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CEE MARKETS-Hungarian stocks hit record high after Moody's upgrade
November 7, 2016 / 10:33 AM / a year ago

CEE MARKETS-Hungarian stocks hit record high after Moody's upgrade

* U.S. Clinton win odds rise helps regional sentiment
    * Budapest stocks open at record high on Moody's upgrade
    * Forint retreats from 3-week high, Hungarian bonds flat

    By Sandor Peto
    BUDAPEST, Nov 7 (Reuters) - Budapest stocks rose to record
highs on Monday after Moody's lifted Hungary's credit rating to
investment grade last week, echoing similar upgrades by Fitch
and Standard and Poor's earlier this year.
    Budapest's main index gained 0.9 percent by 0830 GMT,
slightly off a record high hit at 30,321 points right after the
opening. The forint eased slightly on Monday, after firming
ahead of the expected Moody's upgrade on Friday.
    Central Europe's main equities markets mostly firmed and
government bonds moved sideways on Monday as Hillary Clinton
looked better placed to win Tuesday's U.S. presidential election
than Donald Trump. 
    A Trump victory could hit currencies in emerging markets and
that could also affect the European Union's eastern members,
mainly the volatile and liquid Polish zloty, analysts
said.
    The zloty firmed 0.1 percent against the euro by 0830 GMT,
while Hungary's forint weakened by 0.2 percent to
306.5. The Hungarian unit was giving up some room following a
surge to 3-week highs on Friday. 
    Moody's upgrade had been widely anticipated as Fitch and
Standard & Poor's had already lifted Hungary to investment grade
earlier this year.
    Hungarian government bond yields were unchanged from Friday.
    "The upgrade, the third this year, will definitely open the
purse of new investors. But such things do not happen overnight,
it will take some time," one Budapest-based fixed income trader
said.
    The upgrade could pave the way for a eurobond issue by
Hungary, Raiffeisen said in a note on regional markets.
    It can also make forint-denominated long-end bonds
attractive after a 20-25 basis-point rise in long-end yields in
the region in the past two weeks, driven by global factors,
analysts said.
    The bonds are a good buy particularly relative to the papers
of Romania, where wages can continue to surge around the Dec. 11
elections, Raiffeisen analyst Stephan Imre said.
    Romanian central bank governor Mugur Isarescu said on
Friday, after the bank decided to keep interest rates on hold,
that the 2017 government budget remained the main economic risk.
 
    The bank did not cut rates despite negative inflation, due
to the risk that further fiscal loosening can boost prices.
        
           CEE        SNAPSH   AT  1030 CET            
           MARKETS    OT                        
                      CURRENCIES                       
                      Latest  Previou  Daily    Change
                              s                 
                      bid     close    change   in 2016
 Czech                27.021  27.0245   +0.01%   -0.09%
 crown                     0                    
 Hungary              306.50  305.940   -0.18%    2.66%
 forint                   00        0           
 Polish               4.3250   4.3285   +0.08%   -1.55%
 zloty                                          
 Romanian             4.4985   4.4995   +0.02%    0.46%
 leu                                            
 Croatian             7.5160   7.5138   -0.03%    1.64%
 kuna                                           
 Serbian              122.95  122.910   -0.03%   -1.20%
 dinar                    00        0           
 Note:     calculate  previo  close    1800            
 daily     d from     us      at       CET      
 change                                         
                      STOCKS                           
                      Latest  Previou  Daily    Change
                              s                 
                              close    change   in 2016
 Prague               899.56   893.82   +0.64%   -5.94%
 Budapest             30290.  30017.2   +0.91%   +26.63
                          17        3                 %
 Warsaw               1779.2  1758.22   +1.20%   -4.30%
                           8                    
 Buchares             6803.1  6780.90   +0.33%   -2.87%
 t                         3                    
 Ljubljan             729.05   740.18   -1.50%   +4.73%
 a                                              
 Zagreb               1952.0  1946.98   +0.26%   +15.53
                           8                          %
 Belgrade  <.BELEX15  660.30   667.33   -1.05%   +2.52%
           >                                    
 Sofia                526.35   530.21   -0.73%   +14.20
                                                      %
                      BONDS                            
                      Yield   Yield    Spread   Daily
                      (bid)   change   vs Bund  change
                                                in
 Czech                                          spread
 Republic                                       
   2-year  <CZ2YT=RR  -0.802   -0.008  -017bps    -2bps
           >                                    
   5-year  <CZ5YT=RR  -0.173   -0.051   +024bp    -6bps
           >                                 s  
           <CZ10YT=R   0.472   -0.017   +031bp    -5bps
 10-year   R>                                s  
 Poland                                                
   2-year  <PL2YT=RR   1.813   -0.003   +244bp    -1bps
           >                                 s  
   5-year  <PL5YT=RR   2.488    0.008   +290bp    +0bps
           >                                 s  
           <PL10YT=R   3.052    0.002   +289bp    -3bps
 10-year   R>                                s  
           FORWARD    RATE    AGREEMENT                
                      3x6     6x9      9x12     3M
                                                interba
                                                nk
 Czech             <    0.28     0.25     0.24        0
 Rep       PRIBOR=>                             
 Hungary           <    0.65     0.64     0.65     0.77
           BUBOR=>                              
 Poland            <   1.725     1.72    1.715     1.72
           WIBOR=>                              
 Note:     are for                                     
 FRA       ask                                  
 quotes    prices                               
 ******************************************************
 ********
 
 (Additional reporting by Radu Marinas in Bucharest; editing by
Mark Heinrich)

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