December 28, 2018 / 11:30 AM / 2 months ago

CEE MARKETS-Romanian stocks buck rebound, forint leads fx easing

    * Stocks track global rebound, except for Bucharest
    * New taxes keep pressure on Romanian shares
    * First Dec CEE inflation figure, from Slovenia, shows
plunge

    By Sandor Peto and Alicja Ptak
    BUDAPEST/WARSAW, Dec 28 (Reuters) - Romanian shares, under
pressure from recently approved new taxes, bucked a rise of
Central European equities on Friday after a recovery continued
in Wall Street.
    Warsaw's bluechip stock index rose 1.3 percent by
1016 GMT. Bucharest shed 0.75 percent.
    Warsaw, one of the best performing equity markets in the
world in 2017, is one of the biggest losers among the region's
main stock markets this year after Prague, with a 7.3
percent loss.
    Bucharest, which was down by 4.7 percent from the end of
2017, turned a robust 8 percent year-to-date gain into a loss
last week, after the government announced a plan to launch new
taxes on sectors including banks.
    The final plan approved late on Friday scaled back the tax
rise somewhat. A temporary relief rally followed, but Romanian
shares continued to weaken after the Christmas holidays.
    Central European currencies including the leu
eased against the euro, led by the forint which shed
0.3 percent. Trading at 321.75 it was still near its
200-day-moving average.
    "It is positioning ahead of the year's last (daily) fixing,"
a Budapest-based dealer said, adding that the government's 2019
financing plan published on Friday had no impact.
    The government said it planned to finance 2019 foreign
currency debt expiries entirely from domestic markets.

    The plans did not affect the government bond market either,
which was idle in the last session of the year, after a plunge
in long-term yields in the third quarter as a decline in crude
prices reduced inflation.
    Hungary's 10-year bond yield was quoted around 3 percent in
the bourse, its lowest level since May.
    Slovenia released the region's first December 2018 inflation
data on Friday. The figures showed a plunge in annual inflation
to 1.4 percent from 2.1 percent in November.
    Poland's parliament was expected to pass legislation later
on Friday to keep power prices flat next year instead of raising
them, a move that could keep a lid on inflation and help the
central bank hold interest rates at record lows longer.
    Poland's 10-year bond yield traded at 2.8215 percent, a tad
higher, tracking its U.S. peer while staying near Thursday's
2-year lows.
    Some funds may continue to buy Polish bonds early next year,
but abundant supply can keep yields in balance, mBank dealer
Mateusz Milewski said.
    The zloty could stay near 4.29 against the euro in the short
term, but the exit of Britain, a key trade partner of Poland,
from the European Union next year poses risks to the unit, Bank
Millennium financial markets analyst Mateusz Sutowicz said.
     
            CEE       SNAPSHOT   AT                         
            MARKETS             1116 CET            
                      CURRENCI                              
                      ES                            
                      Latest    Previous  Daily     Change
                      bid       close     change    in 2018
 Czech      <EURCZK=   25.7980   25.7930    -0.02%    -0.99%
 crown      >                                       
 Hungary    <EURHUF=  321.7500  320.8000    -0.30%    -3.37%
 forint     >                                       
 Polish     <EURPLN=    4.2985    4.2920    -0.15%    -2.84%
 zloty      >                                       
 Romanian   <EURRON=    4.6590    4.6560    -0.06%    +0.44%
 leu        >                                       
 Croatian   <EURHRK=    7.4100    7.4095    -0.01%    +0.27%
 kuna       >                                       
 Serbian    <EURRSD=  118.0300  118.1500    +0.10%    +0.40%
 dinar      >                                       
 Note:      calculated from               1800 CET          
 daily                                              
 change                                             
                                                            
                      Latest    Previous  Daily     Change
                                close     change    in 2018
 Prague                 985.00  977.9100    +0.73%    -8.64%
 Budapest             39233.19  39006.52    +0.58%    -0.37%
 Warsaw                2281.37   2251.38    +1.33%    -7.31%
 Bucharest             7387.80   7443.58    -0.75%    -4.72%
 Ljubljana  <.SBITOP    799.19    789.22    +1.26%    -0.89%
            >                                       
 Zagreb                1744.89   1737.37    +0.43%    -5.32%
 Belgrade   <.BELEX1    753.36    776.73    -3.01%    -0.85%
            5>                                      
 Sofia                  592.76    589.09    +0.62%   -12.50%
                      BONDS                                 
                      Yield     Yield     Spread    Daily
                      (bid)     change    vs Bund   change
                                                    in
 Czech                                              spread
 Republic                                           
   2-year   <CZ2YT=R    1.5180    0.0400   +214bps     +3bps
            R>                                      
   5-year   <CZ5YT=R    1.7680   -0.0210   +205bps     -3bps
            R>                                      
   10-year  <CZ10YT=    1.9130   -0.0790   +169bps     -8bps
            RR>                                     
 Poland                                                     
   2-year   <PL2YT=R    1.3510   -0.0230   +198bps     -3bps
            R>                                      
   5-year   <PL5YT=R    2.2800   -0.0030   +256bps     -1bps
            R>                                      
   10-year  <PL10YT=    2.8370    0.0120   +261bps     +2bps
            RR>                                     
            FORWARD   RATE      AGREEMEN                    
                                T                   
                      3x6       6x9       9x12      3M
                                                    interban
                                                    k
 Czech Rep                2.08      2.10      2.11      2.01
            <PRIBOR=                                
            >                                       
 Hungary                  0.31      0.55      0.79      0.13
                                                    
 Poland                   1.76      1.77      1.78      1.72
                                                    
 Note: FRA  are for ask prices                              
 quotes                                             
 *************************************************          
 *************                                      
 
 (Additional reporting by Jan Lopatka in Prague
Editing by Mark Heinrich)
  
 
 
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