August 28, 2018 / 9:40 AM / 24 days ago

CEE MARKETS-CD Projekt results help Warsaw shares hit six-month high

    * Warsaw shares briefly touch six-month high
    * Video-game producer CD Projekt jumps on strong results
    * Currencies give up some ground, but in past weeks' ranges
    * Zloty hits three-year high against the forint

    By Sandor Peto
    BUDAPEST, Aug 28 (Reuters) - Polish shares reached a
six-month high on Tuesday before retreating, buoyed by
video-game maker CD Projekt's results and optimism after the
United States and Mexico clinched a trade deal.
    CD Projekt shares jumped by more than 3 percent after it
reported higher-than-expected net profits for the first half of
the year. They helped push Warsaw's blue-chip stock
index to its highest levels since February.
    The index had retreated by 0826 GMT as investors took
profit. It had rebounded from sharp losses in the previous
months when the dollar's rally caused a sell-off in emerging
markets.
    Poland's robust economic growth, 5.1 percent in annual terms
in the second quarter, has helped its stocks keep pace with a
global stock index and outperform an
emerging-market stock index, analysts said.    
    "Polish stocks are not over-valued ... and are helped with a
relatively big and growing domestic market," said Noemi Holecz,
of the brokerage Equilor in Budapest.  "Also, the zloty has been
relatively resilient, which can help shares."
    The Czech and Romanian central banks have raised interest
rates to curb inflation; the Polish and Hungarian central banks
have kept rates on hold.
    Poland will be the first in the region to release August
inflation figures, on Friday. Analysts expect no change and some
of them do not rule out a decline, which would increase real
interest rates.
    Polish government bond yields may still not drop, with an
expected pick-up in government debt issuance in September, BZ
WBK analysts said in a note.
    The zloty retreated, in line with other Central
European currencies, as the Turkish lira's weakening threatened 
to spread.
    "Extreme stress in the Turkish lira has an impact on other
CEE currencies," Raiffeisen analyst Sebastian Petric said,
drawing conclusions from a correlation model. 
    But regional currencies stayed in the past few weeks' ranges
as the summer holidays keep trading appetite low.
    The zloty, despite 0.2 percent weakening against the euro to
4.274, remains near the past few months' strongest levels.
    It has shed 2.3 percent versus the euro this year, but that
is well below 4 percent shed by the forint. The Polish currency 
set a three-year high against the Hungarian currency
on Tuesday.
    
            CEE       SNAPSHOT   AT                         
            MARKETS             1026 CET            
                      CURRENCI                              
                      ES                            
                      Latest    Previous  Daily     Change
                      bid       close     change    in 2018
 Czech      <EURCZK=   25.7200   25.7020    -0.07%    -0.69%
 crown      >                                       
 Hungary    <EURHUF=  323.9000  323.6500    -0.08%    -4.01%
 forint     >                                       
 Polish     <EURPLN=    4.2740    4.2664    -0.18%    -2.28%
 zloty      >                                       
 Romanian   <EURRON=    4.6460    4.6474    +0.03%    +0.73%
 leu        >                                       
 Croatian   <EURHRK=    7.4350    7.4365    +0.02%    -0.06%
 kuna       >                                       
 Serbian    <EURRSD=  118.4400  118.2300    -0.18%    +0.05%
 dinar      >                                       
 Note:      calculated from               1800 CET          
 daily                                              
 change                                             
                                                            
                      Latest    Previous  Daily     Change
                                close     change    in 2018
 Prague                1077.86  1076.510    +0.13%    -0.03%
                                       0            
 Budapest             36745.60  36685.79    +0.16%    -6.68%
 Warsaw                2367.82   2369.97    -0.09%    -3.79%
 Bucharest             8291.75   8301.28    -0.11%    +6.94%
 Ljubljana  <.SBITOP    863.01    866.53    -0.41%    +7.02%
            >                                       
 Zagreb                1817.67   1820.96    -0.18%    -1.37%
 Belgrade   <.BELEX1    733.14    734.37    -0.17%    -3.51%
            5>                                      
 Sofia                  633.51    634.77    -0.20%    -6.49%
                      BONDS                                 
                      Yield     Yield     Spread    Daily
                      (bid)     change    vs Bund   change
                                                    in
 Czech                                              spread
 Republic                                           
   2-year   <CZ2YT=R    1.2880   -0.0080   +189bps     +0bps
            R>                                      
   5-year   <CZ5YT=R    1.6960    0.0010   +195bps     +1bps
            R>                                      
   10-year  <CZ10YT=    2.1040   -0.0080   +174bps     +0bps
            RR>                                     
 Poland                                                     
   2-year   <PL2YT=R    1.6110   -0.0010   +221bps     +1bps
            R>                                      
   5-year   <PL5YT=R    2.4980   -0.0070   +275bps     +0bps
            R>                                      
   10-year  <PL10YT=    3.1750   -0.0050   +281bps     +1bps
            RR>                                     
            FORWARD   RATE      AGREEMEN                    
                                T                   
                      3x6       6x9       9x12      3M
                                                    interban
                                                    k
 Czech Rep                1.84      1.96      2.05      1.49
            <PRIBOR=                                
            >                                       
 Hungary                  0.43      0.64      0.84      0.18
                                                    
 Poland                   1.75      1.78      1.81      1.71
                                                    
 Note: FRA  are for ask prices                              
 quotes                                             
 *************************************************          
 *************                                      
 
    
 (Reporting by Sandor Peto, editing by Larry King)
  
 
 
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