OTP Gains, Paring Weekly Drop as Hungarian Stocks Advance
OTP Bank Nyrt. (OTP), Hungary’s largest lender, pared its weekly decline as the country’s stocks rose on speculation that Greece will get a second bailout and Hungary worked to obtain its own rescue.
The shares rose 1.9 percent to 3,945 forint by the close in Budapest, paring losses this week to 0.8 percent. The benchmark BUX stock index added 2.1 percent.
The MSCI Emerging Market Index rallied 1.1 percent as investors anticipated a meeting of euro area finance ministers next week will move toward a second bailout for Greece. Hungary responded today to the European Commission on disputes which have obstructed talks on International Monetary Fund and European Union aid since last year in three areas including monetary-policy independence.
“Mainly it is the rally on exchanges abroad which is helping Hungarian markets,” Akos Kuti, head of research at Equilor Befektetesi Zrt., a Budapest-based broker, said by telephone today. “Some very favorable news was received from Europe, particularly about the Greek rescue, that was clearly what lifted markets.”
Signs that obstacles to Hungary’s own bailout will be removed also supported the rally, Kuti said.
While Hungary expects further debate with the EU on its central bank law, the Cabinet is willing to compromise on the issue of the judiciary, state-run news service MTI reported late yesterday, citing Deputy Prime Minister Tibor Navracsics.
“Hungary’s government left it late to reply to the EC’s decision to start infringement proceedings,” William Jackson, a London-based emerging-market analyst at Capital Economics, wrote in a research report today. “But the fact that it has done so, coupled with conciliatory comments from Prime Minister Orban, has raised hopes that a deal with the EU/IMF can be reached quickly. We remain more cautious.”
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