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6 months ago
CEE MARKETS-Budapest stocks retreat from record, Romanian bond yields rise
February 23, 2017 / 2:38 PM / 6 months ago

CEE MARKETS-Budapest stocks retreat from record, Romanian bond yields rise

    * Budapest stocks off record on OTP Bank, Magyar Telekom
retreat
    * Magyar Telekom guidance disappoints despite profit surge
    * Bucharest stocks at another 9-year high on Banca
Transilvania
    * Currencies, bonds rangebound ahead of auctions

 (Adds Romanian bond auction, Polish central bank minutes,
change in JP Morgan's indices)
    By Sandor Peto
    BUDAPEST, Feb 23 (Reuters) - Budapest stocks retreated from
record highs on Thursday, driven by Magyar Telekom
which opted against raising its dividend guidance while Central
European stock indices mostly rose.
    OTP, Hungary's biggest lender also retreated,
shedding 3.2 percent, following a week-long surge which saw the
stock hit its highest levels since 2007.
    Regional markets, which have tracked a worldwide rally of
equities in the past weeks, took a pause, with no new cues
coming from abroad and as investors reacted to earnings results.
    Magyar Telekom, the Hungarian unit of Deutsche Telekom
, said its fourth quarter profit leapt to 19.8 billion
 forint ($67.84 million) from 3.35 billion a year earlier,
partly due to tax changes.
    But it cited competitive and regulatory risks to growth this
year and projected a steady dividend in 2017 from 2016,
disappointing some investors who hoped for a rise, and prompting
a 2.9 percent fall in its share price. Budapest's main stock
index shed 1.6 percent by 1359 GMT.
    "The management's communication signals the importance of
caution over forecasts," Erste group analysts said in a note.
    Deutsche Telekom's Croatian unit, HT gained 4
percent after its earnings report showed a rise in revenues and
profits. The kuna firmed 0.2 percent
against the euro, hitting its strongest level since 2012. 
    Bank stocks were mixed in the region.
    The improved earnings and outlook of some banks have played
a key part in the regional equities rally in the past weeks.
    Shares in Romania's Banca Transilvania extended
their gains after a strong earnings report last week, rising 0.7
percent and lifting the Bucharest index to a new 9-year
high.
    Romanian long-term government bonds eased, bucking a drop in
yields elsewhere in the region. Romania sold the planned amount
of 10-year bonds at an auction, but the average yield rose to
4.07 percent from 3.96 percent in a sale four weeks ago.
    In a note before the auction, Raiffeisen confirmed its
"hold" recommendation for Romanian bonds, but said the risk of
budget deficit overshoots clouded the outlook.
    Poland's 10-year bond yield fell 7 basis points to 3.81
percent.
    The country's central bankers said interest rates might
remain unchanged in the coming quarters, according to the
minutes of their latest meeting. Most said the risk that
inflation would run persistently above target in the mid-term
was low.
    JP Morgan said it would move Czech crown-denominated bonds
to its GBI-EM emerging markets benchmark index from its
developed market indices.
    The yield on 5-year Czech bonds dropped 10 basis
points to 0.156 percent. 
              CEE        SNAPS   AT  1459          
              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     00     0%      %
 Hungary                 307.8  307.8   +0.0  0.33%
 forint                    000    700     2%  
 Polish                  4.302  4.301  -0.03  2.36%
 zloty                       5      2      %  
 Romanian                4.519  4.519   +0.0  0.35%
 leu                         0      5     1%  
 Croatian                7.430  7.447   +0.2  1.68%
 kuna                        0      5     4%  
 Serbian                 123.8  123.9   +0.0  -0.39
 dinar                     300    200     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                  967.4  972.7  -0.55   +4.9
                             0      2      %     7%
 Budapest                33580  34112  -1.56   +4.9
                           .28    .89      %     3%
 Warsaw                  2248.  2251.  -0.12   +15.
                            29     02      %    42%
 Bucharest               8056.  8035.   +0.2   +13.
                            42     25     6%    71%
 Ljubljana               776.9  771.6   +0.6   +8.2
                             6      7     9%     7%
 Zagreb                  2247.  2234.   +0.5   +12.
                            21     26     8%    65%
 Belgrade     <.BELEX15  717.1  714.2   +0.4  -0.03
              >              3      8     0%      %
 Sofia                   606.0  610.3  -0.71   +3.3
                             1      5      %     4%
                         BONDS                     
                         Yield  Yield  Sprea  Daily
                                       d      
                         (bid)  chang  vs     chang
                                e      Bund   e in
 Czech                                        sprea
 Republic                                     d
   2-year     <CZ2YT=RR  -0.49  0.005   +041   +1bp
              >              2           bps      s
   5-year     <CZ5YT=RR  0.156  -0.09   +071  -8bps
              >                     6    bps  
   10-year    <CZ10YT=R  0.607  -0.07   +036  -5bps
              R>                    1    bps  
 Poland                                            
   2-year     <PL2YT=RR  2.227  0.003   +313   +1bp
              >                          bps      s
   5-year     <PL5YT=RR  3.163  -0.06   +371  -5bps
              >                          bps  
   10-year    <PL10YT=R  3.823  -0.07   +358  -5bps
              R>                    6    bps  
              FORWARD    RATE   AGREEMENT          
                         3x6    6x9    9x12   3M
                                              inter
                                              bank
 Czech Rep            <   0.26   0.28    0.3      0
              PRIBOR=>                        
 Hungary              <   0.32   0.51   0.62   0.24
              BUBOR=>                         
 Poland               <   1.77   1.81   1.89   1.73
              WIBOR=>                         
 Note: FRA    are for                              
 quotes       ask                             
              prices                          
 **************************************************
 ************
 
 (Reporting by Sandor Peto; Editing by Richard Lough and Hugh
Lawson)
  
 
 

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