December 21, 2018 / 11:00 AM / 6 months ago

CEE MARKETS-Romanian stocks extend plunge as government prepares tax measures

    * Romanian government to meet to approve shock tax measures
    * Bucharest index shed 18 pct in just four days
    * Romanian bonds mixed, leu weakens by 1/4 pct
    * Global growth fears weigh on CEE stocks, currencies

    By Sandor Peto and Luiza Ilie
    BUDAPEST/BUCHAREST, Dec 21 (Reuters) - Romanian stocks
headed towards their worst weekly performance in more than seven
years as the government was expected to approve tax measures
later on Friday affecting various business sectors.
    The Bucharest bourse's index fell 2.3 percent to its
lowest level in almost two years, while other Central European
indices dropped much less, with fears over global economic
growth weighing on sentiment in emerging markets.
    Just four days ago, the Bucharest index was Central Europe's
best 2018 performer, with over 10 percent year-to-date gain, and
by Friday it became one of the worst, down 7.5 percent from the
end of 2017.
    The Romanian government will meet at 1630 GMT to approve
shock measures announced late on Tuesday to keep the budget
deficit at bay, and the details will be closely watched in
markets.
    The emergency decree will enforce a bank tax but also cap
gas prices, introduce a turnover tax for energy and telecoms
firms, and enable Romanians to withdraw from a mandatory private
pension scheme.
    Tremors ran through regional markets, hitting the shares of
banks including Austrian-based Erste and
Raiffeisen and Hungary's OTP.
    The main driver of Friday's index decline was local lender
Banca Transilvania. State-owned nuclear power
producer Nuclearelectrica's stocks fell as much as 18
percent.
    "All in all, the desperate fiscal measures are clouding
business prospects," Citigroup said in its weekly note on
emerging markets.
    It said dampened credit lending could offset the additional
inflation pressure from higher taxes in the energy, telecom and
tobacco sectors.
    Romanian government bond yields, which jumped after the
announcement, but retreated by Thursday, were mixed on Friday.
    The leu has also seen jitters due to increased
uncertainty over the policy of the Romanian central bank, which
has become more optimistic over inflation in the past months
after earlier interest rate hikes.
    After getting help from demand due to end-of-month tax
payments on Thursday, it shed a quarter of a percent against the
euro on Friday to trade at 4.652, near its 90-day moving
average.
    Elsewhere in Central Europe, the Hungarian forint
and the Czech crown shed 0.1 percent versus the euro.
    The zloty was also a shade weaker, shrugging off a
bigger-than-expected 8.2 percent annual jump in Polish retail
sales in November. 
     
            CEE       SNAPSHOT   AT                         
            MARKETS             1055 CET            
                      CURRENCI                              
                      ES                            
                      Latest    Previous  Daily     Change
                      bid       close     change    in 2018
 Czech      <EURCZK=   25.8180   25.7900    -0.11%    -1.07%
 crown      >                                       
 Hungary    <EURHUF=  321.9000  321.6000    -0.09%    -3.41%
 forint     >                                       
 Polish     <EURPLN=    4.2885    4.2870    -0.03%    -2.62%
 zloty      >                                       
 Romanian   <EURRON=    4.6524    4.6410    -0.25%    +0.59%
 leu        >                                       
 Croatian   <EURHRK=    7.4205    7.4257    +0.07%    +0.13%
 kuna       >                                       
 Serbian    <EURRSD=  118.0900  118.2500    +0.14%    +0.35%
 dinar      >                                       
 Note:      calculated from               1800 CET          
 daily                                              
 change                                             
                                                            
                      Latest    Previous  Daily     Change
                                close     change    in 2018
 Prague                 983.85  992.9200    -0.91%    -8.75%
 Budapest             39409.80  39592.68    -0.46%    +0.08%
 Warsaw                2287.84   2306.68    -0.82%    -7.04%
 Bucharest             7169.24   7332.71    -2.23%    -7.54%
 Ljubljana  <.SBITOP    788.59    791.09    -0.32%    -2.21%
            >                                       
 Zagreb                1729.38   1729.87    -0.03%    -6.16%
 Belgrade   <.BELEX1    751.17    750.98    +0.03%    -1.14%
            5>                                      
 Sofia                  587.74    588.81    -0.18%   -13.24%
                      BONDS                                 
                      Yield     Yield     Spread    Daily
                      (bid)     change    vs Bund   change
                                                    in
 Czech                                              spread
 Republic                                           
   2-year   <CZ2YT=R    1.6770    0.1240   +228bps    +13bps
            R>                                      
   5-year   <CZ5YT=R    1.8850    0.0670   +214bps     +6bps
            R>                                      
   10-year  <CZ10YT=    2.0460    0.0100   +180bps     +0bps
            RR>                                     
 Poland                                                     
   2-year   <PL2YT=R    1.3680    0.0030   +197bps     +1bps
            R>                                      
   5-year   <PL5YT=R    2.3380    0.0040   +259bps     -1bps
            R>                                      
   10-year  <PL10YT=    2.8950    0.0290   +265bps     +2bps
            RR>                                     
            FORWARD   RATE      AGREEMEN                    
                                T                   
                      3x6       6x9       9x12      3M
                                                    interban
                                                    k
 Czech Rep                2.15      2.20      2.27      2.02
            <PRIBOR=                                
            >                                       
 Hungary                  0.32      0.59      0.83      0.00
                                                    
 Poland                   1.76      1.77      1.79      1.72
                                                    
 Note: FRA  are for ask prices                              
 quotes                                             
 *************************************************          
 *************                                      
   

 (Reporting by Sandor Peto; Editing by Kevin Liffey)
  
 
 
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below