Analysts do not expect the findings of the EU bank stress test to be revealed later on Friday to have a significant impact on the Hungarian market. It is unlikely that any Hungarian banks targeted in the probe would fail.
Experts queried by Világgazdaság Online say that the stress tests result to be made public later in the day will have no profound effects on Hungarian markets, with both OTP and FHB banks expected to pass.
Press reports say that only a handful of Spanish banks will be featured on the failure list. Even this highly-probable outcome would not spark a serious response, since Spain’s government already has a capitalization plan ready to implement to shore up troubled finance companies.
Regarding the possible Moody’s downgrade for Hungary, György Barta of CIB, Gergely Suppan of Takarékbank and Mátyás Kovács of Raiffeisen Bank agreed that the move is an exaggeration and reflects that the agency is behind the times.
The analysts pointed out that Moody’s surprised the markets with its announcement, especially considering that London-based analyst declared earlier in the week that there is no need to review Hungary’s Baa1 rating. The reason they attribute little importance to the downgrade specter is that Moody’s has the highest ranking of Hungary’s state debts.
Therefore they do not expect any other ratings houses to follow suits with downgrades and consequently do not predict the move to have a lasting impact.
After the Moody’s announcement the Budapest Stock Exchange as well as the forint took a major dive. (BBJ)