OTP Bank Nyrt. (OTP), Hungary’s largest lender, fell the most in more than two weeks after Prime Minister Viktor Orban’s spokesman said European Union finance ministers will approve a proposal to cut Hungary’s development subsidies.
The shares fell 2.3 percent to 3,941 forint by the close in Budapest, the biggest decline since Feb. 16. The benchmark BUX stock index dropped 1.6 percent.
Hungary, which has been struggling to start talks on a bailout from the EU and the International Monetary Fund since last year, also faces the loss of subsidies as a sanction for exceeding European budget deficit limits. EU ministers will approve the cut in the so-called cohesion funds in “all certainty”, Orban’s spokesman, Peter Szijjarto, told TV2 today.
“It is increasingly obvious that the deal between the government and the IMF will be delayed,” Zoltan Arokszallasi, an analyst at Erste Group Bank AG, wrote in a research report today.
European stocks dropped, snapping two days of gains, as China cut its economic growth forecast and data showed manufacturing and services in the euro area shrank more than estimated.
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