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.