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CEE MARKETS-Polish bank stocks retreat on new dividend rules
November 24, 2017 / 3:48 PM / 24 days ago

CEE MARKETS-Polish bank stocks retreat on new dividend rules

    * Warsaw bank stocks ease as Poland regulates dividends
    * Romanian PM slams central bank for letting leu weaken
    * Leu drifts off record lows for now, pressure may return

 (Recasts with new rules on bank dividends from regulator)
    By Sandor Peto and Bartosz Chmielewski
    BUDAPEST/WARSAW, Nov 24 (Reuters) - Polish bank stocks
retreated on Friday from 2-1/2 year highs after KNF, the
country's financial market regulator set new leverage rules
which may limit bank's dividend payments.
    The index of listed bank stocks in Warsaw dropped
0.8 percent by 1511 GMT.
    The bourse's blue-chip index fell even more, one
percent, underperforming regional peers, as Poland's
heavy-weight PKN Orlen, a volatile stock, led a fall of
oil company shares in the region, shedding 2.6 percent.
    The shares of Poland's biggest commercial bank PKO BP
 eased half a percent.
    The bank said that it may pay out up to 25 percent of its
2017 net profit as dividend, taking into account KNF's new
    "The real reaction (in bank share prices) should be expected
early next week, because banking analysts are still working
intensively on the new rules' interpretation," said BZ WBK
broker Slawomir Kozlarek.  
    Elsewhere in Central Europe, the shares of Romania's
second-biggest bank, Banca Transylvania rose by
almost 1 percent after it said it had reached an agreement with
Greece's Eurobank to buy its Romanian unit Bancpost.

    Regional stocks, after directionless trade this month, were
mixed, just like currencies.   
    The leu rebounded from an initial easing, trading
at 4.6415 against the euro, drifting off record lows set earlier
this week at 4.6585.
    For now it ignored a new clash between the government and
the central bank (NBR).
    Romanian Prime Minister Mihai Tudose criticised the bank for
not intervening to stop the currency's slide.
    It weakened in the past weeks due to concern over budget
spending, a ballooning trade deficit, rising inflation,
corruption cases and a controversial judiciary reform.
    It also got hit by a shift in the NBR's policy focus to
market interest rates from the currency exchange rate which it
had kept in relatively narrow ranges for years.
    Just two months ago, premier Tudose criticised the NBR for a
rise in interbank interest rates amid a liquidity squeeze.
    The leu's weakness was a result of the shift in focus in the
NBR's policies on keeping market interest rates close to its
benchmark rate, intended to control inflation more effectively.
    "It is hard to foresee the interest rate path in that
overheated economy. It is not unsustainability, but the risks
are priced in the form of risk premia," one Budapest-based
trader said.
    One Bucharest-based dealer said Tudose's criticism was not
surprising, adding that the leu was not expected to weaken past
4.7 against the euro before Christmas, but may reach new record
               CEE MARKETS  SNAPSH   AT  1611 CET         
                            Latest  Previo  Daily   Change
                            bid     close   change  in
 Czech crown                25.450  25.423  -0.10%   6.12%
                                 0       5          
 Hungary                    311.71  312.37   +0.21  -0.93%
 forint                         00      00       %  
 Polish zloty               4.2103  4.2055  -0.11%   4.60%
 Romanian leu               4.6415  4.6526   +0.24  -2.29%
 Croatian                   7.5610  7.5645   +0.05  -0.08%
 kuna                                            %  
 Serbian                    119.40  119.39  -0.01%   3.31%
 dinar                          00      00          
 Note: daily   calculated   previo  close   1800          
 change        from         us      at      CET     
                            Latest  Previo  Daily   Change
                                    close   change  in
 Prague                     1054.5  1046.0   +0.81   +14.4
                                 1       3       %      2%
 Budapest                   39795.  39962.  -0.42%   +24.3
                                58      72              5%
 Warsaw                     2479.1  2503.9  -0.99%   +27.2
                                 3       3              7%
 Bucharest                  7784.9  7778.6   +0.08   +9.88
                                 6       9       %       %
 Ljubljana                  782.95  781.69   +0.16   +9.11
                                                 %       %
 Zagreb                     1859.9  1865.6  -0.30%  -6.76%
                                 2       0          
 Belgrade                   739.41  736.19   +0.44   +3.07
                                                 %       %
 Sofia                      667.37  667.91  -0.08%   +13.8
                            Yield   Yield   Spread  Daily
                            (bid)   change  vs      change
                                            Bund    in
 Czech                                              spread
   2-year                    0.394   0.071   +109b   +8bps
   5-year                    0.987   0.035   +131b   +3bps
   10-year                    1.77   0.012   +141b   -1bps
   2-year                    1.541   0.007   +224b   +1bps
   5-year                    2.545   0.019   +287b   +1bps
   10-year                   3.338   0.022   +297b   +1bps
               FORWARD      RATE    AGREEMENT             
                            3x6     6x9     9x12    3M
 Czech Rep             <PR    1.03    1.21    1.34       0
 Hungary               <BU    0.08    0.09    0.13    0.03
 Poland                <WI    1.79    1.82    1.92    1.73
 Note: FRA     are for ask                                
 quotes        prices                               
 (Additional reporting by Luiza Ilie in BucharestEditing by
Peter Graff)

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