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CEE MARKETS-Polish stocks drop on government change, Czech central bank meets
September 29, 2016 / 8:46 AM / a year ago

CEE MARKETS-Polish stocks drop on government change, Czech central bank meets

* Crude rise boost stocks, but Warsaw index eases
    * Government change weighs on Polish stock market sentiment
    * Czech central bank seen maintaining guidance on crown cap

    By Sandor Peto and Jason Hovet
    BUDAPEST/PRAGUE, Sept 29 (Reuters) - Warsaw's stock index
 eased on Thursday, bucking a rise in Central European
equities driven by rising crude prices,  after Poland's ruling
party firmed its grip on economic policy with a government
reshuffle announced late on Wednesday.
    The finance ministry will come under the supervision of
economy minister Mateusz Morawiecki, an ally of Jaroslaw
Kaczynski, the president of the Law and Justice Party which has
been ruling for 10 months.
    The party has stood for more government influence and less
foreign ownership in certain sectors including banks and more
government spending to stimulate economic growth.
    Warsaw's bluechip stock index shed a quarter of a
percent by 0830 GMT, while Budapest gained 1.5 percent,
Prague 1.1 percent and Bucharest 0.6 percent.
    A global rise in crude prices after oil producers agreed to
curb output drove gains in oil and energy utilities shares in
the world and Central Europe.
    The stocks of Polish state-run utilities joined the rise,
regaining some ground after a plunge last week amid speculation
over personnel changes in the government and the management of
the companies and news about extra tax burdens. 
    The stocks of the largest Polish utility PGE rose
by 1.6 percent, but half the shares in the index including mBank
 fell, pushing the lower.
    Elsewhere, Hungarian oil group MOL shares firmed
by 2.7 percent.
    Czech utility CEZ gained 3.4 percent even though 
longer-than-expected outages at its nuclear power plants have
weighed on its shares in recent weeks and may even force it to
lower its full-year guidance, J&T Banka analyst Bohumil Trampota
said.
    The Czech central bank is expected to reaffirm its pledge
after its meeting on Thursday to maintain its cap, which keeps
the crown weaker than 27 per euro at least until the
middle of 2017.
    Speculation that it may remove the cap earlier boosted the
crown rate implied in six-month forwards to 26.784
three weeks ago. Trading at 26.897 it was well off that level on
Thursday, steady from Wednesday.
    "On the forward market, the rate could continue in
additional gradual (crown) weakening," Komercni Banka analysts
said in a note.
    Czech 10-year bonds traded near record-low yields at 0.25
percent.
    Polish, Hungarian and Romanian government bond yields rose 
a few basis points, pushed up by the crude price rise.
    "Anyway, I expect good demand at today's (Hungarian) bond
auction," a Budapest-based fixed income trader said.  
   
     
           CEE      SNAP   AT  1030       
           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     =>        230   230   00%    9%
 Hungary   <EURHUF  308.  308.   +0.  2.14
 forint    =>       0400  3800   11%     %
 Polish    <EURPLN  4.29  4.29   +0.  -0.9
 zloty     =>         70    81   02%    1%
 Romanian  <EURRON  4.45  4.45  -0.0  1.52
 leu       =>         15    05    2%     %
 Croatian  <EURHRK  7.51  7.51  -0.0  1.60
 kuna      =>         90    75    2%     %
 Serbian   <EURRSD  123.  123.   +0.  -1.3
 dinar     =>       1400  2500   09%    6%
 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             876.  866.   +1.  -8.4
                      03    34   12%    0%
 Budapest           2788  2747   +1.   +16
                    9.51  6.40   50%  .59%
 Warsaw    <.WIG20  1730  1734  -0.2  -6.9
           >         .46   .59    4%    2%
 Buchares           6991  6946   +0.  -0.1
 t                   .52   .93   64%    8%
 Ljubljan  <.SBITO  736.  743.  -0.9   +5.
 a         P>         62    36    1%   81%
 Zagreb    <.CRBEX  1942  1940   +0.   +14
           >         .29   .03   12%  .95%
 Belgrade  <.BELEX  635.  633.   +0.  -1.3
           15>        51    84   26%    3%
 Sofia     <.SOFIX  519.  509.   +1.   +12
           >          13    92   81%  .63%
                    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  -3bp
           RR>        58    21  3bps     s
   5-year  <CZ5YT=  -0.1  -0.0   +03  -2bp
           RR>        95    06  9bps     s
           <CZ10YT  0.25  -0.0   +03  -3bp
 10-year   =RR>             01  7bps     s
 Poland                                   
   2-year  <PL2YT=  #VAL  0.00  #VAL   +0b
           RR>      UE!      7  UE!     ps
   5-year  <PL5YT=  #VAL  0.03  #VAL   +1b
           RR>      UE!         UE!     ps
           <PL10YT  #VAL  0.02  #VAL  -1bp
 10-year   =RR>     UE!      3  UE!      s
           FORWARD  RATE  AGREEMENT       
                    3x6   6x9   9x12  3M
                                      inte
                                      rban
                                      k
 Czech     <CZKFRA  0.28  0.24  0.21     0
 Rep       ><PRIBO                    
           R=>                        
 Hungary   <HUFFRA  0.72  0.71   0.7  0.88
           ><BUBOR                    
           =>                         
 Poland    <PLNFRA  1.72  1.69  1.68  1.71
           ><WIBOR                    
           =>                         
 Note:     are for                        
 FRA       ask                        
 quotes    prices                     
 *****************************************
 *********************
 
 (Reporting by Sandor Peto; Editing by Angus MacSwan)

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