Hungary Investors Should Brace for Possible Crisis, Societe Generale Says

Investors in Hungarian assets should prepare for a “possible crisis” as the east European country remains “highly vulnerable to shocks” as long as it lacks an International Monetary Fund backstop, Sociate Generale SA said.

SocGen analyst Gaelle Blanchard recommends investors sell Hungary’s short-dated debt, which will yield better returns than a strategy of short-selling the forint, she wrote in an e-mailed note today.

“The IMF would provide an anchor for economic and financial policies and help boost investor confidence,” wrote Blanchard. “Without this safety net, Hungary is highly vulnerable to shocks. Against this backdrop, positioning for a possible crisis makes sense.”

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