Tuesday, 08 September 2015 17:56
BELGRADE/BUDAPEST: Hungary’s main stock index underperformed its regional peers and fell nearly one percent on Tuesday, pushed down by oil major MOL.
MOL shares fell as much as 3 percent in early morning trade after the oil group said that recent well test results suggested the potential of its Akri-Bijeel exploration block in Iraq’s Kurdistan region had been greatly overestimated.
Erste Bank said in a note on Tuesday the Akri-Bijeel write-off will affect MOL’s third quarter results, predicting a one-off negative impact of between 500 and 1,000 forints per share. At 1014 GMT MOL shares traded at 13,365 forints, 2.5 percent down from Monday’s close.
Other stock exchange indices were slightly up, tracking the recovery of Asian and Western European stocks on Monday.
Regional currencies were little changed with investors focused on US markets which were closed on Monday.
US economic recovery affects investors’ sentiment towards Central and Eastern European economies. Federal Reserve rate hikes could make emerging market assets less attractive.
The Polish zloty, the region’s most liquid currency, inched down 0.04 percent to 4.235 to the euro.
Analysts expect it to trade sideways in the coming days.
“Proximity of the euro zone and the (ECB) quantitative easing, as well as decent economic growth, lead us to conclude that this relative outperformance will remain a rule rather than an exception,” mBank said in an analyst note.
Hungary’s forint shrugged off morning data on industrial output and annual inflation, which seem to suggest the economy could be slowing more than expected, and inched up 0.08 percent to 314.15 to the euro.
Serbia’s dinar was flat at 120.14, before a central bank policy meeting on Thursday.
“We expect a 50 basis points rate cut to 5.00 percent due to low inflation, poor growth and a moderately positive review of the International Monetary Fund agreement,” UniCredit said in a note.
“The IMF is likely to give Serbia a positive review after the government agreed to postpone increasing wages and pensions. This should go down well with investors, helping local bonds and preventing the depreciation of the currency,” it said.
