Fitch changes outlook on Hungary’s LTFC rating to stable

Ratings

Fitch Ratings has on Monday changed the outlook on Hungary’s BBB+ LTFC rating to stable from a long standing negative rating.

Gábor Ambrus, 4Cast, London
“The rating action comes as a response to fiscal consolidation that visibly affected internal and external balances. Fitch has far long been the most pessimistic agency as to Hungarian rating, its current decision moves Hungary in line with S&P and Moody’s. An upgrade by any of the major agencies seems far away in time, given the general lack of confidence in the continuation of the consolidation as the 2010 elections approach."

Dániel Bebesy, CIB Bank, Budapest
Fitch rating agency affirmed Hungary’s long-term foreign currency rating at BBB+, and at the same time the outlook has been revised to stable from negative. According to the agency, the upgrade reflects confidence that the government will meet its targets on the budget front. However the agency added in its statement that the significant share of foreigners among the bond holders, increasing FX denominated private sector debt, and the overall the large external financing needs relative to peers still makes Hungary vulnerable. The agency also claimed that the outlook was less promising, commitment to further fiscal consolidation could vain as elections approach, and this could renew a downward pressure on the rating. Euro per Forint show moderate impact, the cross firmed to 252.50 from levels above 253."

Silja Sepping, Lehman Brothers, London
“The outlook upgrade should be positive, especially for the back end of the curve, as it assures that the government’s fiscal consolidation is on track. Although we remain positive on the fiscal outlook, a rating upgrade by any major agency in the near-term seems unlikely in our view, as the agencies would probably prefer to wait for the budget outcome in 2007 and the final 2008 budget draft.”

Concorde Call, Budapest
“In our view the decision of Fitch is well founded, but it is more about the political steps of the recent future and its expectations about the future are similar to ours. At the same time this is an acknowledgement of Hungary’s positive budgetary developments, which would contribute to the decrease of long bond premiums, which are still relatively high. We expect long forint yields to come down to around 5.5% by the end of 2008.” (portfolio.hu)

ADVERTISEMENT

17% of homeowners plan renovations this year Analysis

17% of homeowners plan renovations this year

Meeting called to address Pegasus spyware lacks quorum  Parliament

Meeting called to address Pegasus spyware lacks quorum 

Skanska commercial dev unit names new EVP of operations Hung... Appointments

Skanska commercial dev unit names new EVP of operations Hung...

Zsa Zsa Gabor's ashes buried in Budapest City

Zsa Zsa Gabor's ashes buried in Budapest

SUPPORT THE BUDAPEST BUSINESS JOURNAL

Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.