Foreign investors buy gov’t paper in April, sell in January-April

Non-resident or foreign investors invested net HUF 67 billion or €224 million at the current exchange rate in Hungarian forint-denominated government papers in April, but were still net sellers in January-April, state debt management agency (ÁKK) data show. The rise came after moderate purchases in January, extensive net sales in February and practically no change in March. The foreign holdings of HUF 4,904 billion at the end of April were HUF 105 billion less than the near-peak at the end of 2012. Last year, foreign investors invested net HUF 1,264 billion in forint securities, financing not only the HUF 608 billion cashflow-based central government deficit, but also a big part of last year's €4.8 billion of FX expiries, which, in the absence of foreign currency issues, were mostly paid from forint issues. Non-residents' stock hovered around or slightly over the end-of-2012 level until the middle of February, when a big bond expiry cut the stock, and, instead of reinvestments, further selloffs followed. Foreign holdings hit the bottom at a little under HUF 4,780 billion late in March, when the stock was HUF 230 billion down from the end of 2012. Foreigners have been buying since, and their stock rose to exceed HUF 4,930 billion by the beginning of the second week of May.