(Updates with closing prices in second paragraph.)
Feb. 17 (Bloomberg) -- Magyar Telekom Nyrt., Hungary’s former phone monopoly, rose the most in almost two years as a drop in government bond yields made the company’s dividend more attractive to investors, according to Concorde Ertekpapir Zrt.
The shares rose 5.5 percent to 573 forint, the biggest advance since May 2010 and the highest closing level since July by the end of trading in Budapest. Gains in Hungary’s government notes maturing in 2017 cut the yield five basis points today to 8.42 percent, compared with 10.844 percent on Jan. 4.
Hungary’s bonds and the forint have rallied since Prime Minister Viktor Orban said on Jan. 5 he was ready to discuss steps needed to obtain a “quick” international bailout. Magyar Telekom, which is often sought for its dividends, benefits as bond yields become less attractive in comparison, said Attila Gyurcsik, an analyst at broker Concorde.
“Magyar Telekom is a yield-sensitive stock,” Gyurcsik said in a telephone interview from Budapest today. “The shares have missed out on the recent rally in bonds and it is now catching up.”
The prospect of a bailout deal with the International Monetary Fund and the European Union may help cut yields further, Gyurcsik added.
--Editors: Linda Shen, James Kraus
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