OTP Bank Nyrt. (OTP), Hungary’s largest lender, jumped to a 13-month high on bets the government is adapting its policies to meet demands by international lenders and as bank shares led advances in emerging-market stocks.
OTP’s shares rose 3.6 percent to 4,324 forint by 3:19 p.m. in Budapest, the highest since Aug. 30, 2011, and extending this month’s rally to 11 percent. The volume of shares traded was 208 percent of the stock’s three-month daily average. The benchmark BUX stock index advanced 1.5 percent and the MSCI Emerging Markets Index rose 0.3 percent, led by a 1 percent jump in financial companies.
Hungary last week scrapped a plan to tax financial transactions at the central bank, removing a potential obstacle to aid talks with the International Monetary Fund. Prime Minister Viktor Orban expects a turnaround for Hungary’s economy next year, he told reporters in Berlin today.
“Hungary’s economic policy is starting to be more suitable for the IMF, which is diminishing political risk,” Peter Varju, a Budapest-based equities trader at Erste Group Bank AG, said by telephone today. “The overall economic picture is still bad but it seems to be closer to a turnaround.”
The cost of insuring against default on Hungary’s debt with credit-default swaps fell 21 basis points to 307, the lowest in 14 months.
“There’s been a fall in the risk premium which was priced in” to OTP’s share price, Erste’s Varju said.
Emerging-market stocks snapped a three-day decline today as higher commodity prices boosted producers and a unit of China’s sovereign wealth fund vowed to support banking shares, offsetting concern a downgrade of Spain’s debt will exacerbate the credit crisis.
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