Oct. 4 (Bloomberg) -- Mol Nyrt., Hungary’s largest refiner, dropped for a third day after Prime Minister Viktor Orban said the company should sell its stake in a Croatian subsidiary back to the Adriatic country to resolve a dispute.
The shares fell 2.8 percent to 14,990 forint by 1:44 p.m. in Budapest, the lowest level in 16 months. About 172,000 securities changed hands, three times the three-month daily average. The benchmark BUX index, in which Mol has the second-heaviest weighting at 29.5 percent, retreated 1 percent.
The Budapest-based company has slid 6.3 percent since Croatia issued an arrest warrant against Chairman Zsolt Hernadi as part of a bribery probe into the 2009 deal that gave it control of INA Industrija Nafte d.d. Successive governments have sought to re-establish Croatia’s influence over INA. The state is using “non-economic” methods to intimidate Mol and should consider buying back the holding and settling on the price “in a fair way,” Orban said in a radio interview today.
“We see a palpable urge from Hungarian politicians to enter the dispute,” Balazs Sore, a Budapest-based equities trader at BudaCash Brokerhaz Zrt., said by phone. “With a war of words and no concrete developments, the stock is more likely to lose.”
Mol said yesterday it may consider selling its 49.1 stake in INA back to Croatia, which holds 44.8 percent. Hungary is the largest owner of Mol, with 24.6 percent of shares outstanding.
The stock’s 14-day relative strength index was at 30.5, compared with 46 on Oct. 1. Readings below 30 indicate to some analysts that a security is oversold.
“The drop seems a bit overblown,” BudaCash’s Sore said. “Larger holders are reducing their exposure to the stock and the market may not be able to absorb this volume.”
Four analysts recommend investors buy the shares, while 10 have a hold rating and five say sell, according to data compiled by Bloomberg.
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