BUX down on internet tax plan

Telco

The Budapest Stock Exchange's main BUX index finished down 1.12% at 17,298.24 Wednesday, after rising 0.91% Tuesday. It is down 6.82% from the end of last year, after it rose 2.15% in 2013. For the rest of the week the bourse will be closed due to a national holiday.

Bucking the European trend, the Budapest parquet returned to the descending track of the roller coaster of the last seven days.

Analysts quoted one single reason: the government's plan, revealed late Tuesday, to extend the telecommunications tax to internet services as well next year. The tax should be paid by service providers.

Professional associations and trade unions protested Wednesday, expressing fear of dismal effects for households, social advancement and the economy as a whole.

While the government expects around HUF 20 bln from the new tax, analysts calculated several times more than that if the plan remains unchanged.

Magyar Telekom alone could lose an additional HUF 10 bln, and it also increased uncertainty over whether the company will pay a dividend for 2014, analysts said.

In the general downturn, OTP faired relatively well after the government's tax plans also suggested that it might be able to offset a part of the special bank tax next year against impairments at its Ukrainian unit.

After hovering above the waterline for most of the day, MOL and Richter were also put in line in final, profit-taking, trades.

The government is to submit next year's budget to parliament next Tuesday.

OTP lost 0.71% to HUF 4,030 on turnover of HUF 1.68 bln from a HUF 4.38 bln session total, little more than half the daily average this year.

MOL slid 0.38% to HUF 11,715 on turnover of HUF 255 mln.

Magyar Telekom plunged 4.02% to HUF 334, a more than four-month low, on turnover of HUF 1.57 bln.

Richter retreated 1.22% to HUF 3,793 on turnover of HUF 727 mln.

The bourse's mid-cap BUMIX went out 0.18% lower at 1,458.39.

Elsewhere in the region, Warsaw's WIG20 was up 0.19%, while Prague's PX rose 0.30%. Western Europe's major indices were all up ahead of their close Wednesday, FTSE-100 in London 0.41%, DAX30 in Frankfurt 0.51%, and CAC40 in Paris 0.43%.

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