Budapest bourse to introduce mortgage bond indices

MNB

Photo courtesy Budapest Stock Exchange

The Budapest Stock Exchange (BSE, or BÉT using its Hungarian acronym) will launch three mortgage bond indices, unique in the region, from December, the bourse said yesterday, state news agency MTI reported.

The indices, the BSE Mortgage Bond Total Return Index (BMBX Total Return), the BSE Mortgage Bond 3-Year Yield Index (BMBX Yield 3Y) and the BSE Mortgage Bond 5-Year Yield Index (BMBX Yield 5Y), are being introduced in cooperation with the National Bank of Hungary (MNB).

The index values will be published monthly from December 1, 2017. A six to twelve-month observation period will follow, during which time the central bank will adjust its methodology based on experience and market feedback.

The indices are in line with MNB measures to deepen the mortgage market, the bourse said.

The MNB started requiring lenders to finance at least 15% of their home mortgage loan stock with mortgage bonds from the spring of 2017, lifting mortgage bond issuance close to HUF 400 billion since the fall of 2016. The ratio will rise to 20% from the autumn of next year, MTI added.

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