stock exchange

The most important business and finance news from Hungary – 7th week

hungary diary alföldi kokárdás

See below main business and financial news from the previous week:

NEW HUNGARIAN OPPORTUNITIES IN SUDAN

The international sanctions against Sudan were in effect for exactly two decades – but now that they have been dissolved, the country became one of the most promising destinations in Africa. And this offers many new opportunities to Hungarian companies as well. Read more HERE.

S+P AFFIRMS HUNGARY ‘BBB-/A-3’ RATING; OUTLOOK ‘POSITIVE’

Standard and Poor’s Global Ratings on Friday affirmed Hungary’s ‘BBB-/A-3’ long- and short-term foreign and local currency sovereign credit ratings. The outlook on the ratings remained ‘positive’. “Hungary’s strong external profile and track record of fiscal restraint support the sovereign ratings,” S+P said.

COMPANY OF FORMER GE HEAD IN HUNGARY TO BUY LIGHTING BUSINESS

The company of the former head of the Hungarian unit of General Electric (GE), Joerg Bauer, agreed to buy GE’s lighting business in Europe, the Middle East, Africa and Turkey, as well as its global automotive lighting business, GE said. The sale includes GE’s five plants in Hungary, regional sales offices and other properties.

RICHTER Q4 PROFIT FALLS 70 PC; FINANCIAL LOSS, TAX PAYMENTS WEIGH

Hungarian drugmaker Gedeon Richter’s fourth-quarter net income fell by an annual 70 percent to 6.6 billion forints (EUR 21m), dragged lower by a financial loss and tax payments, an earnings report showed. Richter booked a 1.0 billion forints net financial loss in Q4, compared with a net financial gain of 9 billion in the base period.

CG POWER AND INDUSTRIAL SOLUTIONS TO PART WITH HUNGARIAN BUSINESS

India’s CG Power and Industrial Solutions agreed to sell its Hungarian business to Ganz Villamossági and Alester Holdings at an enterprise value of 38 million euros. The transaction, subject to regulatory approval, is expected to be closed by the end of March.

OPUS GLOBAL TO CONSOLIDATE MÉSZÁROS HOLDINGS

Listed holding company Opus Global announced plans to consolidate a number of the assets of its owner, the investor and Fidesz mayor Lőrinc Mészáros. Acquiring the stakes with the issue of new shares could lift Opus’s net assets by as much as 80 billion forints, the company said.

MOL BOARD CREATES NEW SEAT FOR CONSUMER SERVICES EXEC

Hungarian oil and gas company MOL said its board added a new member to oversee consumer services. MOL said the position of Executive Vice President for Consumer Services was created to better support the realisation of strategic goals. Transforming its traditional retail business into a consumer services business is a key element of MOL’s 2030 strategy.

ALDI BUYS HUNGARIAN DAIRY BRAND

The local unit of German-owned discount supermarket Aldi acquired the Kokárdás brand of Hungarian dairy Alföldi Tej. The brand translates as “cockade” in English. The Hungarian cockade, a ribbon rosette of the national colours, was adopted by revolutionaries in 1848 as a symbol of independence and is still worn by Hungarians on the March 15 national holiday.

HUNGARY WITHHOLDS SUPPORT FOR EU-MERCOSUR TRADE DEAL

Hungary became the first European Union member state to withhold its support for a free trade agreement Brussels is negotiating with the four founding Mercosur states: Argentina, Brazil Paraguay and Uruguay. Agriculture Minister Sándor Fazekas said Hungary will not support a free trade agreement that results in dumping and the import of often low-quality food products to European markets.

BOURSE MANAGEMENT FLOATS IDEAS FOR CATEGORY RESTRUCTURING

The management of the Budapest Stock Exchange made a number of proposals on a restructuring of the bourse’s system of categories in a document prepared for consultations. The management is proposing scrapping the IPO requirement for shares in the Prime and Standard categories, reducing the minimum capitalisation threshold for listing in the Prime category, making the assignment of sponsors mandatory for the Prime category, introducing quantitative criteria in the Standard category, harmonising free-float criteria with listing criteria and terminating the T category for “technical” listings.

Photo: MTI

HungaryTrends – The most interesting business and finance news from Hungary

See below MTI’s main business and financial news from the previous week: 

WARSAW-BUDAPEST ROUTE: LOT’S FIFTH DAILY FLIGHT

As of the end of March next year, LOT will be operating its Warsaw-Budapest route with a frequency of five flights per day. The Bombardier Dash-8 Q400 arrives in Budapest in the evening for an overnight stop and returns to the Polish capital the following morning. Read more HERE.

