BUX down for a second day
The Budapest Stock Exchange's main BUX index finished down 1.52% at 18,210.19 Friday after dropping 0.41% Thursday. It is up 9.48% from year-end, after losing 10.40% last year. While eurozone indices climbed to new records albeit in week-end slow motion, the Budapest parquet accelerated its slide in profit taking, after a surge to more than five-month highs earlier in the week. Fresh data and analyses also soured mood.
Hit hard by provisioning for compensation for retail clients mandated under law, Hungarian credit institutions had a combined after-tax loss of HUF 446.5 bln last year, following after-tax profit of HUF 31.2 bln in 2013, National Bank of Hungary (NBH) statistics out on Friday showed.
Hungary's economy minister on Friday reminded banks that they were supposed to start settlements with their clients from Monday.
Erste Group's Hungarian operation returned to profit in the fourth quarter of last year, but the group's CEO expects profit for a whole year at the unit only next year as a result of Erste's agreement earlier this month with Hungary's government which involves the Hungarian state and the London-based EBRD to take 15-15% stakes each in Erste Bank Hungary, and the government to slash the banking tax gradually from next year over four years.
Hungary's largest, indigenous, high street bank, OTP should publish Q4 results next Friday, and first analysts' forecasts in portal Portfolio pencil in after-tax loss of HUF 3.5 bln after one-offs due mainly to the Ukrainian operation, after a positive HUF 1.4 bln a year ago and HUF 34.1 bln in Q3, from revenue falling 7% year-on-year and down 5% quarter-on-quarter. Before one-offs, analysts expect after-tax profit to grow from a year ago, but still sharply down from Q3.
After three months of slight annual rises, deflation hit again Hungarian producer prices in January, official statistics out Friday showed. Annual deflation prevailed for most of last year.
Meanwhile, another batch of statistics from the NBH showed net corporate borrowing continued to slow in January while corporate lending stock fell.
Hungary's economic growth is set to slow as investment momentum fades, Commerzbank said in a note on Friday. Fixed-asset investment growth slowed sharply to 1.9% on the year in Q4, from 16% in Q3, driven by declining public-sector investment. The bulk of the fall was due to a surge in EU-funded projects at end-2013. But, "a part of the deceleration is fundamental also as a huge boom in auto-sector investments is reaching its peak and the economy is unlikely to maintain this extreme capital expenditure momentum through 2015 unless the central bank were to extend its lending schemes to new sectors such as construction," Commerzbank added. Commerzbank forecasts a still healthy 2.5%-plus GDP growth rate for coming quarters but slower than the 3.5% growth of 2014.
OTP lost 1.38% to HUF 4,285 on turnover of HUF 4.83 bln from a HUF 8.77 bln session total, in line with the daily average this year.
MOL fell 2.56% to HUF 11,990 on turnover of HUF 1.63 bln.
Magyar Telekom rose 0.26% to HUF 383 on turnover of HUF 591 mln.
Richter retreated 1.75% to HUF 3,930 on turnover of HUF 1.50 bln.
The bourse's mid-cap BUMIX went out 0.45% higher at 1,504.39.
Over the week, the BUX added 1.10% after dropping 0.40% in the previous week.
OTP was flat after losing 1.95% last week.
MOL increased 2.26% after easing 1.47% the previous week.
Magyar Telekom garnered 2.41% after rising 0.54% last week.
Richter improved 0.77% after gaining 2.04% over the previous week.
The BUMIX lost 0.90% after gathering 1.26% last week.
Elsewhere in the region, the WIG 20 in Warsaw was up 0.15%, while Prague's PX sank 0.54%. Western Europe's major indices were all up ahead of their close Friday, FTSE-100 in London 0.21%, DAX30 in Frankfurt 0.53%, and CAC40 in Paris 0.61%.
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