February 21, 2017 / 10:15 AM / 9 months ago

CEE MARKETS-Bucharest stocks hit 9-year high, banks perform well

    * Bucharest stocks at 9-year high, Banca Transilvania record
high
    * Budapest shares set record high again, driven by OTP Bank
    * Banks prospects have improved in region

    By Sandor Peto
    BUDAPEST, Feb 21 (Reuters) - Bucharest stocks hit a 9-year
high on Tuesday, driven by surging Banca Transilvania
as bank stocks fuelled a rally in Central European equities
markets.
    The region's stocks have tracked the gains in global
equities in the past weeks as new U.S. President Donald Trump
has pledged domestic economic stimulus.
    The rally lost momentum in the past days. Some indices in
the region like Prague and Zagreb trod water on
Tuesday.
    But Warsaw regained strength, well outperforming
Western Europe's main markets. Having risen 1.3
percent by 0911 GMT, it approached 18-month highs set last week
when it was helped by earnings reports from some major banks.
    Budapest, which has been moving in record-high
territory since November, set another record, rising 0.4
percent, with OTP Bank shares gaining 0.6 percent.
    Bucharest rose 0.8 percent to its highest levels
since June 2008.
    It was driven by the gains of OMV Petrom, the
unit of Austrian oil group OMV, and Banca Transilvania
whose shares hit a record high, rising 1.9 percent.
    Petrom reported profits for 2016 last week, after a loss in
2015.
    Banca Transilvania shares have been rising since it reported
its results last week. Net profits fell last year after a
one-off surge in 2015, but other indicators including the ratio
of non-performing loans improved.
    Romania's banking sector profits mildly dropped last year to
4.2 billion lei ($981.19 million), but the negative impact of
two bills launched last year, including one on the conversion of
Swiss franc loans, will be lower than expected, Raiffeisen
analyst Silvia Rosca said.
    "The cleanup of balance sheets of banks continued in 2016
resulting in a decline of NPLs ratio to 9.5 percent in December
2016 from 13.5 percent in December 2015," she added.
    The prospects of banks have improved across the region.
    Hungary cut its bank tax last year. Poland's ruling party
has softened its unfriendly rhetoric over banks and some
investors speculate that a rise in Polish interest rates
expected for 2018 could lift bank revenues.
    In contrast, the ruling Czech Social Democrats put a
proposal for a special tax on banks on its election campaign
agenda earlier this month.
    But it is uncertain whether this plan will be carried out. 
    The stocks of Czech lender Komercni Banka have
been hovering around 18-month highs since it reported a rise in
fourth-quarter net profit earlier this month. The stock eased
0.6 percent on Tuesday.
    
              CEE        SNAPS   AT  1011          
              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  -0.06
                            30     20     0%      %
 Hungary                 307.5  308.0   +0.1  0.40%
 forint                    900    700     6%  
 Polish                  4.314  4.314   +0.0  2.06%
 zloty                       8      8     0%  
 Romanian                4.518  4.522   +0.0  0.37%
 leu                         5      1     8%  
 Croatian                7.449  7.448  -0.01  1.42%
 kuna                        0      5      %  
 Serbian                 123.6  123.8   +0.1  -0.25
 dinar                     600    100     2%      %
 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                  973.9  973.3   +0.0   +5.6
                             7      2     7%     8%
 Budapest                34099  33973   +0.3   +6.5
                           .40    .59     7%     5%
 Warsaw                  2220.  2192.   +1.2   +14.
                            93     79     8%    02%
 Bucharest               7855.  7796.   +0.7   +10.
                            41     14     6%    87%
 Ljubljana               767.9  764.1   +0.4   +7.0
                             4      7     9%     2%
 Zagreb                  2226.  2222.   +0.1   +11.
                            32     97     5%    60%
 Belgrade     <.BELEX15  708.5  711.8  -0.47  -1.24
              >              0      1      %      %
 Sofia                   610.5  608.2   +0.3   +4.1
                             3      8     7%     1%
                         BONDS                     
                         Yield  Yield  Sprea  Daily
                                       d      
                         (bid)  chang  vs     chang
                                e      Bund   e in
 Czech                                        sprea
 Republic                                     d
   2-year     <CZ2YT=RR  -0.47  -0.05   +038  -4bps
              >              5      9    bps  
   5-year     <CZ5YT=RR  0.191  -0.01   +067  -1bps
              >                     2    bps  
   10-year    <CZ10YT=R  0.639  -0.01   +033  -2bps
              R>                    1    bps  
 Poland                                            
   2-year     <PL2YT=RR  2.246  0.003   +311   +2bp
              >                          bps      s
   5-year     <PL5YT=RR  3.185  0.007   +367   +1bp
              >                          bps      s
   10-year    <PL10YT=R  3.836  -0.00   +352  -2bps
              R>                    3    bps  
              FORWARD    RATE   AGREEMENT          
                         3x6    6x9    9x12   3M
                                              inter
                                              bank
 Czech Rep            <   0.27    0.3   0.35      0
              PRIBOR=>                        
 Hungary              <   0.37   0.55   0.69   0.24
              BUBOR=>                         
 Poland               <  1.775  1.805   1.89   1.73
              WIBOR=>                         
 Note: FRA    are for                              
 quotes       ask                             
              prices                          
 **************************************************
 ************
 ($1 = 4.2805 lei)

 (Reporting by Sandor Peto)
  
 
 

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