BUX falls further on Greece, Fed and Richter
The Budapest Stock Exchangeʼs main BUX index finished down 0.49% at 21,693.46 Tuesday after falling 0.36% Monday. It is up 30.42% from year-end, after losing 10.40% last year.
The Budapest parquet fell for a third day while European equities mostly recovered from a four-month low in the morning, as the Greek stalemate proved not to be the "end of the world," analysts said. Markets calmed but remained subdued in caution ahead of the US Fedʼs policy statement scheduled for Wednesday evening.
The main drag on BUX was Richter after an announcement of the US Food and Drug Administration (FDA) that it needed a three-month extension to complete its review of a key drug of the Hungarian pharma company. The move extends the uncertainty as to when the product could be marketed in the US.
Government optimism did not help the market. Economy Minister Mihaly Varga told a news conference that he expected corporate lending volumes to rise by 3-4% next year as a result of a HUF 60 bln cut in the special bank levy approved by parliament on Tuesday. But in present, weakening, trends there is nothing to presage an acceleration in market based lending, while large chunks of the tax cut will be eaten up by additional mandatory contributions of banks to the mutual deposit and investment insurance funds in the wake of several brokerages failures recently, and other bank funds will be invested into mortgage bonds from next year as mandated by the National Bank of Hungary (MNB), analysts say.
Meanwhile, slowing consumer demand growth could also limit companies willingness and ability to borrow, they add.
On Tuesday, figures on steeply slowing annual car registrations growth in Hungary in May attested again to tougher times coming, following a recent rack of data on deceleration in retail trade, industry and construction, coupled with inflation returning after eight months of deflation.
Other resources of growth also start to show signs of drying up. Hungaryʼs monthly current account in April, published by the MNB on Tuesday, came in with a surplus about half of that in March, due to trade surplus less than a third of that in March, a net outflow of direct investments instead a net inflow in March, and EU transfers narrowing to less than a third of those in the previous month.
OTP recovered after its CFO and a board member sold shares worth HUF 776m on Monday.
OTP won 0.48% to HUF 5,421 on turnover of HUF 2.71 bln from a HUF 5.62 bln session total, slightly more than half the daily average this year.
MOL dropped 0,69% to HUF 14,350 on turnover of HUF 510m.
Magyar Telekom ended flat at HUF 409 on turnover of HUF 286.
Richter plunged 3.19% to HUF 4,250 on turnover of HUF 1.59 bln.
The bourseʼs mid-cap BUMIX went out 4.78% higher at 1,650.01 as one of its constituents, hotel chain Danubius, got a buy-out offer from CP Holdings in the UK late on Monday, at a bid price more than 40% above its previous close. Danubius gained 43.11% on Tuesday to HUF 7,950.
Elsewhere in the region, WIG 20 in Warsaw was down 0.06%, while Pragueʼs PX increased 1.12%. Western Europeʼs major indices were all up ahead of their close Tuesday, FTSE100 in London 0.12%, DAX30 in Frankfurt 0.59%, and CAC40 in Paris 0.73%.
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