January 23, 2018 / 9:54 AM / 3 months ago

CEE MARKETS-Poland, Hungary hit record highs on global stock rally

    * Indices in Budapest, Warsaw reach record high on banks
    * Tehcnical factors also help Budapest blue chips
    * Czech markets ignore presidential, PM uncertainty
    * Hungarian government bond yields retreat after surge

    By Sandor Peto
    BUDAPEST, Jan 23 (Reuters) - Polish and Hungarian stocks hit
record highs on Tuesday, helped by a positive mood in global
equities markets, optimism over local economic fundamentals and
some short position closing.
     The Warsaw stock exchange's main index rose by
almost one percent to an all-time high and the blue chip
 index reached its highest level since mid-2011, driven
by financial sector shares.
     Other regional indices gained less, but Budapest set
another record high, driven by a continuing rally of OTP
, Central Europe's biggest independent bank, to a
record high of 11,520 forints ($45.47).
     "In the longer term, the bank stock can even reach 12,000
forints," Equilor brokerage analyst Zoltan Varga said in a note.
    He said technical factors had also helped oil group MOL's
 stock, and Magyar Telekom
    Stocks in Asian emerging markets hit record
highs after Wall Street was boosted by a deal in the U.S. Senate
to end a brief government shutdown.
    Elsewhere in Central Europe, stocks in Prague rose to
their highest level since 2011, disregarding political
uncertainty ahead of presidential elections at the end of the
week.
    Independent challenger Jiri Drahos holds a narrow lead over
incumbent president Milos Zeman, an opinion poll showed on
Monday.
    Zeman said he will re-appoint Andrej Babis, whose government
lost a parliament confidence vote last week, as prime minister
regardless of whether he wins a new presidential term.

    Drahos has said he would advise Babis not to seek the
premiership while he defends himself from police allegations of
EU subsidy fraud.
    Amid a global stock rally last year, investors usually
ignored political jitters in Central Europe, apart from Romania
where concerns over corruption and a reform of the judiciary are
coupled with worries that the economy is overheating.
    Bucharest stocks were flat at 0922 GMT, even though they set
a 7-month high in early trade.
    Central European currencies were mostly slightly weaker as
the dollar attracted some buying in international markets.
    In government bond markets, Hungary's long-term government
bonds consolidated after a surge in yields since Thursday when
supply and conditions at a new interest rate swap (IRS) facility
of the Hungarian central bank disappointed.
    "Positions and heads have got cleaner," one Budapest-based
fixed income trader said.
    Yields were flat from Monday's close, but 7-8 basis points
below their peak in the previous session, the trader said.
    10-year benchmark paper traded at a yield of 2.12 percent.  
 
            CEE       SNAPSHOT   AT                         
            MARKETS             1022 CET            
                      CURRENCI                              
                      ES                            
                      Latest    Previous  Daily     Change
                      bid       close     change    in 2018
 Czech      <EURCZK=   25.4240   25.4090    -0.06%    +0.46%
 crown      >                                       
 Hungary    <EURHUF=  310.2000  309.7900    -0.13%    +0.23%
 forint     >                                       
 Polish     <EURPLN=    4.1725    4.1687    -0.09%    +0.09%
 zloty      >                                       
 Romanian   <EURRON=    4.6655    4.6690    +0.08%    +0.30%
 leu        >                                       
 Croatian   <EURHRK=    7.4340    7.4345    +0.01%    -0.05%
 kuna       >                                       
 Serbian    <EURRSD=  118.5000  118.7500    +0.21%    +0.00%
 dinar      >                                       
 Note:      calculated from               1800 CET          
 daily                                              
 change                                             
                                                            
                      Latest    Previous  Daily     Change
                                close     change    in 2018
 Prague                1134.50  1132.800    +0.15%    +5.23%
                                       0            
 Budapest             41053.62  41002.39    +0.12%    +4.26%
 Warsaw                2646.53   2620.87    +0.98%    +7.53%
 Bucharest             8488.15   8490.52    -0.03%    +9.47%
 Ljubljana  <.SBITOP    834.85    836.11    -0.15%    +3.53%
            >                                       
 Zagreb                1871.03   1869.57    +0.08%    +1.53%
 Belgrade   <.BELEX1    775.25    776.31    -0.14%    +2.03%
            5>                                      
 Sofia                  709.15    708.02    +0.16%    +4.68%
                      BONDS                                 
                      Yield     Yield     Spread    Daily
                      (bid)     change    vs Bund   change
                                                    in
 Czech                                              spread
 Republic                                           
   2-year   <CZ2YT=R    0.5390   -0.0020   +115bps     +0bps
            R>                                      
   5-year   <CZ5YT=R    1.0390   -0.0100   +120bps     +0bps
            R>                                      
   10-year  <CZ10YT=    1.8030    0.0360   +126bps     +5bps
            RR>                                     
 Poland                                                     
   2-year   <PL2YT=R    1.5490   -0.0080   +216bps     -1bps
            R>                                      
   5-year   <PL5YT=R    2.6310   -0.0230   +279bps     -1bps
            R>                                      
   10-year  <PL10YT=    3.3240    0.0040   +278bps     +2bps
            RR>                                     
            FORWARD   RATE      AGREEMEN                    
                                T                   
                      3x6       6x9       9x12      3M
                                                    interban
                                                    k
 Czech Rep                1.01      1.19      1.35      0.77
            <PRIBOR=                                
            >                                       
 Hungary                  0.07      0.12      0.16      0.02
                                                    
 Poland                   1.75      1.77      1.86      1.72
                                                    
 Note: FRA  are for ask prices                              
 quotes                                             
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($1 = 253.3500 forints)

 (Reporting by Sandor Peto; editing by Alexander Smith)
  
 
 
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