WHERE DO HUNGARIANS SPEND NEW YEAR’S EVE?

The list is based on the search data about the period between 29 December 2017 and 2 January 2018. On the contrary to the other V4 countries and Serbia, Hungarians prefer staying within the borders for the last days of the year. It is proven by the fact that 13 of 20 searches are related to destinations within the country. Read more HERE.

ALL YOU NEED TO KNOW IF YOU WANT TO BUY A FLAT IN HUNGARY

We can see new houses being built every day in Hungary, but how many houses are built, and where?

In their analysis, they checked the parts of the capital where customers can choose from the widest range of flats. These differ in ground space, the arrangement of rooms and price as well. Read more deatils HERE.

HUNGARY STATE DEBT DECLINES TO 72.4 PC AT END-Q3

Hungary’s state debt, calculated according to Maastricht rules, stood at 72.4 percent of GDP at the end of the third quarter, down from 73.6 percent at the end of Q2, the National Bank of Hungary said in an updated report on financial accounts data.

MINISTRY CUTS MID-TERM FORECAST FOR HOUSEHOLD CONSUMPTION GROWTH

The economy ministry lowered its projection for next year’s household consumption growth in a fresh mid-term economic and fiscal forecast. The projection was lowered to 4.9 percent from the official 5.4 percent forecast in the country’s updated Convergence Programme released in April.

POLAND’S MCI.EUROVENTURES ACQUIRES NETRISK.HU

Enterprise Investors said a private equity fund it manages has sold 100 percent of shares in Netrisk.hu,

Hungary’s top online insurance broker, to MCI.EuroVentures of MCI Capital Group, a private equity firm listed on the Warsaw Stock Exchange, for 56.5 million euros. The Polish Enterprise Fund (VI) acquired Netrisk.hu for 23 million euros in 2010.

GOVT MUST WEIGH FISCAL, ECONOMIC IMPACT OF HOME CONSTRUCTION VAT RATE EXTENSION

Hungary’s government has to consider the fiscal and economic impact of extending the preferential VAT rate on home construction, the state secretary for government communications said in an interview published in  business daily Világgazdaság. “The industry’s proposal is with the economy ministry, and the fiscal and economic effects of an extension must be reviewed. I won’t exclude the possibility of a favourable decision being taken,” Bence Tuzson told the paper. Lawmakers lowered the VAT rate on home construction to 5 percent from 27 percent from 2016, but the rate is set to revert to the former level, which is Hungary’s main VAT rate, from the beginning of 2020.

Photo: MTI

Hungarian government raises capital of Széchenyi Investment Fund

Daily News Hungary economy

Hungary’s government has raised the capital of the Széchenyi Investment Fund (SZTA), an EU-supported venture capital fund established by the state to invest in SMEs, by 8 billion forints (EUR 26.3m) and extended its run, Economy Minister Mihály Varga said on Monday.

The investment period of the fund, established in 2011, was extended until the end of 2025, Varga said. The deadline for exiting its investments was extended until 2030, he added.

The government also decided to launch in September two investment funds under SZTA’s aegis targeting businesses in central Hungary and in areas in neighbouring countries with ethnic Hungarian populations, Varga said. The Irinyi II Venture Capital Fund will be launched with 8 billion forints to invest and the Carpathian Basin Business Development will start operating with 20 billion forints.

The government is launching a third fund with 20 billion forints to support listings on the Budapest Stock Exchange, Varga said. The National Bourse Development Fund will also start operating in September.

Hungarian business and financial news from the previous week

See below MTI’s main business and financial news from the previous week:

MOL Q2 PROFIT CLIMBS 12 PC

Second-quarter net income of oil and gas company MOL rose by an annual 12 percent to 88.8 billion forints (EUR 291.4m), an earnings report showed. Earnings were over the 70.1 billion forint estimate by analysts polled by Portfolio.hu. The company raised guidance for full-year clean CCS EBITDA to “above 2.3 billion US dollars” from “at least 2 billion US dollars” earlier.

