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BUX volatile, but rises

Telco

The Budapest Stock Exchangeʼs main BUX index finished up 0.16% at 22,545.21 Thursday after rising 0.51% Wednesday. It is up 35.54% from year-end, after losing 10.40% last year.

After a day spent under the previous close, the main index of the Budapest bourse bounced slightly back to a second more than three-month high within three days in last settlements, rising for an eighth time in nine trading days. For most of the day it took cue from European markets that fell, ignoring a new hint at further easing by ECBʼs head at a hearing in the European Parliament.

On the domestic front, industrial data came in mixed.

Annual industrial production growth accelerated in September, but domestic sales growth slowed fast, while export sales growth accelerated marginally. Adjusted for workdays, sales growth slowed, as a marginal acceleration of export sales growth could not balance a big slowdown in domestic sales growth. In monthly comparison, production growth returned after two months of falls, while sales grew marginally after a fall in August.

In construction, annual output growth also reappeared in September after two months of falls.

The European Commission raised objections to offering tax preferences to banks in Hungary that lent more in the past, and to allowing tax deductions for losses suffered in Russia and Ukraine by domestic banks, Hungaryʼs economy minister said on Thursday.

Analysts views differed if the ministry wanted to use the opinion in Brussels to thwart the central bankʼs recommendation to link an already legislated bank tax cut to increased lending, or as a pretext to rewrite the bank tax regime as a whole, backing away from a February agreement with the European Bank of Reconstruction and Development (EBRD) and Erste Group which involved gradual cuts of the special bank levy unconditionally.

The minister also said that "for the time being" the government had no plans to sell its stakes in oil company MOL and drugmaker Richter.

Ahead of results on Friday, Dow Jones poll showed analysts consensus for OTP Bankʼs profit to have fallen by 54% in the third quarter from a year ago mostly on one-off charges linked to the conversion of foreign-currency loans in Hungary and in Croatia into local currency debt. Loan conversion charges discounted, adjusted net profit at OTP still fell 19% on a sharp decline forecast in net interest income, the poll suggested.

Analysts agree that Hungaryʼs economic growth continued to slow in the third quarter. A first official estimate is due on Friday.

OTP lost 0.99% to HUF 5,692 on turnover of HUF 6.00 bln from a preliminary HUF 9.87 bln session total, a tenth above the daily average this year.

MOL gained 0.45% to HUF 13,430 on turnover of HUF 876 mln.

Magyar Telekom rose 1.79% to HUF 398 on turnover of HUF 313 mln.

Richter advanced 0.60% to HUF 5,030 on turnover of HUF 2.58 bln.

The bourseʼs mid-cap BUMIX went out 0.44% higher at 1,614.60.

Elsewhere in the region, WIG 20 in Warsaw was down 0.41%, while Pragueʼs PX dropped 1.43%.

Western Europeʼs major indices were all down ahead of their close on Thursday, FTSE100 in London 0.76%, DAX30 in Frankfurt 0.09%, and CAC40 in Paris 1.62%.

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