Russian economic worries batter BSE, forint
Concerns about troubles with the Russian economy today continued to plague the Budapest Stock Exchange, which was down 1.76% at 11 a.m., and the forint, which was trading at EUR 312.295 on the interbank market at 10 a.m. today.
While most European shares rallied, the Budapest Stock Exchange yesterday closed down 4.8% from the previous day. Companies with significant exposure to Russia: OTP (down 7% in spite of positive news about a possible decrease of the bank levy in 2016) and Richter (down 4.73%) led the free-fall of shares in a widespread sell-off across the Budapest trading floor.
The pharmaceutical company’s shares fell yesterday to HUF 3,440 after the company issued a profit warning earlier yesterday and a downgrade of the shares by Goldman Sachs, before recovering some of the losses and closing the day at HUF 3,525, with a higher than average turnover of more than HUF 2.5 bln. OTP yesterday fell to HUF 3,600 but ended the day with a small recovery as well, at HUF 3,684 amid a turnover of nearly HUF 15 bln, well above this year’s average.
Also yesterday, the Hungarian Forint fell from 308.5 against the Euro to slightly above 314 amid concerns about the Russian economy, before gaining HUF 2 when the American markets opened. The forint also remained weak against the dollar, trading between 248.70 and 251.20 and ending the day around 249.70.
Efforts by the Russian central bank to stop the falling ruble have failed so far, reviving memories of the 1998 financial crisis, while an increasing number of analysts are expecting Russia to withdraw from eastern Ukraine.
Light crude oil for January delivery recovered from a nearly 4% plunge yesterday morning to trade flat at $55.77 a barrel according to marketwatch.com.
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