BUX lingers around breakeven in very thin trade

Telco

The Budapest Stock Exchangeʼs main BUX index finished down 0.52 points at 21,335.27 Monday after falling 1.15% Friday. It is up 28.26% from year-end, after losing 10.40% last year. Over last week, it edged up 0.01% after plunging 3.55% in the previous week.

The Budapest bourse hovered a tad above Fridayʼs close for most of the day with the help of euro zone markets, only to turn slightly red in the final minutes of trade after late afternoon official statistics showed budget deficit by the end of August was 4% larger than the annual target.

Volumes were unusually small as international investors apparently took a day off as markets remained closed in the US for the Labor Day holiday.

News that at other times invigorate or subdue the domestic stock market failed to have an impact in the circumstances while developments in the migrant crisis and the bad international press Hungaryʼs government is getting for its handling the issue remained in media focus.

In one of the harshest comments, The Guardian in the UK said in an editorial headlined "Orbán the awful" (referring to Hungarian prime minister Viktor Orbán) that "EU institutions have failed in the past to hold him accountable for trampling on Europe’s values – now is the time to do so" "After years of disdain for democracy and European solidarity, Budapest is making life harder for desperate people fleeing war zones. The rest of the continent must stand up against this rotten regime," The Guardian said.

In domestic news, local newspaper Magyar Idők quoted a Tesco supermarket chain official as saying Tesco was ending night shifts at its stores in Hungary. The move is expected to affect about 4,000 staff in the country, reducing take-home pay by HUF 18,000-20,000 a month, the paper said. While Tesco is generally in the process to narrow its global presence, the decision in Hungary probably also reflects the effect of the mandatory Sunday shop closure in force since March, and special levies on food trade, which trims turnover and revenue in foreign-owned supermarkets, analysts add.

Croatia began a retrial on Monday of former prime minister Ivo Sanader on corruption charges, including a case of a bribe allegedly taken from Hungarian oil firm MOL to allow it acquire a dominant stake in its Croatian peer INA in 2008. In July, Croatiaʼs Constitutional Court annulled two corruption convictions against Sanader, for which he received eight-and-a-half years in prison, citing procedural errors, and ordered the retrial. Sanader and MOL have denied any wrongdoing.

Meanwhile, MOL was up in light bargain hunting on Brentʼs initial price rise. By the time the Brent turned around and fell, the Budapest bourse was about to close.

At better times, drugmaker Richterʼs share could have profited from the companyʼs Monday announcement of European approvals and milestone payments totalling $2 mln for a drug for which it has an exclusive license in Europe, just like both it and OTP bank could have from a Sunday statement of IMF chief Christine Lagarde who urged creditors to back the debt restructuring deal struck with Ukraine at the end of August and lauded the countryʼs economic progress.

OTP lost 0,18% to HUF 5,450 on turnover of HUF 825 mln from a HUF 1.43 bln session total, a mere 15% of the daily average this year. MOL gained 0.44% to HUF 13,710 on turnover of HUF 254 mln. Magyar Telekom dropped 0.25% to 393 HUF on turnover of HUF 52 mln. Richter ended flat at HUF 4,230 on turnover of HUF 246 mln.

The bourseʼs mid-cap BUMIX went out 0.81% lower at 1,626.79.

Elsewhere in the region, WIG 20 in Warsaw was down 0.52%, while Pragueʼs PX fell 0.81%.

Western Europeʼs major indices were all up ahead of their close on Monday, FTSE100 in London 0.51%, DAX30 in Frankfurt 0.73%, and CAC40 in Paris 0.56%.

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