MTEL Q2 PROFIT EDGES UP TO HUF 10.9 BN

Magyar Telekom’s second-quarter after-tax profit edged up an annual 2 percent to 10.9 billion forints, lifted by lower taxes, an earnings report showed. Revenue rose by 9 percent to 153.5 billion forints, but direct cost of sales jumped 28 percent to 62.7 billion forints. EBIDTA fell 2 percent to 47.9 billion forints. MTel booked income tax of 3.9 billion forints for Q2, down 27 percent from the base period. Guidance for full-year revenue was raised to “around 580 billion forints” from 560 billion forints earlier

TWO-THIRDS OF VISITORS TO HUNGARY DURING SWIMMING WORLDS PLAN TO RETURN

As we wrote before, two-thirds of foreigners who visited Hungary during the FINA World Aquatics Championships in July definitely plan to return to the country, a survey by the Hungarian Tourism Agency showed. Four of five visitors said they would recommend Hungary to their friends. The FINA Championships attracted 485,000 spectators on July 14-30.

Another representative survey said, fully 80 percent of Hungarians asked said that hosting the recent world aquatics championships was a good idea.

HUNGARY HOME PRICE INCREASE SLOWS TO 11.6 PC IN Q1

The increase in home prices in Hungary slowed to 11.6 percent year-on-year in the first quarter, a report released by the National Bank of Hungary showed. The annualised increase slowed from 15.2 percent in Q4, 14.9 percent in Q3 and 12.7 percent in Q2 of last year. In Budapest, home prices were up 16.9 percent year-on-year in Q1.

Student rental accommodation in Budapest is being advertised for a monthly 150,000 forints (EUR 490) on average, according to estate agents.

HUNGARY INDUSTRIAL OUTPUT CLIMBS 4.0 PC IN JUNE

Hungary’s industrial output rose by an annual 4.0 percent in June, the Central Statistical Office (KSH) said in a first reading of data. Adjusted for the number of workdays, output was up 6.5 percent. The unadjusted increase slowed from an 8.8 percent rise in May. The adjusted increased accelerated from 6.2 percent.

TAKARÉKBANK, SAVINGS COOPS BOOST COMBINED STAKE IN FHB TO 86.76 PC IN BUYOUT OFFER

Takarekbank acquired a little more than 20 million shares of FHB Mortgage Bank in a pubic purchase offer, bringing the stake it holds in the lender, together with stakes held by savings cooperatives with whom it acts in concert, to 86.76 percent, FHB disclosed on the website of the Budapest Stock Exchange. Takarékbank offered 533 forints per share for FHB’s “A”-series ordinary shares and “B”-series preference shares, and 5,330 forints per share for the bank’s “C”-series ordinary shares between June 26 and July 31.

HOME LOAN OUTLAYS HIGHEST IN YEARS

Hungarian banks signed contracts for 66.8 billion forints of new home loans in June, 37.4 percent more than in the same month a year earlier, and 8.9 percent more than in May, data released by the National Bank of Hungary showed. Outlays were last higher in October 2003.

NBH SELLS EIFFEL PALACE FOR EUR 53.8 M

The National Bank of Hungary (NBH) said it sold the landmark Eiffel Palace office building in the centre of Budapest for net 53.8 million euros to a fund managed by Corpus Sireo, base in Luxembourg. The NBH called an open tender for the sale of the building in March 2017. It paid net 45.3 million euros for the property in the summer of 2014.

HUNGAST ACQUISITION OF SODEXO MAGYARORSZÁG CLEARED

Hungary’s Competition Office (GVH) said it cleared family-owned cafeteria company Hungast Holding’s takeover of peer Sodexo Magyarország. The companies’ combined market share of Hungary’s school cafeteria business is 35-45 percent, but GVH said the transaction had no verifiable impact on horizontal market competition.

OTP JELZÁLOGBANK HOME LOAN PRODUCTS CERTIFIED “CONSUMER-FRIENDLY” BY NBH

Home loan products offered by OTP Jelzálogbank, the mortgage arm of Hungary’s biggest commercial lender, have been certified “consumer-friendly” by the National Bank of Hungary, the central bank said. The NBH recently rolled out the consumer-friendly home loan certification to counter high interest margins and a low rate of borrower refinancing. Lenders could apply for the certification from June 1. Products offered by MKB Bank, K+H Bank, Erste, FHB Commercial Bank and 50 members of Hungary’s integrated savings cooperatives have also been certified.

