Hungarian Bank Hits a Six-Year High as Chairman's Fund Invests

  • OTP extends gains a sixth day to 11% after fund buys shares
  • Fund related to Csanyi also buys holdings in oil refiner Mol

OTP Bank Nyrt., Hungary’s largest lender, rose to the highest in almost six years after a fund related to the bank’s chairman and country’s richest man bought $8.9 million worth of stock.

Sertorius Global Opportunities, a fund managed by CSAM Asset Management in which Chairman Sandor Csanyi has a "a qualified influence," purchased 400,000 shares on March 4 at an average of 6,284 forint ($22.4) per share, OTP said in a regulatory statement late Monday. OTP shares advanced 3.4 percent to 6,602 forint by the close in Budapest on Tuesday, extending a six-day rally to 11 percent.

"The chairman has a good track-record on the timing of share transactions and spurs gains when a purchase can be related to him," David Sandor, an analyst at KBC Groep NV’s Hungarian brokerage unit, said by phone. Both the fundamental and technical outlook is positive for the stock with a potential for gains to more than 7,000 forint, he said.

OTP’s gains also reflect an improving profit outlook after it said it doesn’t expect negative one-time items to hit earnings in 2016 and as the government in Hungary pledged to cut the European Union’s highest bank tax, according to Sandor.

Csanyi sold shares worth $35 million in 2013, a prelude to a decline of 30 percent in the share price. Csanyi, who has a net worth of 165 billion forint ($587 million) according to the news website, used proceeds from that sale to finance domestic investments in the agriculture and food industry. Sertorius also bought shares of Mol Nyrt., the refiner for which Csanyi is a board member, for 1.06 billion forint.

OTP’s relative strength index rose to 70 on Tuesday, a level some traders say signals a security is overbought. About 2.51 million shares were traded, or almost triple the full-day average over the past three months. KBC’s Sandor recommends buying OTP on declines amid what he sees as potential for a short-term correction to near 6,300 forint after the gains.

Csanyi directly and indirectly owned 780,912 shares at the end of 2015, representing about 0.28 percent of OTP’s voting rights, regulatory filings show. The largest shareholder is the Rahimkulov family, which owned 24.8 million shares, amounting to 8.85 percent.

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