S&P Upgrade Fuels Hungarian Rally as Door Opens for New Funds
- Commerzbank, Legal & General see further gains this week
- KBC sees central bank facing dilemma on forint appreciation
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Hungarian Eurobonds extended the biggest rally in more than two years after a surprise return to investment grade opened the way for bondholders tracking low-risk benchmarks to buy the debt.
Bonds and stocks rallied after S&P Global Ratings on Friday became the second agency to place Hungary above junk, allowing funds that can only buy investment-grade assets to start piling into the country. According to Legal & General Group Plc, that means the nation’s local-currency yields will trade in line with Poland, rated three steps higher, and Eurobonds may move closer to Romanian debt.