January 4, 2017 / 9:49 AM / 7 months ago

CEE MARKETS-MOL jumps 2 pct on upgrade, Hungarian stocks rally continues into 2017

7 Min Read

By Krisztina  Than
    BUDAPEST, Jan 4 (Reuters) - Shares of oil and gas group MOL
 jumped 2 percent on Wednesday after a hike in the
stock's target price, boosting the Budapest bourse, where a
rally has continued into the new year after a stellar
performance in 2016.
    Other regional stock markets were mixed, with Prague's main
index up a quarter of a percent but Poland's -
central and eastern Europe's most liquid market, which gained 5
percent last year, down a third of a percent in early trade.    
  
    Hungarian shares rose by a third in 2016, with
blue-chip names benefiting from the country's sound economic
fundamentals, a hike in Hungary's debt rating to investment
grade and an improvement in the banking sector. 
    Shares of OTP Bank, the region's biggest
independent lender, hit their highest level since early 2008,
before the global financial crisis, early on Wednesday, at 8,470
forints by 0919 GMT.  
    News that the Croatian government may buy MOL's stake in
Croatian oil company INA has boosted MOL's shares in the last
two weeks. 
    MOL and Zagreb have locked horns for years over control of
INA, and a potential end to the deadlock has triggered a relief
rally, Monika Kiss, an analyst at brokerage Equilor said.
    "This story has been eroding MOL's share price for years,"
she said, adding that some investors were also hoping for an
extraordinary dividend payout from MOL if it gets cash for its
INA stake. But she said the devil would be in the details of the
potential transaction and how well MOL can invest the money.
    Deutsche Bank raised its target price for MOL to 24,300 from
20,800 earlier on Wednesday. MOL traded 2.15 percent higher at
21,350 forints at 0912 GMT, pushing the stock marker index 0.7
percent higher.
    "The rally (in Hungarian stocks) could continue this year,
but I think it won't last for 12 months," Kiss said.
    In currency markets, Poland's zloty briefly hit an
eight-week high early on Wednesday and was 0.1 percent firmer by
mid-morning. 
    "As long as... data releases from the global economy remain
good, the zloty could likely stay relatively strong," BZ WBK
analysts said in a note.    
    Investors are awaiting reviews of Poland's credit ratings by
Moody's and Fitch which are scheduled for Jan. 13. 
    The zloty and Polish bonds suffered last year from conflict
between Poland's new nationalist-minded government and European
institutions, as well as market worries over political stability
and the country's fiscal standing.
     
    
               CEE MARKETS  SNAPSH   AT  1015 CET         
                            OT                      
                            CURRENCIES                    
                            Latest  Previo  Daily   Change
                                    us              
                            bid     close   change  in
                                                    2017
 Czech crown                27.020  27.025   +0.02  -0.05%
                                 0       5       %  
 Hungary                    308.82  308.95   +0.04   0.00%
 forint                         00      50       %  
 Polish zloty               4.3900  4.3948   +0.11   0.32%
                                                 %  
 Romanian leu               4.5205  4.5228   +0.05   0.32%
                                                 %  
 Croatian                   7.5680  7.5655  -0.03%  -0.17%
 kuna                                               
 Serbian                    123.32  123.43   +0.09   0.02%
 dinar                          00      00       %  
 Note: daily   calculated   previo  close   1800          
 change        from         us      at      CET     
                            STOCKS                        
                            Latest  Previo  Daily   Change
                                    us              
                                    close   change  in
                                                    2017
 Prague                     935.02  932.86   +0.23   +1.46
                                                 %       %
 Budapest                   32383.  32169.   +0.66   +1.19
                                02      13       %       %
 Warsaw                     1983.3  1989.6  -0.32%   +1.82
                                 3       4               %
 Bucharest                  7175.7  7164.3   +0.16   +1.28
                                 2       5       %       %
 Ljubljana                  707.43  707.96  -0.07%  -1.42%
 Zagreb                     2025.7  2025.1   +0.03   +1.55
                                 1       9       %       %
 Belgrade                   718.10  717.37   +0.10   +0.10
                                                 %       %
 Sofia                      589.45  587.10   +0.40   +0.51
                                                 %       %
                            BONDS                         
                            Yield   Yield   Spread  Daily
                            (bid)   change  vs      change
                                            Bund    in
 Czech                                              spread
 Republic                                           
   2-year                   -0.978  -0.117  -019bp  -10bps
                                                 s  
   5-year                   -0.226  -0.051   +030b   -4bps
                                                ps  
   10-year                   0.484  -0.038   +022b   -3bps
                                                ps  
 Poland                                                   
   2-year                    2.138   0.002   +293b   +2bps
                                                ps  
   5-year                    2.998  -0.025   +352b   -2bps
                                                ps  
   10-year                   3.749  -0.007   +349b   +0bps
                                                ps  
               FORWARD      RATE    AGREEMENT             
                            3x6     6x9     9x12    3M
                                                    interb
                                                    ank
 Czech Rep             <PR     0.2    0.14    0.12       0
               IBOR=>                               
 Hungary               <BU    0.36    0.42    0.52    0.36
               BOR=>                                
 Poland                <WI   1.775    1.83   1.905    1.73
               BOR=>                                
 Note: FRA     are for ask                                
 quotes        prices                               
 *********************************************************
 *****
 
 (Additional reporting by Jakub Iglewski; Editing by Catherine
Evans)

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