Pressured in the morning by the possibility of new US and EU sanctions against Moscow after fighting has renewed in Ukraine, and euro area uncertainties after an election victory by the anti-austerity Syriza party in Greece, the Budapest parquet emerged above the waterline in the afternoon with the help of Western markets bracing for ECB’s quantitative easing, and mainly on Magyar Telekom following rumors of expansion plans by its parent, Deutsche Telekom. Speculation that Deutsche Telekom could be interested in acquiring part or the whole of the 40.79% of Magyar Telekom it does not own has been recurring since early last year.
The National Bank of Hungary (MNB) plans to widen the scope of its cheap loan programme, the Funding for Growth Scheme (FGS), to include large corporates this year, its governor told public radio over the week-end.
After commercial banks extended loans worth over HUF 500 bln in 2014 in the second phase of the programme, the governor said the MNB aimed to funnel HUF 1 trillion worth of loans into the economy this year, and to large firms as well, under the FGS, which he said could lift growth to the 3-4% range. “Big businesses should also be part of this programme,” he said.
The MNB officially expects 2015 economic growth at 2.3% after an estimated pace of more than 3% last year.
But economists doubt whether such measures can boost corporate lending to a 4-5% annual growth which would be consistent with sustainable economic growth, while the main problem is not lack or cost of loans, but weak consumer demand.
The annual growth rate of corporate loans total based on transactions amounted to 0.1% among credit institutions at the end of the first half of the year, while outstanding SME loans in the banking sector increased by 1.2 per cent between June 2013 and June 2014. At the end of the third quarter of last year, transaction-based corporate loans fell 2% compared to a year ago because of the strong base effect of the first phase of the FGS, MNB statistics show.
OTP Bank is in talks to raise its reported EUR 130m offer for state-owned Slovenian bank Nova KBM provided the Slovenian government strips the lender of some underperforming assets, an unidentified source at OTP told Reuters.
OTP won 1.80% to HUF 3,847 on turnover of HUF 2.67 bln from a HUF 5.54 bln session total, more than two-thirds of the daily average last year.
MOL sank 0.27% to HUF 11,180 on turnover of HUF 619 mln.
Magyar Telekom rose 2.30% to HUF 356 on turnover of HUF 924 mln.
Richter advanced 0.37c to HUF 3,789 on turnover of HUF 1.10 bln.
The bourse’s mid-cap BUMIX went out 1.97% lower at 1,408.12.
Elsewhere in the region, the WIG 20 in Warsaw was down 0.53%, while Prague’s PX improved 1.18%. Western Europe’s major indices were all up ahead of their close Monday, FTSE-100 in London 0.22%, DAX30 in Frankfurt 1.42%, and CAC40 in Paris 0.75%.
