BUX Index Down on Falling Turnover This Week

The Budapest Stock Exchange (BSE) share index (BUX) fell on a downward trend this week, closing at 52,169.80 points on Friday, down 0.96% or 506.10 points from a week ago, the state news agency MTI reported in its review Sunday morning. Turnover on the stock market was HUF 56.39 billion, down from HUF 77.70 billion last week, with leading shares performing mixed.     

Investment brokers Equilor Befektetési Zrt. said in a summary sent to MTI that the BUX index fell this week, the rising yield environment and the Russian-Ukrainian conflict also put selling pressure on the Hungarian stock market.

They said that Mol announced on Tuesday that it would call options under its option contract with Unicredit Bank, Commerzbank and ING Bank, with Friday as the settlement date. Following the transaction, the company's treasury stock increased by 74,138,899 shares. The average exercise price was EUR 6.668, 9.09% lower than the closing price on Thursday.

At the same time, target price increases were announced for Mol. Goldman Sachs raised its 12-month target price from HUF 3,000 to HUF 3,700, with the recommendation revised from neutral to buy. mBanku raised their 12-month target price on the company from 3,523 to 3,942, recommendation remains a buy.

It was added that OTP received a target price cut. Autonomous Research lowered its 12-month target price on OTP from HUF 24,422 to HUF 21,178, with the recommendation downgraded from Overperform to Neutral.

It was also reported that Morgan Stanley expects a 30-basis-point rate hike from the National Bank of Hungary (MNB) next week. According to the bank's analysts, the Hungarian base rate could rise from 2.4% to 2.7%, and the central bank could also raise the one-week deposit rate by at least 30 basis points in next week's tender.

On the one hand, strong inflationary pressures may prompt policymakers to increase the spread between the base rate and the deposit rate from 1.6% to 1.8-2.0%, but they may hold off on this move for the time being due to the strengthening forint. Timing will be very important here, as one of the main drivers of the forint's strengthening in January was the November-December series of rate hikes, which saw the one-week deposit rate rise by a total of 220 basis points, Equilor Befektetési Zrt. said in its analysis.

Mol's share price rose the most this week, by 1.21%, ending trading at HUF 2,684 on Friday, with a weekly turnover of more than HUF 7.39 billion.