Bloomberg News

OTP Drops to Week Low as Hungary Faces Malev Closure Costs

February 09, 2012

(Updates with closing prices in second paragraph.)

Feb. 9 (Bloomberg) -- OTP Bank Nyrt., Hungary’s largest lender, dropped to the lowest in more than a week on concern the liquidation of a state-owned airline will widen the government’s deficit, damping demand for the country’s stocks.

The shares fell 1.8 percent to 4,060 forint. The benchmark BUX stock index, in which OTP has a 29 percent weighting, declined 1.4 percent by the close in Budapest.

The government may be forced to pay “several hundred billion forint” to Budapest Airport in compensation as it moves to wind up carrier Malev Zrt., the Development Ministry said in an e-mailed response to questions late yesterday.

“There is some uncertainty regarding the Budapest Airport case,” Zoltan Reczey, an analyst at Buda-Cash Brokerhaz Zrt., said in a telephone interview today. “There is a risk the potential budget expenditure will be significant,” which may explain the “underperformance” of OTP’s stock, he said.

--Editors: Linda Shen, Robert Valpuesta

To contact the reporter on this story: Andras Gergely in Budapest at agergely@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net


American Apparel's Future
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus