BUX further down on Swiss exchange rate cap scrap

Telco

The Budapest Stock Exchange's main BUX index finished down 2.36% at 15,686.69 Thursday, the lowest since June, 2009, after falling 0.46% Wednesday. It is down 5.70% from year-end, after losing 10.40% last year. The Budapest parquet fell for a fifth consecutive day after the Swiss National Bank scrapped its exchange rate cap to the euro, sending a shockwave through global markets.

While Western markets turned around, and rose by the afternoon, on expectation that the timing of the Swiss move pointed to an early start of the ECB's hoped-for quantitative easing already next week, the BUX could not follow suit mainly on a plunge of OTP which, at its intraday low, was the weakest since August 2012.

Although government and analysts alike hurried to emphasise that the impact of the Swiss move was by and large mitigated by the conversion of forex home loans into forint debts at exchange rates fixed already in December, investors were not all convinced that OTP's non-performing loan stock would not increase due to other household and corporate forex debts.

MOL's fall accelerated by the end of the trade while Brent oil fell again after two days of gains.

The only winner among blue-chips was Richter for most of the day as the forint's depreciation against major currencies and against the Russian rouble, too, in the wake of the Swiss move improved the prospects for its exports, but it also fell by the end of the day in cautious profit taking while the forint convalesced.

The sudden fall of the the Hungarian currency also distanced the possibility that the National Bank of Hungary (MNB) could chip in some further rate cuts any time soon to help the economy.

OTP lost 3.36% to HUF 3,479 on turnover of HUF 14.53 bln from a HUF 18.07 bln session total, more than twice of the daily average last year.

MOL fell 3.11% to HUF 10,895 on turnover of HUF 1.62 bln.

Magyar Telekom sank 2.37% to HUF 330 on turnover of HUF 375 mln.

Richter retreated 0.03% to HUF 3,395 on turnover of HUF 1.17 bln.

The bourse's mid-cap BUMIX went out 2.20% lower at 1,404.24.

Elsewhere in the region, the WIG 20 in Warsaw was down 2.32%, while Prague's PX dropped 1.39%. Western Europe's major indices were all up ahead of their close Thursday, FTSE-100 in London 1.36%, DAX30 in Frankfurt 1.94%, and CAC40 in Paris 2.18%.

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