BUX Index Strengthened This Week on Rising Turnover

The Budapest Stock Exchange (BSE) share index, the BUX, rose by 192.31 points, or 0.34%, to 57,529.95 points compared with the close of last week, MTI reported Sunday morning along with a brief analysis of the week. Total turnover rose from HUF 29.234 billion to HUF 34.774 billion.

Three of the BSE's four leading stocks were targeted for a price increase, and the third-quarter results of the four blue chips reporting during the week generally exceeded analysts' expectations, according to Equilor's weekly summary sent to MTI.

On Monday, Autonomous Research raised its 12-month target price on OTP from HUF 17,554 to HUF 17,846 with an unchanged upside recommendation, while Concorde changed its target price on Magyar Telekom from HUF 600 to HUF 950 with an unchanged buy recommendation, Equilor analyst Zoltán Varga wrote.

On Friday, a target increase was received on Richter: Santander Biuro Maklerski raised its target price on Richter from HUF 10,000 to HUF 11,400 with an unchanged upside recommendation. On Wednesday, the pharmaceutical company published its third quarter results. Revenue was in line with analysts' expectations, but the earnings came as a positive surprise. Although profit after tax was below the record level of a year ago, it exceeded analyst consensus by 33%. Management also expects pharmaceutical sales and operating profit to exceed the original annual forecasts.

Magyar Telekom reported better-than-expected revenue and higher profits after the mid-week close. Third-quarter revenue exceeded analyst consensus by 0.8%, driven by the inflation-linked tariff adjustment introduced in March and continued strong demand. EBITDA exceeded consensus by 1.7%, while profit after tax increased by 34% to HUF 22.9 billion compared to the base period. Management has not changed its expectations for this year.

OTP, which reported on the last day of the week before the market opened, was a positive surprise. The group's total income rose 33% year-on-year in the third quarter, 9% above consensus, with net interest income up 31% and net fee and commission income up 18%. Profit after tax increased by 63% year-on-year, driven by a good performance from foreign subsidiary banks. Management has fine-tuned this year's expectations: organic growth in the performing loan book at constant exchange rates could reach 5%, net interest margin could improve further, credit risk expense ratios could decline, while adjusted return on equity (ROE) could exceed 25% in 2023, up from 18.8% last year.

In a statement early Friday morning, Mol reported a significant increase from July to September compared to the second quarter. Net EBITDA came in at USD 976 million, 10.4% above analyst consensus. According to Equilor's rating, the positive news is that management raised its 2023 EBITDA guidance from USD 2.5 billion to USD 2.8 billion. Although the tax burden may decrease in the near future, the company's tax burden remains very high, they wrote, noting that citing the uncertain environment and tax burden, Mol's investment activity decreased in the third quarter and the first nine months of the year.

Magyar Telekom was the biggest gainer this week. Its share price rose by 2.89%, or HUF 17, to HUF 606 on weekly turnover of HUF 2.723 billion.

Richter strengthened by 1.07% to HUF 95, closing at HUF 8,940 on Friday, with weekly turnover of HUF 5.559 billion.

The OTP rose 1.31% this week, up HUF 180 to HUF 13,945 on turnover of HUF 18.186 billion.

Mol's share price fell by 1.9% to HUF 56 compared to last week's close, closing at HUF 2,844 on Friday, with a weekly turnover of over HUF 5.579 billion.

The BUMIX index of small and medium-sized shares closed the week up 0.40%, 19.78 points at 4,987.64.