 0.09%, while Pragueʼs PX rose 0.17%.
Western Europeʼs major indices were mixed ahead of their close Thursday, with FTSE100 in London up 0.31%, DAX30 in Frankfurt down 0.77%, and CAC40 in Paris down 0.97%.
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