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Investors bet on a new Tisza government? Hungary’s stock market rallying ahead of elections
Hungarian financial markets have seen a sharp upswing in recent months, with international investors increasingly positioning themselves for a potential political change with Tisza Party’s favourable position in the polls, ahead of the upcoming parliamentary elections.
Big players think Péter Magyar can defeat Viktor Orbán?
According to a recent Bloomberg analysis, global market players are showing growing confidence in Hungarian assets, driven largely by expectations that the opposition Tisza Party could defeat the long-ruling Fidesz government.
Hungarian equities, bonds and the forint have all benefited from this optimism. The BUX stock index rose by 16 per cent in January alone, marking its strongest monthly performance in five years.
At the same time, the forint has climbed to its highest level against the euro in nearly two years, while the risk premium demanded by investors on Hungarian government bonds has narrowed significantly compared with German bunds.
Hungary’s market is climbing, but why are investors positive?
Bloomberg notes that Hungary has become one of the more popular destinations within emerging markets, as investors bet that a change in government could lead to a meaningful economic reset.
Market participants believe a Tisza-led administration would seek to restore closer ties with the European Union, potentially unlocking more than USD 20 billion in currently frozen EU funds and improving the country’s policy credibility, writes 24.hu.
Expectations of a more predictable economic environment and stronger institutional safeguards, including tougher action against corruption, are also feeding into the positive sentiment.
Several analysts argue that Hungarian assets remain relatively undervalued, meaning even modest political reassurance could trigger further re-pricing across markets.
However, investors are not blind to the risks. While a renewed Fidesz victory is expected to prompt only a limited negative reaction — largely because it would preserve the existing policy framework — the most concerning scenario for markets would be an unclear election outcome.
The problem is that a fragmented parliament without a stable majority could lead to political paralysis and renewed economic uncertainty.
The polls say Tisza could win in April
Polling data cited by Bloomberg suggest the Tisza Party, led by Péter Magyar, is ahead among committed voters, though the size of its lead varies depending on the survey. For financial markets, clarity matters more than the identity of the winner, with stability seen as essential for maintaining investor confidence.
Major financial institutions are already adjusting their strategies accordingly. Morgan Stanley, for example, has advised clients to consider purchasing forint-denominated Hungarian government bonds, particularly longer-dated securities that could gain value following the election.
Portfolio managers also expect some form of fiscal consolidation after the vote, regardless of who forms the next government.
Real journalism isn’t filled with speculation or with making one candidate look better than the other; an old trick.
If you would have bothered to read the article, you would know that it was based on “recent Bloomberg analysis” and the article is good journalism.
But why spend 3 min to read facts when you can make a quick populist comment based on the headline…
And if you had been bothering yourself to read Bloomberg, for years, you, Dear Ostanus, would know that Csilla is dead right – they, Bloomberg, are incredibly false and misleading.
Their war coverage, alone, marks them as the worst sort of liars.
@mouton is not some American redneck. He is running a script from the KGB playbook called “active measures”. Look it up. In summary: seeding doubt, inflaming division, pose as someone you’re not to manufacture the appearance of grassroots support for Orban’s Kremlin-friendly agenda.
The tell? Real people have messy, inconsistent opinions. They post about their lives, their interests, their local concerns. @mouton posts like he is clocking in for a shift.
To everyone else: this is what information warfare looks like. Don’t engage, don’t amplify, just flag and move on.
Money does not lie. As a trader I put my own ideology to the side when I invest. I’ve seen many things and a fitting example would be a company’s share price rising dramatically when a failed CEO’s departure is announced. This is the same and for any thinking person it tells you how discredited the economic management of the Fidesz party is.
I’m biased against Fidesz but my take is that a win by them will cause more than just a moderate decline in the forint and the Hungarian stock market. This may be a point of no return for a long time and many investors will throw in the towel on Hungary as they see that a form of neo-fascism that obstructs free markets is completely entrenched. Hungarians will decide and we will all live with the consequences.
Thank you for these interesting and thoughtful comments, Dear Larry.
Maybe some Western investors will do as you predict – shy away from Hungarian investment, but, if Fidesz wins, I doubt Arab, Turkish, Russian, Chinese investors will shy away.
No, if anything they, Eurasian investors, will double down on what they regard as a stable and sane country and government.
And let me add : I doubt Israeli investors will shy away from a continuance of Fidesz Governance.
You don’t understand at all do you? Money from all of those countries you mention use the same metrics to make their investment decisions. They are not going to put their money in Hungary unless they think it wise to do so and Hungary without Tisza is a shit bet.
Thank you for your answer, Dear Larry.
I respectfully disagree that investors in Shanghai or Moscow, not to mention their governments, will use the same metrics as those on Wall Street.
Orbán has his 4th consecutive term ending now.
If he didn’t ruin the economy in 16 years, he will not do so in the next 4.
Btw did you remember what the Hungarian econkmy was in 2010? I tell you: the IMF was about to declare Humgary bankrupt.
And unlike Germany, where gas prices cause making shampoo unviable as a business, all the Western European corporations are flooding the Hungarian job markets for over a decade now.
In fact, the investments simply don’t stop coming, and the lack of workforce pushing wages higher is the main hinderance for the corporations in Hungary.
So no, your “opinions” (and I am very, generous to call them that) are further from the reality then Elon Musk is from the Mars.
Since 2010, Hungary has been a major beneficiary of EU funds, with net transfers often exceeding 3% of its annual GDP. These funds, crucial to Hungary’s economy, peaked in 2014, with annual receipts of €4.5 to €5 billion between 2018 and 2023.
These billions of euros of EU money from other EU members, net contributors, have kept Hungarys economy afloat. That will change with EU support money now being frozen due to Fidesz government violations of EU laws.
I’d say, the stock market rallies, because businesses see through Tisza propaganda, know they will lose, so Hungary will still have natural gas, and therefore an economy, when the EU will freeze over and fall apart.
As I am not Hungarian I have no emotions about Hungarian politics but I focus on data and rather long term than incidental.
The data is simple:
– GDP per capita in Hungary is 3rd lowest in EU (only above Bulgaria and Romania) and soon will be the lowest taking into account the growth rates
– GDP growth is fourth lowest in EU far behind most of CEE countries (only above Germany, Austria, Finland)
– Just to remind, after the fall of communism Hungary had highest GDP in CEE countries
If making the comparison to the business typical owners experiencig such performance would let CEO go long time ago.
Thanks @CEE. Facts and data rule!