Shares of Magyar Telekom Nyrt. slumped the most in seven months after Hungary’s government abandoned plans to review a special tax on the industry.
The country’s largest telecommunication company fell 4.8 percent to 400 forint at the close of trading in Budapest, for the biggest drop since Sept. 19. The stock erased gains of as much as 1.7 percent after Economy Minister Mihaly Varga said the government won’t change a tax on phone calls and text messages in next year’s budget. The former phone monopoly surged 7.6 percent in March when the government announced a possible review.
“The price drop speaks for itself: anticipation of the tax cut had been a key driver of gains,” David Sandor, the head of research at KBC Groep NV’s Hungarian brokerage, said by phone. The tax reduction could have boosted the stock by “tens of forints of increase in fair value,” he said.
Trading volume almost doubled from the three-month average on Tuesday as Magyar Telekom pared its 2015 gains to 18 percent. The benchmark BUX index rose 1.2 percent, extending its advance this year to 32 percent.
The levy is among measures introduced by Viktor Orban’s government since 2010 that received criticism from international organizations, including the European Union.
OTP Bank Nyrt., the nation’s largest lender, climbed 3 percent to 5,787 forint as Varga confirmed plans to lower a tax on financial institutions to 0.31 percent of total assets from 0.53 percent.