BUX up on MOL, euro zone data

The Budapest bourse was boosted by tailwind from Western markets that rose after a fresh survey showed the euro zone produced better-than-expected business growth in July after an agreement was reached on a Greek bailout.

In domestic news, annual retail trade growth in Hungary surprisingly accelerated in June at a pace second only to that in January. Figures for monthly comparison will come later, after retail trade shrank in value terms in May compared to April.

Pent-up demand, more money to spend after the conversion of forex mortgages into the local currency, lower oil prices, and the introduction last year of cash registers connected online to the tax office which "whiten" trade might be factors behind the annual increase, analysts say.

Meanwhile, further dire straits of corporate lending loom. The latest figures from the National Bank of Hungary (MNB) show that in its preferential Funding for Growth programme aimed at SMEs HUF 43.5 bln new contracts were signed and HUF 33,4 bln in new loans were actually disbursed in July, 37% and 36% less, respectively, than a year ago.

Data out last week showed the overall corporate lending stock of Hungarian banks fell in June from the previous month on net repayments.

With inflation set to accelerate and the central bankʼs policy rate expected to stay at the present record low level until at least the second half of next year, negative real rates are at the corner. This might increase companiesʼ appetite for loans even amid volatile domestic consumer demand, but also make banks more scrupulous in lending to them, analysts add.

The dayʼs winner was oil and gas group MOL in huge volumes after it reported an above-consensus surge to a record profit in the second quarter on very strong downstream performance. The company also raised its full-year outlook.

OTP gained 0.89% to HUF 5,801 on turnover of HUF 1.24 bln from a HUF 7.55 bln session total, a fifth short of the daily average this year.

MOL soared 2.15 % to HUF 14,950 on turnover of HUF 4.90 bln.

Magyar Telekom won 0.98% to HUF 413 on turnover of HUF 635m.

Richter ended flat at HUF 4,490 on turnover of HUF 563m.

The bourseʼs mid-cap BUMIX went out 0.21% higher at 1,685.03.

Elsewhere in the region, WIG 20 in Warsaw was up 1.07%, while Pragueʼs PX lost 0.16%.

Western Europeʼs major indices were all up ahead of their close on Wednesday, FTSE100 in London 0.75%, DAX30 in Frankfurt 1.61%, and CAC40 in Paris 1.62%.