Photo: http://eiffelpalace.hu

Hungary ready to cooperate with China-CEE Fund

Budapest, May 15 (MTI) – Economy Minister Mihály Varga signed a cooperation agreement with the heads of Industrial and Commercial Bank of China involving its 10 billion euro China-Central and Eastern European Fund in Beijing on Saturday, the ministry said on Monday.

The fund targets infrastructure investments, manufacturing upgrades, mass market consumer goods and mergers and acquisitions. The cooperation agreement confirms Hungary’s openness to cooperating with the fund, Varga said.

The minister is in Beijing for the One Belt, One Road Forum. On Sunday, he joined a number of finance ministers from Europe and Asia as well as Chinese banking leaders for a panel discussion on financing.

He also spoke at the signing of a contract between the Shanghai Gold Exchange and the Budapest Stock Exchange on establishing a gold trading platform in Hungary, and he met with the chairman of the Asian Infrastructure Investment Bank.

Hungary, China development banks sign international credit agreement

The state-owned Hungarian Development Bank (MFB) has signed an international lending agreement with the China Development Bank (CDB), MFB said on Monday.

The agreement was signed on the occasion of the One Belt One Road Forum in Beijing on Saturday.

It will allow MFB to lend 79 million euros to Hungarian chemicals company BorsodChem, owned by China’s Wanhua group, for environmental investments, and CDB to refinance the loan.

Photo: MTI

Hungarian public companies are paying 548 million euros of dividend

wage money Euro

Public companies are soon beginning to pay dividend from last year’s profit. If the general assemblies approve, shareholders can receive more than 170 billion forints (548 million euros) worth of dividends, portfolio.hu writes.

Hungarian public companies are beginning to release their proposals which reveal how much dividend companies are paying. With the highest dividend stocks, even 5-6pc dividend yield can be reached, which is especially attractive in the current low interest rate environment.

MOL pays the biggest dividend with 58 billion forints (186 million euros), followed by OTP with 53.2 billion (171 million euros), Magyar Telekom with 26 billion (83 million euros), and Richter with 19.8 billion forints (63 million euros).

As for dividend yield, the traditional distributing shares are at the top. Nyomda has a dividend yield of 6.3pc, Émász 6.2pc, and Elmű 6pc. Telekom has a dividend yield of 5.1pc calculated with 25 forints per shares, and in the low interest rate environment, the 3.1pc dividend yield of MOL shares produces relatively good results as well.

[button link=”https://dailynewshungary.com/hungary-trends-previous-week-business-finance-5/” type=”big” color=”red” newwindow=”yes”] Hungary Trends – The previous week in business and finance[/button]

So far, Hungarian public companies are paying 173 billion forints (548 million euros) in dividend this year, which is the second highest sum since 2006. The record-holding year is 2008 when 203 billion forints (653 million euros) worth of dividend was paid. The current sum in not final as FHB, Opimus, and Zwack have not yet announced how much they will be paying.

Looking at the recent trends, Magyar Telekom has been lagging behind MOL and OTP since the financial crisis. The company didn’t pay any dividend for years due to the changed operating environment and special taxes. The dividend of MOL has been consistently around 50-60 billion forints in recent years, it even rose during the past two dividend payments, and OTP has been doing well enough to raise their dividend continuously since 2011.

Ce: bm

Hungarian government and Bank of China sign strategic cooperation agreement – UPDATE

Budapest, January 23 (MTI) – Hungary’s government and Bank of China (BoC) have concluded a strategic cooperation agreement.

The document was signed by state secretary of foreign affairs and trade László Szabó and BoC Chairman Tian Guoli in Budapest on Monday in the presence of Prime Minister Viktor Orbán.

Economy Minister Mihály Varga said the agreement would help further intensify Hungarian-Chinese economic relations.

Photo: MTI

China’s biggest commercial bank has also signed cooperation agreements with the National Bank of Hungary, the Budapest Stock Exchange, the State Debt Management Agency and Eximbank.

The Bank of China and China Unionpay will jointly issue a yuan debit card in Hungary, Tian Guoli said.

This will be the first yuan bank card in central and eastern Europe, he added.

The cards will be managed in Hungarian forint and Chinese yuan and will be accepted by more than 2,000 points of sale and hundreds of ATMs, Tian Guoli said.

The Bank of China plans to introduce the yuan bank cards in Prague, Vienna and Belgrade as well, he added.

