December 4, 2019 / 10:57 AM / 8 days ago

CEE MARKETS-Hungarian bourse shines, led by OTP's 2.3% jump to record high

    By Krisztina  Than
    BUDAPEST, Dec 4 (Reuters) - Hungary's stock market rose over
1.6% on Wednesday morning, outperforming its Central European
peers as investor sentiment in the world improved with twists
and turns in the Sino-U.S. trade war keeping markets on a roller
coaster ride.
    Central European currencies also firmed slightly, with the
Polish zloty up 0.1% in line with the Hungarian forint
, which also gained 0.1% to trade at around 331.30
versus the euro, distancing from its all-time low of 337.21 hit
last week.
    "The Hungarian bourse jumped more than the others, in a
positive correction," said Zoltan Varga, senior analyst at
brokerage Equilor. He said this could largely be due to a 2.3%
rise in OTP, Hungary's largest bank, which rose to a
new record high at 14,630 forints on Wednesday. 
    OTP has been testing new highs for a while.
    Budapest's market gained 1.65% on the day by 1033
GMT, followed by Warsaw's WIG 20 up 0.8% and Prague
 flat. 
    Poland's central bank holds a rate meeting later on
Wednesday where it is expected to keep interest rates unchanged,
as the region's central banks maintain a wait and see mode with
economic growth expected to slow next year.
    "Nobody expects the MPC to change interest rates on
Wednesday, but the tone of the comment may be eased, thus
supporting the domestic debt market," PKO BP said in a note.
    "The only fresh remark could be about the Supreme Court
ruling on FX mortgages which rocked asset markets last week -
the central bank may want to reassure markets that it has the
tools to counter any fallout from that ruling," Commerzbank
analyst Tatha Ghose said in a note ahead of the meeting.
    He said the forex mortgage story could be "one potential
source of exchange rate volatility going forward; the other
could be acceleration in core inflation."
    "Core inflation has accelerated in Poland in recent months
and this could become a factor later, but for now the central
bank's status quo is likely to prove zloty-neutral," Ghose
added.
     The Polish zloty weakened last week after a Polish Supreme
Court verdict that investors fear raises the risk that Swiss
franc mortgage loans will be converted into the local currency
on terms unfavourable to banks.
    Thousands of Poles took out Swiss franc-denominated
mortgages that have become prohibitively expensive to service
after the franc soared in value.
    The National Bank of Hungary will publish the minutes of its
November rate meeting at 1300 GMT on Wednesday. The bank left
interest rates unchanged last month as expected.
    The bank maintained its accommodative policy stance and
reiterated its view that dampening European economic activity
would keep a lid on domestic price pressures. 
    The bank next meets on Dec. 17 to discuss interest rates,
and fresh inflation and GDP projections that could give clues
regarding policy going head.

                   CEE      SNAPSHOT     AT                     
                   MARKETS              1042             
                                        CET              
                            CURRENCIES                          
                            Latest      Previou  Daily   Change
                                        s                
                            bid         close    change  in 2019
 EURCZK  Czech     <EURCZK     25.5120  25.5300   +0.07   +0.76%
 =       crown     =>                                 %  
 EURHUF  Hungary   <EURHUF    331.3300  331.730   +0.12   -3.09%
 =       forint    =>                         0       %  
 EURPLN  Polish    <EURPLN      4.2783   4.2833   +0.12   +0.26%
 =       zloty     =>                                 %  
 EURRON  Romanian  <EURRON      4.7735   4.7785   +0.10   -2.50%
 =       leu       =>                                 %  
 EURHRK  Croatian  <EURHRK      7.4355   7.4385   +0.04   -0.34%
 =       kuna      =>                                 %  
 EURRSD  Serbian   <EURRSD    117.3700  117.480   +0.09   +0.79%
 =       dinar     =>                         0       %  
         Note:     calculated from               1800           
         daily                                   CET     
         change                                          
                                                                
                            Latest      Previou  Daily   Change
                                        s                
                                        close    change  in 2019
 .PX     Prague                1077.57  1077.64  -0.01%   +9.22%
                                             00          
 .BUX    Budapest             43645.24  43048.2   +1.39   +11.51
                                              5       %        %
 .WIG20  Warsaw    <.WIG20     2106.64  2089.92   +0.80   -7.47%
                   >                                  %  
 .BETI   Buchares              9909.16  9879.22   +0.30   +34.20
         t                                            %        %
 .SBITO  Ljubljan  <.SBITO      900.49   896.93   +0.40   +11.97
 P       a         P>                                 %        %
 .CRBEX  Zagreb    <.CRBEX     2005.91  2004.46   +0.07   +14.70
                   >                                  %        %
 .BELEX  Belgrade  <.BELEX      769.97   770.96  -0.13%   +1.09%
 15                15>                                   
 .SOFIX  Sofia     <.SOFIX      541.31   544.24  -0.54%   -8.94%
                   >                                     
                            BONDS                               
                            Yield       Yield    Spread  Daily
                            (bid)       change   vs      change
                                                 Bund    in
         Czech                                           spread
         Republic                                        
 CZ2YT=    2-year  <CZ2YT=      1.5490   0.0290   +219b    +3bps
 RR                RR>                               ps  
 CZ5YT=    5-year  <CZ5YT=      1.2560   0.0280   +187b    +4bps
 RR                RR>                               ps  
 CZ10YT            <CZ10YT      1.4720  -0.0020   +182b    +0bps
 =RR     10-year   =RR>                              ps  
         Poland                                                 
 PL2YT=    2-year  <PL2YT=      1.3810  -0.0200   +202b    -2bps
 RR                RR>                               ps  
 PL5YT=    5-year  <PL5YT=      1.7320   0.0070   +234b    +2bps
 RR                RR>                               ps  
 PL10YT            <PL10YT      2.0160   0.0490   +236b    +5bps
 =RR     10-year   =RR>                              ps  
                   FORWARD  RATE        AGREEME                 
                                        NT               
                            3x6         6x9      9x12    3M
                                                         interba
                                                         nk
         Czech     <CZKFRA        2.22     2.22    2.16     2.18
         Rep       ><PRIBO                               
                   R=>                                   
         Hungary   <HUFFRA        0.25     0.27    0.32     0.17
                   ><BUBOR                               
                   =>                                    
         Poland    <PLNFRA        1.73     1.68    1.63     1.71
                   ><WIBOR                               
                   =>                                    
         Note:     are for ask prices                           
         FRA                                             
         quotes                                          
 
    
    

 (Reporting by Krisztina Than, additional reporting by Alan
Charlish
Editing by Giles Elgood)
  
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