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Foreign investors' stake in listed shares drops to 77.4% in Q2

Foreign investors (non-residents) held 77.4% of the shares listed on the Budapest Stock Exchange (BSE) at the end of June 2006. Foreign investors were net sellers on the bourse in the second quarter and their share of the BSE's market capitalization dropped 1.9 percentage points from the end of March, the National Bank of Hungary reported on Tuesday. The total market value of shares listed in Budapest dropped Ft 619.3 billion or 7.2% in the Q2 to Ft 6,999.1 billion at the end of June after rising Ft 646.4 billion or 9.3% in the Q1, the bank said in its quarterly report on the ownership structure of securities. About Ft 615.8 billion of the drop resulted from a fall in shares prices. Foreign investors sold net Ft 127.2 billion of Hungarian listed shares during the quarter and they also registered a Ft 496.6 billion loss on falling prices. Including another Ft 900 million drop resulting from the Domus delisting, the market value of their holdings dropped Ft 624.7 billion to Ft 5,419.5 billion in the Q2. All other sectors except for the general government were net buyers of listed shares during the period. The holdings of the general government fell Ft 276.9 billion to Ft 312.5 billion in Q2, mainly because of the sale to Hungarian oil and gas company Mol of a 10% stake of its own shares under an option agreement signed in December 2005. Ft 250.7 billion of the reduction in government holdings resulted from net sales, mostly from the Mol transaction, and another Ft 26.2 billion resulted from price losses. The general government held 4.5% of listed shares at the end of June, compared to 7.7% at the end of March. Financial companies' share holdings increased Ft 43.2 billion to Ft 517.8 billion in Q2 as the result of net purchases of Ft 95.1 billion and price losses of Ft 51.9 billion. The sector's share of the BSE's market capitalization rose 1.2 percentage points to 6.6% during the period.

Non-financial companies owned Ft 462.7 billion worth of shares at the end of June. The Ft 228.3 billion increase from the end of March reflects mostly the Mol transaction. The sector's net purchases came to Ft 243.2 billion, of which the purchase by Mol of its shares from the state accounted for Ft 237.2 billion. Non-financial companies had price losses on their shares of Ft 12.6 billion and the Domus delisting resulted in a further 2.3 billion drop. The sector's share of all shares rose 3.5 percentage points to 6.6% during the period. Households' stock of listed shares rose Ft 10.9 billion to Ft 285.8 billion in the second quarter as the result of net purchases of Ft 39.4 billion and prices losses of Ft 28.5 billion. Households' share of the BSE's market capitalization increased half a percentage point to 4.1% during the period. The Budapest blue-chip index BUX fell 3.9% from the end of March to 22,160.75 at the end of June, and the mid-cap index BUMIX fell 4.7% to 2,121.48. Both indices peaked in late April, just after the governing Socialist-liberal coalition was reelected, with the BUX rising above 25,400 and the BUMIX above 2,300. But the BUX slipped under 18,500 and the BUMIX past 1,800 after the announcement of the government's austerity program in mid-June. (