BUX withstands global caution

Telco

The Budapest Stock Exchangeʼs main BUX index finished up 1.05% at 23,769.46 Wednesday, after rising 1.24% Tuesday. It is down 0.63% from year-end, after surging 43.81% last year.

Despite domestic troubles looming, the Budapest parquet performed well in line with most regional markets while Western indices stumbled in narrow range from gain to loss to gain confused by contradicting signposts, including uncertainty ahead of the Fedʼs decision in the evening with disappointing company results and guidance but jumping US mortgage applications and rising consumer confidence in the background, crude prices supported on Tuesday by efforts of oil producers to agree on production cuts but pressured by bulging US inventories on Wednesday, Chinese shares falling but other Asian markets improving, and the euro strengthening again.

The upturn in regional markets reflects foreign investorsʼ hedging on speculation that these economies, largely not dependent either on trade with China or raw material exports, are set to come out of the present crises ahead of the rest of the emerging economies, analysts say.

On the domestic turf, Hungaryʼs government again hinted at the possibility of introducing some special tax on the retail sector with heavy bias against large, mostly foreign owned, chains.

A special levy on large retail companies was introduced in 2010 and withdrawn in 2012 under threat of EU action. Another approach to stifle large chains was designed last year by making a food retail inspection fee based on surface and turnover steeply progressive but this was instantly banned by the EU on competition and state aid objections.

On Wednesday, the National Bank of Hungary (MNB) launched a macroprudential strategy that aims to prevent or minimise the impact of financial crises with countermeasures that would include moderating credit and collateral growth, although the lack of this, analysts add, is presently one of the the chief drawbacks in Hungaryʼs economy.

Also on Wednesday, Hungary slipped three spots to 50th place in Transparency Internationalʼs 2015 Corruption Perceptions Index ranking. Hungaryʼs score on the index -- 0 to 100, with 0 being the most corrupt -- was 51, down from 54 a year earlier. Hungaryʼs ranking was level with that of Slovakia and Croatia, but it was behind Poland (30th), Slovenia (35th) and the Czech Republic (37th). It was ahead of Romania (58th).

OTP won 2.81% to HUF 5,963 on turnover of HUF 5.12 bln from a preliminary HUF 8.26 bln session total, less than a fifth short of the daily average in the last 52 weeks.

MOL lost 0.07% to HUF 13,785 on turnover of HUF 729 mln.

Magyar Telekom gained 0.25% to HUF 397 on turnover of HUF 134 mln.

Richter advanced 0.38% to HUF 5,600 on turnover of HUF 2.03 bln.

The bourseʼs mid-cap BUMIX went out 1.27% higher at 1,660.10.

Elsewhere in the region, WIG 20 in Warsaw was up 0.26%, while Pragueʼs PX garnered 1.09%.

Western Europeʼs major indices were mixed ahead of their close on Wednesday, with FTSE100 in London up 0.70%, DAX30 in Frankfurt up 0.07 %, and CAC40 in Paris down 0.03%.

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