UPDATE

Speaking at a press conference later in the day, Szabó and Tian said the agreement would “open a completely new chapter” in financial cooperation between Hungary and China.

Praising the agreement, Tian affirmed the Bank of China’s support for Hungary’s economic and social progress. He said the Hungarian government’s eastern opening strategy was perfectly in line with that of China’s One Belt, One Road initiative aimed at establishing a link between East Asia, the Middle East, Africa and Europe.

Tian presented a 20 million forint (EUR 64,540) grant to the Hungarian-Chinese Bilingual Primary and Secondary School, which the school will use to set up a Chinese language lab.

Under the pact, the bank will contribute to financing Hungarian projects in line with the goals of the One Belt, One Road initiative, Szabo said, adding that in the future, the BoC will encourage further Chinese investments in Hungary.

Hungary wants to become a “bridgehead” for Chinese goods and services destined for Europe, and vice versa, he said.

The agreement will also strengthen the BoC’s ties with Eximbank and the Hungarian Investment Promotion Agency (HIPA), and the bank will also promote Hungary in China as a viable European investment destination, he said.

Szabó noted that in 2015 Budapest became the home of the BoC’s first renminbi (RMB) clearing centre in Europe outside the euro zone.

Photo: MTI

BUX hits new record high again, currency exchange – Hungarian forint – 05.01.2017.

Budapest, January 5 (MTI) – The Budapest BUX share index closed Thursday at a record 32,750 points, up 0.31 percent, with bourse turnover of 13.2 billion forints (EUR 42.7m). Official forint fixing of the National Bank of Hungary:

Australian dollar 214.37
Brazilian real 91.39
Bulgarian lev 157.88
Canadian dollar 220.97
Chinese yuan 42.69
Croatian kuna 40.74
Czech crown 11.42
Danish krone 41.53
Euro 308.78
Hong Kong dollar 37.91
Iceland krona 2.6
Indian Rupee 4.33
Indonesian Rupiah (100) 2.2
Israeli shekel 76.28
Japanese yen (100) 252.05
Malaysian Ringgit 65.54
Mexican peso 13.72
New Romanian lei 68.49
New Zealand dollar 204.99
Norwegian kroner 34.28
Philippine Peso 5.93
Polish zloty 70.55
Pound sterling 361.66
Russian ruble 4.87
Serb dinar 2.5
Singapore dollar 204.96
South African rand 21.48
South-Korean won (100) 24.74
Swedish krona 32.42
Swiss franc 288.4
Thai baht 8.22
Turkish lira 81.06
Ukrainian hryvna 11.19
USA dollar 293.94

Photo: Daily News Hungary

Budapest BUX hits record, currency exchange – Hungarian forint – 02.01.2017.

Budapest, January 2 (MTI) – The Budapest BUX share index closed Monday at a record 32,099.05 points, up 0.30 percent, with bourse turnover of 2.1 billion forints (EUR 6.8m). Official forint fixing of the National Bank of Hungary:

Australian dollar 211.47
Brazilian real 90.66
Bulgarian lev 158.2
Canadian dollar 220.00
Chinese yuan 42.49
Croatian kuna 40.99
Czech crown 11.45
Danish krone 41.61
Euro 309.4
Hong Kong dollar 38.04
Iceland krona 2.60
Indian Rupee 4.33
Indonesian Rupiah (100) 2.19
Israeli shekel 76.63
Japanese yen (100) 251.26
Malaysian Ringgit 65.77
Mexican peso 14.26
New Romanian lei 68.34
New Zealand dollar 204.24
Norwegian kroner 34.17
Philippine Peso 5.93
Polish zloty 70.05
Pound sterling 363.69
Russian ruble 4.79
Serb dinar 2.51
Singapore dollar 203.49
South African rand 21.45
South-Korean won (100) 24.43
Swedish krona 32.43
Swiss franc 288.79
Thai baht 8.24
Turkish lira 83.37
Ukrainian hryvna 10.89
USA dollar 295.06

Photo: Daily News Hungary

The National Bank of Hungary: Hungary prepared for Brexit effects

Budapest, June 24 (MTI) – The National Bank of Hungary (NBH) has prepared for both outcomes of the British vote on European Union membership, NBH managing director Dániel Palotai told MTI on Friday after UK voters decided to leave to bloc at a referendum.

