Hungarian population’s assets are many on paper

According to vg.hu, household financial assets can reach HUF 40 billion soon. The statistics are provided by the Hungarian central bank. The population owned HUF 39 574.4 billion in September. If this is divided by the roughly 4.1 million households it means more than 9.6 million forint saving per household. Of course, the population has debts as well, but the net financial assets are still about HUF 7.7 million – in theory.

The figures also take into account the savings that are basically unreachable for the investors. For example, the amount that the former members of the private pension systems could withdraw from the state was HUF 2846.2 billion in late September.

However, the Pension Reform and Debt Reduction Fund – which managed the assets of the pension funds transferred to the state – ceased to exist in late January, and its assets were already gone by the end of 2013. Because of a methodological change this amount also belongs to the savings of the households. Previously, such a transfer of capital would reduce the household savings and increase the assets of the state, but the new accounting shows that the asset takeover did not affect the balance of the two sectors; the state’s obligation will gradually disappear in 35 years.

There is an “other equity” category as well, including ownership shares in unlisted companies worth HUF 10 thousand billion. These values – on paper at least – continue to grow, they increased by 10% annually in recent years. However, these shares are illiquid investments, so households could not sell them too quickly if necessary.

Savings in more easily negotiable instruments are also included in the statistics. There are debt securities worth around HUF 40 billion issued by “other sectors”. According to vg.hu, the real Quaestor bonds also belong here, which are likely to be worthless, but their exchange rates almost changed nothing since the scandal broke out at the brokerage firm. The Hungarian National Bank said that the market value of the bonds is unknown. They will be able to assess them if the fate of the bonds becomes clear.

Copy editor: bm

Source: http://www.vg.hu