BUX down in final trades

A day-long rise turned into a fall in last-minute trades following news that Greece threatened bankruptcy if its international lenders do not provide fresh funds by the middle of next week, and euro zone indices slowed.

Earlier, accelerating manufacturing recovery in the euro zone that should spur growth in the CEE region, and fresh local data attesting to it outweighed ongoing local political worries and expectations for continuing deflation and lower company dividends that sent shares into a deep fall the previous day.

Hungaryʼs March manufacturing PMI came in above consensus with expansion speeding to a monthly pace not seen since 2007.

January foreign trade surplus, based on annual exports growth outpacing that of imports, was corrected upwards in a second reading on Wednesday. Annual exports growth in January lagged the pace in December, but slightly accelerated from the annual average last year, when imports grew faster than exports.

Fresh statistics also showed general budget deficit, well under the 3% to GDP threshold, was up slightly from 2013, but fell way short of the official target, while public debt decreased.

Hungaryʼs government could raise its 2.5% GDP growth projection for this year by the end of the month, when it must send its updated convergence program to Brussels, a state secretary at the National Economy Ministry said.

The good PMI figures signal that the German economic pickup drives the CEE region higher, local Takarekbank commented, adding that they expected economy to grow by 3.2% this year with upside risks, after a plus of 3.6% last year.

More cautious, Nomura still sees this yearʼs GDP growth for Hungary at 2.7%, but also with strong upside risks. The number could be closer to 3.5% if the government is indeed successful in its growth-boosting efforts, Nomura said in a note on Wednesday. The growth call remains supportive for long-maturity local-currency government bonds, it added. That said, Nomura warned that longer-term growth potential is in the 2.0-2.5% range as cheap central bank loans are invested "largely into activities that do not boost structural capacity." The house sees no reason to improve its view unless the banking sector becomes much more healthy and willing to lend aggressively to both corporates and households.

OTP lost 0.06% to HUF 5,301 on turnover of HUF 2.75n from a HUF 4.69 bln session total, a third short of the daily average this year.

With a 34.9% weighting in the BUX basket, OTP reached a near four-year closing high last Wednesday at HUF 5,440, up 42.74% since the end of last year. It ended Q1 with a gain of 39.18% on hopes of improving government-financial sector relationships, expanding local market, and less expected drag from Russia and Ukraine in the future.

MOL rose 0.37% to HUF 12,165 on turnover of HUF 1.19 bln.

With a weighting of 24.7%, it rose to a near seven-month closing high of HUF 12,495 on Thursday last week, 8.23% up year-to-date. It ended Q1 with a 4.98% gain, limited mainly by falling fuel prices.

Magyar Telekom ended flat at HUF 412 on turnover of HUF 292m.

Weighting 12.5% in BUX, it hit a 23-month closing high last Friday at HUF 417, up 23.37% from year-end. It finished Q1 with a gain of 21.89% on improving economic outlook in Hungary, its promise to renew dividend payment, and recurring rumors that it might be bought out by its majority owner, Deutsche Telekom.

Richter retreated 1.30% to HUF 3,800 on turnover of HUF 1.39 bln.

With 22.8% weighting in the BUX, it hit a six-month closing high last Thursday at HUF 4,020, up 13.72% from year-end. It ended Q1 with a gain of 8.91%, held down by its exposure to Russia and Ukraine.

The bourseʼs mid-cap BUMIX went out 1.24% higher at 1,536.25.

Elsewhere in the region, WIG 20 in Warsaw was down 0.14%, while Pragueʼs PX garnered 1.00%. Western europeʼs major indices were all up ahead of their close Wednesday, FTSE-100 in London 0.62%, DAX30 in Frankfurt 0.36%, and CAC40 in Paris 0.65%.