February 28, 2017 / 9:59 AM / 5 months ago

CEE MARKETS-MOL earnings hit Budapest shares, Hungarian central bank meets

7 Min Read

    * MOL earnings disappoint, Budapest stock index sets 8-week
low
    * Hungarian central bank is seen keeping policy unchanged

    By Sandor Peto
    BUDAPEST, Feb 28 (Reuters) - Weaker-than-expected earnings
from oil group MOL knocked Budapest stocks down
to an 8-week low on Tuesday, just a week after they hit record
highs.
    Hungary's forint was flat at 307.7 against the
euro at 0921 GMT, ahead of the meeting of the Hungarian central
ban, after briefly dipping 0.2 percent.
    The bank is seen keeping interest rates and its dovish
rhetoric unchanged despite a rise in inflation. The annual rate
jumped to 2.2 percent in January from 0.5 percent in December.
    "We will watch the (central bank's) comments, and any sign
of a worry over inflation and possible tighter policy could lift
the forint," one Budapest-based fixed income trader said.
    A mild firming of Hungarian government bonds over the past
few days has lost steam, the trader said.
    Raiffeisen analysts said in a note that Hungarian bonds
remained attractive, even though monetary tightening
expectations fuelled by the inflation rise could trigger
increased volatility. 
    "For the longer investment horizon, however, yield increases
should be manageable, esp. for longer tenors, whilst
shorter-maturity papers offer much more setback potential due to
their considerable distortion on the back of central bank
influence," analyst Wolfgang Ernst said.   
    Hungarian data showed a 20-percent slump in investments last
year.
    Investments are expected to pick up across the region this
year after a temporary slowdown of European Union funding
inflows last year.
    Inflation has also been also rising regionwide, but is not
seen breaching targets yet.
    The prospect of accelerating economic growth and bullish
sentiment in global stock markets have contributed to a rally of
regional equities this year which lost steam in the past week.
    Hungarian stocks hit record highs in November, also helped
by strong fundamentals for blue-chip companies.
    But they retreated from a new record high hit last week as
Magyar Telekom's earnings and dividend forecasts disappointed
investors and price target cuts for OTP Bank and drug
maker Richter triggered profit-taking.
    MOL's earnings report broke a rebound that started on Monday
with the group's stock down 3 percent after news that core
earnings were 139.6 billion forints in the fourth quarter of
2016, below analysts' 151.3 billion median forecast.

    The Budapest bourse's main stock index fell 1.3
percent, while Warsaw shed half a percent and Prague
 a third of a percent. 
    A 2.9 percent-surge in fuel retailer Petrol shares
boosted Ljubljana's stock index by more than 1
percent.  
              CEE        SNAPS   AT  1021          
              MARKETS    HOT    CET           
                         CURRENCIES                
                         Lates  Previ  Daily  Chang
                         t      ous           e
                         bid    close  chang  in
                                       e      2017
 Czech crown             27.02  27.02   +0.0  -0.05
                            10     45     1%      %
 Hungary                 307.7  307.6  -0.03  0.36%
 forint                    000    100      %  
 Polish                  4.319  4.312  -0.16  1.97%
 zloty                       0      2      %  
 Romanian                4.513  4.515   +0.0  0.49%
 leu                         0      5     6%  
 Croatian                7.431  7.427  -0.05  1.67%
 kuna                        0      5      %  
 Serbian                 123.7  123.9   +0.1  -0.30
 dinar                     200    300     7%      %
 Note: daily  calculate  previ  close  1800        
 change       d from     ous    at     CET    
                         STOCK                     
                         S                    
                         Lates  Previ  Daily  Chang
                         t      ous           e
                                close  chang  in
                                       e      2017
 Prague                  955.2  958.6  -0.35   +3.6
                             8      1      %     5%
 Budapest                32434  32872  -1.33   +1.3
                           .57    .11      %     5%
 Warsaw                  2198.  2210.  -0.54   +12.
                            24     26      %    85%
 Bucharest               8021.  8009.   +0.1   +13.
                            98     95     5%    22%
 Ljubljana               784.2  779.8   +0.5   +9.2
                             0      0     6%     8%
 Zagreb                  2215.  2229.  -0.63   +11.
                            30     39      %    05%
 Belgrade     <.BELEX15  717.1  716.7   +0.0  -0.03
              >              2      5     5%      %
 Sofia                   613.7  612.4   +0.2   +4.6
                             9      8     1%     7%
                         BONDS                     
                         Yield  Yield  Sprea  Daily
                                       d      
                         (bid)  chang  vs     chang
                                e      Bund   e in
 Czech                                        sprea
 Republic                                     d
   2-year     <CZ2YT=RR  -0.51  0.004   +039  -1bps
              >              9           bps  
   5-year     <CZ5YT=RR  0.119      0   +070   +0bp
              >                          bps      s
   10-year    <CZ10YT=R  0.606  0.031   +040   +3bp
              R>                         bps      s
 Poland                                            
   2-year     <PL2YT=RR  #VALU  0.028  #VALU   +2bp
              >           E!            E!        s
   5-year     <PL5YT=RR  #VALU  0.016  #VALU   +1bp
              >           E!            E!        s
   10-year    <PL10YT=R  #VALU  0.014  #VALU   +1bp
              R>          E!            E!        s
              FORWARD    RATE   AGREEMENT          
                         3x6    6x9    9x12   3M
                                              inter
                                              bank
 Czech Rep            <   0.26   0.27    0.3      0
              PRIBOR=>                        
 Hungary              <    0.3   0.48   0.59   0.23
              BUBOR=>                         
 Poland               <   1.78   1.78   1.87   1.73
              WIBOR=>                         
 Note: FRA    are for                              
 quotes       ask                             
              prices                          
 **************************************************
 ************
 
 (Editing by Louise Ireland)
  
 
 

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