OTP Drops to Week Low as Hungary Faces Malev Closure Costs
OTP Bank Nyrt. (OTP), Hungary’s largest lender, dropped to the lowest in more than a week on concern the liquidation of a state-owned airline will widen the government’s deficit, damping demand for the country’s stocks.
The shares fell 1.8 percent to 4,060 forint. The benchmark BUX stock index, in which OTP has a 29 percent weighting, declined 1.4 percent by the close in Budapest.
The government may be forced to pay “several hundred billion forint” to Budapest Airport in compensation as it moves to wind up carrier Malev Zrt., the Development Ministry said in an e-mailed response to questions late yesterday.
“There is some uncertainty regarding the Budapest Airport case,” Zoltan Reczey, an analyst at Buda-Cash Brokerhaz Zrt., said in a telephone interview today. “There is a risk the potential budget expenditure will be significant,” which may explain the “underperformance” of OTP’s stock, he said.
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