* Stocks mostly drop on corporate news, EU sentiment
* Warsaw's PZU leads equities decline
* Currencies, bonds shrug off Draghi's dovish comments
(Adds Slovenian finance minister offering to resign, forint's
fall against the zloty)
By Sandor Peto
BUDAPEST, May 30 Warsaw led a retreat in central
European shares as investors, underwhelmed by dividend payments
and takeover offers announced by some companies on Tuesday,
booked profits from the multi-year highs of recent weeks.
Worries over a potential early election in Italy weighed on
investor sentiment across Europe, though the main impact was on
bank shares in the European Union.
Central Europe's main equities indices reached multi-year
highs earlier this month, helped by reports of good
first-quarter earnings and dividend payments.
Bucharest retained its momentum and again set a new
nine-year high on Tuesday, but Warsaw had shed 1.2
percent and Prague 0.6 percent by 1242 GMT.
The decline in Warsaw was led by PZU, the biggest
Polish insurer, whose stocks fell 2.6 percent after it said it
would pay a dividend of 1.4 zlotys ($0.3740) per share.
PZU shares hit two-year highs last week.
"The market seems to be disappointed by the amount of
dividend," said Jaroslaw Janusz, broker at Nobel Securities.
An announcement by Polish pensions fund Aviva OFE that it
had reduced its stake in PZU to below 5 percent may also be
driving shares lower, Janusz said.
Polish state-run energy firm PGNiG also shed 3
percent after surging last week due to good first-quarter
Regional currencies were mixed and government bonds mostly
The yield on Slovenia's 10-year bonds touched 11-month
highs, and had jumped to 1.286 percent by 1250 GMT from Monday's
0.958 percent, after Finance Minister Mateja Vranicar Erman
offered to step down.
Prime Minister Miro Cerar did not accept Erman's
Regional markets shrugged off comments from European Central
Bank head Mario Draghi that the euro zone still needs
substantial stimulus given that growth is improving but
inflation remains subdued.
In past years, such dovish comments would often have lifted
government bonds and currencies.
The forint had eased 0.1 percent and the zloty
firmed 0.3 percent against the euro by 1242 GMT, with
the Hungarian currency falling to a 2-week low against the
"I do not rule out forint/zloty cross trades, but even trade
in the euro is very thin," one dealer said, adding the next
event that could set direction for regional currencies could be
the publication of U.S. payrolls data on Friday.
"Weak figures pointing to no Fed rate hike in June could in
theory help the forint, but if it causes uncertainty, even the
opposite could happen," the dealer said.
CEE MARKETS SNAPSH AT 1442 CET
Latest Previo Daily Change
bid close change in
Czech crown 26.470 26.500 +0.11 2.03%
0 0 %
Hungary 308.30 308.00 -0.10% 0.17%
forint 00 50
Polish zloty 4.1730 4.1841 +0.26 5.53%
Romanian leu 4.5670 4.5658 -0.03% -0.70%
Croatian kuna 7.4200 7.4145 -0.07% 1.82%
Serbian dinar 122.52 122.67 +0.12 0.68%
00 00 %
Note: daily calculated previo close 1800
change from us at CET
Latest Previo Daily Change
close change in
Prague 1007.2 1012.9 -0.56% +9.29
5 0 %
Budapest 34259. 34138. +0.35 +7.05
02 11 % %
Warsaw 2296.0 2323.5 -1.18% +17.8
7 8 7%
Bucharest 8717.8 8673.5 +0.51 +23.0
2 0 % 5%
Ljubljana 782.22 785.95 -0.47% +9.01
Zagreb 1847.6 1853.4 -0.31% -7.38%
Belgrade 719.15 717.64 +0.21 +0.25
Sofia 655.31 655.51 -0.03% +11.7
Yield Yield Spread Daily
(bid) change vs change
2-year -0.16 0.023 +055b +1bps
5-year -0.087 -0.024 +034b -4bps
10-year 0.744 -0.015 +044b -2bps
2-year 1.922 -0.053 +263b -6bps
5-year 2.701 0.007 +312b -1bps
10-year 3.28 0.007 +298b +0bps
FORWARD RATE AGREEMENT
3x6 6x9 9x12 3M
Czech Rep <PR 0.36 0.42 0.49 0
Hungary <BU 0.18 0.22 0.28 0.15
Poland <WI 1.752 1.769 1.807 1.73
Note: FRA are for ask
(Additional reporting by Bartosz Chmielewski in Warsaw; Editing
by Raissa Kasolowsky and Mark Potter)