“We continuously monitor the reactions of financial markets,” Palotai said on the sidelines of a conference. “We have all the necessary tools to ensure financial stability,” he said. Economy Minister Mihaly Varga said earlier in June that the UK’s exit from the EU could slow Hungary’s GDP growth rate by 0.3-0.4 percentage points.

The Hungarian Banking Association said that the bank sector has already started developing emergency action plans before the referendum and banks will now analyse the long-term effects and strive for a managed transition. “On behalf of the bank sector, we can assure private clients and companies that banking services will continue as usual,” it said in a statement.

An expert told public news channel M1 on Friday morning that “earthshattering changes” were ahead in wake of the leave vote, with a level of uncertainty similar to “diving head on into darkness”. Zoltán Galik, a professor at Corvinus University, said early elections would soon be called in the UK, to be potentially followed by a Scottish or even a Northern Irish referendum on leaving the UK. The British referendum is a warning for European elites that a small party such as UKIP was able to win the vote with “a campaign based on emotional topics such as immigration and the promise of old-style sovereignty,” he said.

A state secretary at the economy ministry said the changes will affect Hungary, Europe and the whole world and banking and corporate sectors will both have to “go through renewal”.

Reuters reported early Friday morning that according to nearly complete results 51.8 percent of UK voters backed leaving the EU while 48.2 percent voted to remain.

Photo: MTI/EPA/Ennio Leanza

Hungarian economy minister opens London Stock Exchange to mark listing of yuan bond

Budapest, May 12 (MTI) – Economy Minister Mihály Varga ceremoniously opened the market on the London Stock Exchange on Thursday, marking the listing of a RMB 1 billion yuan bond Hungary recently issued.

The issue of the bond has “symbolic significance”, as it is not very big, but sends the important message that China must be reckoned with in the long term, too, Varga told MTI after the ceremony.

Hungary issued the three-year dim sum bond in mid-April.

Varga said that, unlike earlier, Hungarian bonds are attracting investors who plan to hold on to the securities for the long term. Especially favourable is the fact that among the institutional investors are pension funds, he added.

Varga said investors in continental Europe and the UK had subscribed the yuan bond.

Asked whether Hungary planned to issue a yuan bond targeted at investors on the Chinese market, Varga said that the Bank of China, its partner in the dim sum issue, had recommended a possible panda bond issue. The general opinion is that panda bonds promise lower yields and would be a cheaper market for Hungary to tap, he added.

“We’ll think about it. The Bank of China is a reliable partner on the Chinese market: whether or not such an issue would take place this year depends on what they say and their opinion,” he said.

Asked whether the government expects Hungary to be bumped up to investment grade, Varga said Hungary’s real ratings agency is the market, and requests for further issues are coming from big trading houses one after the other. In this environment, the assessments of ratings agencies are secondary, but “we’re rooting for them to follow the market opinion”, he added.

London Stock Exchange group CEO Nikhil Rathi said after the ceremony on Thursday that the yuan bond was the biggest one listed on the bourse this year.

Photo: https://www.facebook.com/Varga-Mih%C3%A1ly-324771568775/

NBH acquires majority stake in Budapest Stock Exchange

Budapest, November 24 (MTI) – The National Bank of Hungary (NBH) has acquired a majority stake in the Budapest Stock Exchange (BSE), the central bank announced on Tuesday.

The NBH concluded the related contract with CEESEG, a unit of the Vienna Stock Exchange, and the Osterreichische Kontrollbank, which together used to hold 68.8 percent of BSE’s shares.

The central bank already held 6.95 percent of the shares. The transaction will increase its stake in the Budapest bourse to 75.75 percent.

The NBH said they paid 3,550 forints per share or 13.2 billion forints (EUR 42.4m) for the whole packet, confirming the price named by the online news portal Napi.hu which reported the deal earlier.

The price was based on the evaluation of an internationally respected advisor, and it reflects the nearly 47 percent stake the Budapest Stock Exchange holds in the Hungarian central clearing house and depository Keler, too.

As the agreement is subject to approval by the Economic Competition Office, the transaction is expected to be concluded by mid-December this year.

BUX third-best performing shares index globally in H1

Daily News Hungary

Budapest, July 2 (MTI) – The Budapest Stock Exchange’s main BUX index gained almost 32 percent in the first half of this year, making it the third-best performing gauge of share price in the world, business daily Vilaggazdasag said on Thursday.

Only stock exchanges in Venezuela and Argentina outperformed the BUX, the paper said.

