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Hungary’s BÉT may face 25% trade slump on pension grab, operator says

Hungarian stock turnover may drop as much as 25% this year as the transfer of private pension savings to the state cuts share supply and drives investors away, Bloomberg reported, citing Michael Buhl, the head of the CEE Stock Exchange Group.

The group, which operates the Budapest Stock Exchange and equity markets in Vienna, Prague and Ljubljana, previously expected a 5% trading slump in Hungary. The transfer of the pension funds, worth about 10% of gross domestic product, will be completed in June.

The funds held HUF 3 trillion, including shares in domestic and international companies. "If the pension funds stay away because these stakes are simply not available any more, then of course all the stocks become less liquid, less tradable and less attractive," Buhl said. "This seems to be the case for the time being."

The amount of shares bought and sold in Budapest fell to HUF 19 billion per day last month from HUF 22 billion a year earlier, the lowest April turnover since 2008, according to data on the bourse's website. March turnover fell an annual 53% to HUF 14.3 billion.