CEE MARKETS-Forint, stocks weaker after Hungary announces windfall taxes

Rainforest Resources

27/05/2022 10:53

By Anita Komuves
    BUDAPEST, May 27 (Reuters) - The Hungarian forint edged down
while stocks extended losses on Friday as markets assessed the
impact of new windfall taxes worth 800 billion forints ($2.19
billion) on "extra profits" earned by banks, energy companies
and other firms.
    The taxes aim to help reduce the budget deficit this year
and next, the Hungarian government said on Thursday. Some 60% of
the deficit adjustment will come from spending cuts while the
new taxes will make up the rest.  urn:newsml:reuters.com:*:nL2N2XI0BI
    The forint  EURHUF=  eased 0.06% and was trading at 393 per
euro on Friday, halting its steep losses from the previous two
sessions. Budapest's stock index  .BUX  eased 0.65%, adding to
Thursday's losses when the government's announcement rattled
investors, sending bluechip stocks sharply lower.
    "The forint stabilized but it is stuck at a weak level," an
FX in Budapest said. "The market was definitely not happy about
this package, but it could help if the government really tries
to rein in the deficit."
    Long-term government bond yields were stable after a
20-basis-point rise in the previous session, a fixed-income
trader said. The yield on the 10-year bond was about 6.98%.     
    
    Investors were also eyeing the rate-setting meeting of the
central bank scheduled for next Tuesday where a Reuters poll of
analysts expects the bank to slow the pace of its rate hikes,
raising its base rate by 60 basis points to 6.0%.  urn:newsml:reuters.com:*:nL5N2XJ1GG  
    Deputy Governor Barnabas Virag said on Tuesday the central
bank could slow down the pace of rate rises to about half of the
100 basis point steps delivered in the past two months.
 urn:newsml:reuters.com:*:nS8N2VB00H
    On Friday, the bank said it will hold four FX swap tenders
providing euro liquidity and two short-term discount bill
auctions in June, in order to "strengthen the effectiveness of
monetary transmission. "  urn:newsml:reuters.com:*:nS8N2WO0GY
    Elsewhere, the Polish zloty was unable to benefit from the
widely expected approval of a judicial reform bill that clears
the way for Poland to get billions in COVID-19 recovery funds
from the European Union.  urn:newsml:reuters.com:*:nL5N2XI4A0
    The zloty  EURPLN=  was 0.13% lower and trading at 4.6080
per euro. 
    The Czech crown  EURCZK=  and the Romanian leu  EURRON= 
were flat. 
    
    
                  CEE      SNAPSH   AT                   
                  MARKETS  OT      1122            
                                   CET             
                           CURREN                        
                           CIES                    
                           Latest  Previo  Daily   Change
                                   us              
                           bid     close   change  in
                                                   2022
 EURCZK  Czech                0       0       %       %
 EURHUF  Hungary             00      00          
 EURPLN  Polish                                  
 EURRON  Romania                                      %
 EURHRK  Croatia                              %  
 EURRSD  Serbian             00      00       %       %
         Note:    calculated from          1800          
         daily                             CET     
         change                                    
                                                         
                           Latest  Previo  Daily   Change
                                   us              
                                   close   change  in
                                                   2022
 .PX     Prague    .PX     1313.9  1310.5   +0.26     
                                6     800       %  
 .BUX    Budapes   .BUX    38978.  39234.  -0.65%  -23.15
         t                     13      20               %
 .WIG20  Warsaw   <.WIG20  1807.9  1827.0  -1.04%  -20.25
                  >             8       1               %
 .BETI   Buchare   .BETI   12398.  12323.   +0.60  -5.08%
         st                    10      91       %  
 .SBITO  Ljublja  <.SBITO  1134.5  1131.0   +0.30  -9.64%
 P       na       P>            0       7       %  
 .CRBEX  Zagreb   <.CRBEX  2092.5  2088.0   +0.22   +0.63
                  >             1       1       %       %
 .BELEX  Belgrad  <.BELEX  818.69  816.56   +0.26  -0.25%
 15      e        15>                           %  
 .SOFIX  Sofia    <.SOFIX  613.82  610.42   +0.56  -3.44%
                  >                             %  
                                                         
                           Yield   Yield   Spread  Daily
                           (bid)   change  vs      change
                                           Bund    in
         Czech                                     spread
         Republi                                   
         c                                         
 CZ2YT=                              0      ps  
 CZ5YT=                              0      ps  
 CZ10YT                             0      ps  
         Poland                                          
 PL2YT=                                     ps  
 PL5YT=                                     ps  
 PL10YT                                    ps  
                  FORWARD                                
                           3x6     6x9     9x12    3M
                                                   interb
                                                   ank
         Czech                                  
         Hungary                                 
         Poland                                  
         Note:    are for ask                            
         FRA      prices                           
         quotes                                    
         ****************************************        
         **********************                    
 


 (Additional reporting by Alan Charlish in Warsaw; Editing by
Krishna Chandra Eluri)
 ((komuves.anita@thomsonreuters.com)(+36 70 795 8815))
 
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