Among the Budapest bourse’s four blue chips, OTP Bank gained almost 50 percent during the period, while oil and gas company MOL climbed 25 percent and Richter rose 20 percent.

Richter Publicly Traded For 20 Years – a Hungarian Success Story

The shares of Gedeon Richter Plc. were admitted to trading at the Budapest Stock Exchange 20 years ago. In the two decades since then, the price of the company’s shares has showed a 28-fold increase, while Richter has become the third highest-turnover security of the Hungarian stock market. The last twenty years of Richter is a true success story both for stock exchange investors and the Hungarian economy: the pharmaceutical company’s sales revenue has grown more than 15-fold, its profit-after-tax 10-fold, and the number of employees 2.5-fold since listing.

Two decades ago, on 9 November 1994, the shares of Gedeon Richter Plc. were admitted to trading at Budapest Stock Exchange at a listing price of HUF 1,330 (corresponds to HUF 133 at current price after split). Established in 1901, Richter has gone a long way both on the stock exchange and in the pharmaceutical industry. Since flotation, the company’s securities have become the third highest-weighting share of the BUX Index; Richter’s market capitalisation amounts to HUF 695 billion at current share price. Since its listing, the share price has grown 28-fold and the company paid dividend in the amount of approximately HUF 162 billion on its ordinary shares. Since listing, more than 400 million Richter shares have been traded in approximately 2.2 million deals in the amount of approximately HUF 6,621 billion.

A key moment in Richter’s stock exchange history was when the management approved a 10-for-1 stock split in the summer of 2013 (nominal value dropped from HUF 1,000 to HUF 100, thus each investor received 10 shares instead of 1). This measure had a positive effect on the turnover of Richter shares and, according to the analysts, also gave a boost to share price. Since flotation, Richter has been listed in Budapest Stock Exchange’s highest share category, since 2013, the Premium Market.

Richter has proved to be a true success story for institutional and private stock exchange investors alike, as well as for the Hungarian economy: Richter has become the largest domestic pharmaceutical manufacturer and a major multinational corporate group. Since 1994, its sales revenue has increased 16-fold (HUF 351 billion in 2013), its profit-after-tax 10-fold (HUF 42.4 billion in 2013) and its dividend per share 9.5-fold (HUF 57). There has also been a significant boost in the number of Richter’s employees: in 2013 the company had approximately 12 thousand employees in comparison to 4.5 thousand in 1994.

‘It was a good decision that privatization was performed in 1994 by going public with Richter. This way the two most important criteria: transparency and raising capital have been met at once. For our company, stock exchange presence made it clear that the primary duty of our management and all the employees is increasing shareholder value, a constant improvement of performance and, again, transparency. It’s good to know that with our performance we earned our shareholders’ trust and the company’s headquarters remained in Hungary. We are also proud of our substantial contribution to national economy. We’ll make all efforts to meet our investors’ reasonable expectations and enhance the prestige of the Budapest Stock Exchange in the future. I hope that the number of Hungarian investors will gradually increase,’ said Erik Bogsch, CEO of Gedeon Richter Plc. on occasion of the 20-year anniversary.

’Richter’s success in the last two decades has been a highly positive example for the entire Hungarian capital market. The company is not only a gem of the Hungarian economy and stock exchange, but a key international player as well. I trust that the company will remain an example to Hungarian enterprises to follow in the future. On behalf of Budapest Stock Exchange, I wish the company many more successful decades and satisfied investors,’ said Zsolt Katona, CEO of Budapest Stock Exchange.

– press release – 

OTP Drops in Longest Losing Streak in 11 Months

Bloomberg said, OTP Bank Nyrt., Hungary’s largest lender, fell for a sixth day as the government proposed a plan that allows customers to withdraw a limited amount of cash without paying a transaction tax, forcing banks to take the hit.

The stock slid 1.1 percent to 4,189 forint by 2:08 p.m. in Budapest, extending declines to the longest stretch of losses since November. About 520,000 shares changed hands, or 45 percent of the three-month daily average. The benchmark BUX index (BUX), in which OTP has the second-biggest weighting at 29.4 percent, slipped 0.5 percent.

Bloomeberg according, lawmakers from Hungary’s ruling Fidesz party have suggested banks offer two free cash withdrawals in a month, making lenders swallow a 0.6 percent tax that would still be payable to the government. The step will further burden the banks that already pay the highest industry levy in the European Union.