OTP Set for Second Monthly Drop as Hungary Aid Talks Delayed
OTP Bank Nyrt. (OTP), Hungary’s largest lender, headed for a second month of declines on speculation the country will face further dispute with international lenders on the conditions of starting bailout negotiations.
The shares fell 1.9 percent to 3,820 forint at the end of trading in Budapest. That brings the stock’s decline this month to 4.5 percent, following a 0.4 percent drop in February.
The International Monetary Fund says Hungary’s government is aware of conditions for starting bailout negotiations and must make the next move, Vilaggazdasag reported, citing Iryna Ivaschenko, the IMF’s country representative. Ivaschenko’s comments at a university event in Budapest yesterday contrasted with statements from the government saying the Washington-based lender still needs to clarify what Hungary must to do to start talks, the newspaper said.
“Each side is waiting for the other one to make concessions,” Akos Kuti, head of research at Equilor Befektetesi Zrt., and colleagues wrote in a research report today. “The longer the drama continues the less satisfied investors become.”
European Union concerns about the independence of the Hungarian central bank can be “considered solved,” Peter Szijjarto, Orban’s spokesman, said in an e-mail today, adding that Hungary wants to start talks on a loan “as soon as possible.”
European stocks declined for a second day as Federal Reserve Chairman Ben S. Bernanke warned that a U.S. economic recovery isn’t assured, and American orders for durable goods rose less than expected.
The forint weakened 0.4 percent to 292.56 per euro.
Investors may not take the government’s words “as gospel,” Tim Ash, chief emerging markets economist at Royal Bank of Scotland Group Plc, said in an e-mail today. “The market will await any confirmation from the European Commission and the European Central Bank” on the changes to the central bank law, he said.
To contact the reporter on this story: Andras Gergely in Budapest at email@example.com
To contact the editor responsible for this story: Gavin Serkin at firstname.lastname@example.org