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CEE MARKETS-OTP Bank leads stocks higher as German shares rebound
October 4, 2016 / 1:27 PM / in a year

CEE MARKETS-OTP Bank leads stocks higher as German shares rebound

* JP Morgan lifts target for OTP Bank shares
    * Polish stock index up on clothes retailer LPP, insurer PZU
    * Currencies, bonds ease slightly, Fed rate hike in prospect
    * Czech minister says exit from crown cap should be cautious

 (Adds insurer PZU stocks rise, updates prices)
    By Sandor Peto
    BUDAPEST, Oct 4 (Reuters) - Budapest led a firming of
Central European stock markets on Tuesday, with OTP Bank
 rising to a two-week high after JP Morgan lifted its
target price for the shares.
    Shares in OTP, the region's biggest independent lender, rose
2.9 percent to 7,481 forints ($27.17) by 1305 GMT, after JP
Morgan boosted its target to 9,570 forints from 7,310 forints.
    Stocks on the Frankfurt bourse, reopening after a
public holiday, reflected improved sentiment over Deutsche Bank
, whose problems cast gloom on Europe's banking sector
last week.
    Deutsche shares firmed to a two-week high from a record low
hit on Friday, on prospects of a swift deal with U.S.
authorities over a multi-billion dollar fine. 
    OTP, heading towards 8-1/2-year highs reached last month,
helped Budapest's stock index gain 1.8 percent.
    Warsaw's bluechip index drew extra support from a
surge of more than 20 percent by Poland's biggest clothing
retailer LPP. Its shares hit 2-month highs after it
reported a 20 percent rise in revenue in September on Monday.
    Shares in PZU, the region's biggest insurer, jumped
almost 5 percent after it said it would pay out at least 50
percent of earnings as dividend in the 2016-2020 period. 
    Sentiment in regional markets remained underpinned by a rise
in September manufacturing activity indices in  Hungary, the
Czech Republic and Poland, shown in figures released on Monday.
    But currencies and government bonds were treading water. The
forint was flat against the euro, the leu 
eased 0.2 percent and the zloty firmed 0.1 percent.
    Hungarian bond yields rose 1-2 basis points due to hawkish
comments from a Federal Reserve setter, one Budapest-based fixed
income trader said.
    Cleveland Fed President Loretta Mester said the Fed should
not delay in raising interest rates in order to keep up with the
economy. A rise in U.S. rates could make Central European debt
yields relatively less interesting.
    The Czech crown's euro exchange rate implied in six-month
forwards was flat at 26.905.
    The Czech central bank has been keeping the spot crown rate
 on the weaker side of 27 since 2013 and last week
shifted the earliest possible end to the policy until the second
quarter of next year, while reaffirming it expected to refloat
the crown in mid-2017.
    Industry Minister Jan Mladek said the bank should ensure it
does not shock the economy when it eventually exits the
intervention regime next year.     
           CEE      SNAP   AT  1505       
           MARKETS  SHOT  CET         
                    CURRENCIES            
                    Late  Prev  Dail  Chan
                    st    ious  y     ge
                    bid   clos  chan  in
                          e     ge    2016
 Czech     <EURCZK  27.0  27.0   +0.  -0.0
 crown     =>        210   245   01%    9%
 Hungary   <EURHUF  307.  307.  -0.0  2.28
 forint    =>       6200  4550    5%     %
 Polish    <EURPLN  4.29  4.29   +0.  -0.8
 zloty     =>         40    85   10%    4%
 Romanian  <EURRON  4.46  4.45  -0.1  1.32
 leu       =>         00    30    6%     %
 Croatian  <EURHRK  7.50  7.49  -0.0  1.77
 kuna      =>         60    95    9%     %
 Serbian   <EURRSD  122.  123.   +0.  -1.1
 dinar     =>       9300  0300   08%    9%
 Note:     calcula  prev  clos  1800      
 daily     ted      ious  e at  CET   
 change    from                       
                    STOC                  
                    KS                
                    Late  Prev  Dail  Chan
                    st    ious  y     ge
                          clos  chan  in
                          e     ge    2016
 Prague             877.  868.   +0.  -8.2
                      03    59   97%    9%
 Budapest           2852  2801   +1.   +19
                    8.41  2.37   84%  .26%
 Warsaw    <.WIG20  1749  1725   +1.  -5.8
           >         .57   .44   40%    9%
 Buchares           6956  6956  -0.0  -0.6
 t                   .20   .48    1%    9%
 Ljubljan  <.SBITO  741.  733.   +1.   +6.
 a         P>         00    39   04%   44%
 Zagreb    <.CRBEX  1951  1942   +0.   +15
           >         .68   .94   45%  .51%
 Belgrade  <.BELEX  640.  636.   +0.  -0.5
           15>        42    28   65%    7%
 Sofia     <.SOFIX  509.  507.   +0.   +10
           >          45    07   47%  .53%
                    BOND                  
                    S                 
                    Yiel  Yiel  Spre  Dail
                    d     d     ad    y
                    (bid  chan  vs    chan
                    )     ge    Bund  ge
                                      in
 Czech                                spre
 Republic                             ad
   2-year  <CZ2YT=  -0.5  -0.0   +01  -1bp
           RR>        79    07  1bps     s
   5-year  <CZ5YT=  -0.1  0.02   +04   +3b
           RR>        75     5  0bps    ps
           <CZ10YT  0.26  0.02   +03   +2b
 10-year   =RR>        9        6bps    ps
 Poland                                   
   2-year  <PL2YT=  1.74  -0.0   +24  -2bp
           RR>         1    18  3bps     s
   5-year  <PL5YT=  2.30  -0.0   +28   +0b
           RR>         6     1  8bps    ps
           <PL10YT  2.88  -0.0   +29  -1bp
 10-year   =RR>        5    04  8bps     s
           FORWARD  RATE  AGREEMENT       
                    3x6   6x9   9x12  3M
                                      inte
                                      rban
                                      k
 Czech     <CZKFRA  0.28  0.25  0.22     0
 Rep       ><PRIBO                    
           R=>                        
 Hungary   <HUFFRA  0.73  0.71  0.72  0.88
           ><BUBOR                    
           =>                         
 Poland    <PLNFRA   1.7  1.67  1.65  1.71
           ><WIBOR                    
           =>                         
 Note:     are for                        
 FRA       ask                        
 quotes    prices                     
 *****************************************
 *********************
 ($1 = 275.3300 forints)

 (Additional reporting from Jason Hovet in Prague; Editing by
Mark Trevelyan)

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