Top court ruling on Quaestor may prove positive for rating, says City
London (MTI) – The Constitutional Court’s ruling on the Quaestor scandal may help Hungary’s sovereign ratings to return to investment grade, London-based emerging markets analysts said on Wednesday.
In its daily emerging markets update, released to clients in London, BofA Merrill Lynch Global Research, the London-based research unit of Bank of America-Merrill Lynch, said the ruling which declared legislation forcing financial institutions to take part in covering the compensation costs for investors of the failed brokerage unlawful “could help arguments for a positive rating”.
The report says the legislation had led to strong criticism from local banks, as “it went against the spirit” of the memorandum of understanding (MoU) signed between them, the EBRD and the government. Rating agencies view the MoU implementation as proof of ruling Fidesz’ commitment to normalise the relationship with banks, a strong precondition for a rating upgrade.
Fitch is due to publish its review of Hungary’s ratings on Friday, with a positive outlook. “The (…) timing is close but we expect a return to investment grade,” Bank of America-Merrill Lynch’s London-based analysts said.
Source: http://mtva.hu/hu/hungary-matters
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