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CEE MARKETS-Warsaw leads stocks lower, Slovenian bonds fall as minister offers to resign
May 30, 2017 / 1:17 PM / 6 months ago

CEE MARKETS-Warsaw leads stocks lower, Slovenian bonds fall as minister offers to resign

    * 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 (Reuters) - 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
results. 
    Regional currencies were mixed and government bonds mostly
eased slightly.
    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
resignation.
    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
Polish currency.
    "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         
                             OT                      
                             CURRENCIES                    
                             Latest  Previo  Daily   Change
                                     us              
                             bid     close   change  in
                                                     2017
 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     
                             STOCKS                        
                             Latest  Previo  Daily   Change
                                     us              
                                     close   change  in
                                                     2017
 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%
                                  3       2          
 Belgrade                    719.15  717.64   +0.21   +0.25
                                                  %       %
 Sofia                       655.31  655.51  -0.03%   +11.7
                                                         5%
                             BONDS                         
                             Yield   Yield   Spread  Daily
                             (bid)   change  vs      change
                                             Bund    in
 Czech                                               spread
 Republic                                            
   2-year                     -0.16   0.023   +055b   +1bps
                                                 ps  
   5-year                    -0.087  -0.024   +034b   -4bps
                                                 ps  
   10-year                    0.744  -0.015   +044b   -2bps
                                                 ps  
 Poland                                                    
   2-year                     1.922  -0.053   +263b   -6bps
                                                 ps  
   5-year                     2.701   0.007   +312b   -1bps
                                                 ps  
   10-year                     3.28   0.007   +298b   +0bps
                                                 ps  
                FORWARD      RATE    AGREEMENT             
                             3x6     6x9     9x12    3M
                                                     interb
                                                     ank
 Czech Rep              <PR    0.36    0.42    0.49       0
                IBOR=>                               
 Hungary                <BU    0.18    0.22    0.28    0.15
                BOR=>                                
 Poland                 <WI   1.752   1.769   1.807    1.73
                BOR=>                                
 Note: FRA      are for ask                                
 quotes         prices                               
 **********************************************************
 ****
 
 (Additional reporting by Bartosz Chmielewski in Warsaw; Editing
by Raissa Kasolowsky and Mark Potter)
  
 
 

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