FHB Set to Drop as 12-Day Rally Seen Unjustified: Budapest Mover

FHB Jelzalogbank Nyrt., a mortgage lender in Hungary, headed for its steepest slide in two weeks as a technical indicator signaled the stock is overbought amid speculation of a stake-purchase in Takarekbank Zrt.

The shares fell 1 percent to 911 forint by 2:51 p.m. in Budapest, reversing gains of as much as 12 percent to end their longest winning streak since listing in November 2003. About 971,000 shares traded, almost nine times the three-month daily average. The stock’s relative strength index slid to 88 today from 89 Feb. 14, still above 70 that indicates to some analysts a security has risen too far and may be set for a reversal.

FHB, Hungary’s ninth-largest commercial lender, has almost tripled in market value since October amid bets it may buy a stake in Takarekbank, an umbrella organization for savings cooperatives. Magyar Takarek Zrt. which is 25 percent owned by FHB, was the sole bidder at a tender to sell the state’s 54.85 percent stake in Takarekbank, Nepszabadsag, a daily newspaper, reported on its website Feb. 8 without citing a source.

“The recent rise cannot be justified by publicly-available information” on the sale, Attila Gyurcsik, a Budapest-based analyst at Concorde Securities brokerage, said by phone today. Some investors have speculated FHB may buy Takarekbank at a “good” price, but recent moves assign a “disproportionate value” to a possible transaction, he said.

Hungary’s government -- which bought a 38 percent stake in Takarekbank from Germany’s DZ Bank AG in 2012 -- seeks to raise local ownership in the banking industry to above 50 percent to boost lending and supporting economic growth.

The government has “firm intentions” of channeling loans to the agricultural industry through the savings cooperatives, state news service MTI reported Feb. 15, citing Janos Lazar, the premier’s Viktor Orban’s chief-of-staff.

In technical analysis, the RSI measures the velocity of a security’s price movement to determine overbought and oversold conditions.

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