Pannergy Nyrt., a Hungarian renewable energy company, gained the most in more than three years after KBC Groep NV raised its recommendation for the stock, saying the biggest weekly slump on record was overdone.
The shares rose 9.1 percent to 430 forint by the close in Budapest, the biggest rally since November 2009. Last week’s 30 percent decline pushed the stock’s relative strength index to 6.8, below the 30 level considered by some analysts as oversold. The RSI last stood at 22. Traders bought and sold more than 400,000 shares today, more than seven times the three-month daily average.
KBC’s Hungarian broker unit raised its recommendation for Pannergy to buy from hold, while cutting its fair value estimate by 28 percent to 445 forint. Pannergy will manage to complete “large-scale” geothermal projects, including one in the city of Miskolc in eastern Hungary, which has suffered delays, KBC said.
“We believe last week’s deep price drop has created a good buying opportunity,” Peter Szentirmai, a Budapest-based analyst at KBC Securities, wrote in a research report. Last week’s sell-off happened for “technical” reasons, KBC said.