BUX Index Fell on Rising Turnover This Week

The Budapest Stock Exchange (BSE) share index (BUX) fell on rising turnover this week, closing at 39,331.33 points on Friday, down 0.21% (81.41 points) on the previous week, the state news agency MTI reported Sunday morning.

Turnover rose from HUF 38.25 billion the previous week to HUF 41.03 billion, with the leading shares weakening, with the exception of Richter.

In a summary sent to MTI, Equilor Investment Plc. pointed out that the National Bank of Hungary (MNB) raised the base rate by a much larger than expected, 185 basis points, at Tuesday's rate decision meeting and reduced the asymmetry of the interest rate corridor, while on Thursday the two interest rates were locked together after the MNB announced the one-week deposit tender at 7.75%.

After the interest rate decision, the MNB stressed that it would continue its monetary tightening with decisive steps. The central bank said inflation could peak in the autumn months but remain in the double-digit range in the second half of the year. Its updated projection is for a CPI of 11.0-12.6% this year, 6.8-9.2% next year and around 3% in 2024.

In its commentary, Equilor pointed out that OTP would face a significant appreciation if it were to manage an orderly exit from Russia. According to Bloomberg's semi-annual analysis, Central European banks are on solid footing, but there are still significant regulatory and Russia-specific risks.

The analysis singled out OTP and highlighted that the biggest risk is Russian exposure, which is largely why the bank's share price has been depressed. Bloomberg's analysis said the bank's solid financial position allows it to grow aggressively in the central and southern European region, which could even offset the nearly 10% revenue loss due to Russia, while valuation multiples could rise sharply, it said.

Of the leading stocks, only Richter strengthened this week, rising 1.31%, closing at HUF 6,940 on Friday, with weekly turnover of HUF 6.17 billion. The BUMIX index of small and medium shares closed