April 26, 2019 / 10:16 AM / a month ago

CEE MARKETS-Oil sector shares extend losses as Russian supply problem persists

    * Polish and Hungarian oil companies decline
    * Analysts cite technical factors and crude prices
    * Tainted Russian crude causes supply disruption in region
    * Czech crown firms on expected interest rate hike

    By Sandor Peto
    BUDAPEST, April 26 (Reuters) - Central European oil sector
shares extended losses on Friday as crude prices retreated and
Russia prepared for talks with buyers who suspended the imports
of its oil.
    Poland, Germany, Ukraine and Slovakia have suspended imports
of Russian oil via the Druzhba pipeline over quality concerns.

    Shares in Polish refiners PKN Orlen and Lotos
 fell 1 percent and 0.7 percent respectively by 0933
GMT while Warsaw's blue-chip index lost 0.1 percent.
    PKN, Poland's biggest refiner, has shed almost 2 percent in
the past two sessions despite reporting higher than expected
first-quarter earnings on Thursday.
    It said the flow of Russian oil could resume in one or two
weeks and that it had no plans to tap strategic reserves.

    Analysts said the fall in the stock towards its lowest level
in a month is unlikely to be because of the Russian supply
problem.
    The shares traded slightly below their 200-day moving
average while Budapest-based rival MOL was almost 10
percent above its own average despite a retreat from 12-year
highs in the past two days.
    A surge in crude prices this year has eaten into refinery
margins, which has hit PKN, while MOL's much bigger upstream
business means it is helped by the higher crude prices, analysts
said.
    "MOL's share price is in a correction after a strong rise,"
said Zsolt Bosnyak, analyst at Equilor Brokerage in Budapest.
    Oil prices dipped on Friday, which also fuelled a retreat in
MOL's price before likely further gains, analysts said, but
crude was still on course for its longest run of weekly gains in
years, weighing on PKN.
    "Investors may not assess (PKN's) earnings report with
optimism," Erste analyst Tamas Pletser said.
    In Central Europe's debt markets, Polish government bond
prices regained the ground lost after disappointing demand at
Thursday's primary auction, with the yield on 10-year paper
 dropping 3 basis points to 2.892 percent.
    The Czech crown firmed 0.2 percent to 25.705
versus the euro amid some expectations that the Czech central
bank will continue to increase interest rates at its meeting on
May 2.
    The Hungarian central bank is expected to keep interest
rates on hold at its meeting on April 30.
    The forint was steady at 322.1 against the euro,
near the 3-and-1/2-month lows set on Thursday at 322.75.  
    
            CEE       SNAPSHOT   AT                         
            MARKETS             1133 CET            
                      CURRENCI                              
                      ES                            
                      Latest    Previous  Daily     Change
                      bid       close     change    in 2019
 Czech      <EURCZK=   25.7050   25.7450    +0.16%    +0.01%
 crown      >                                       
 Hungary    <EURHUF=  322.1000  322.2000    +0.03%    -0.32%
 forint     >                                       
 Polish     <EURPLN=    4.2897    4.2902    +0.01%    -0.00%
 zloty      >                                       
 Romanian   <EURRON=    4.7590    4.7573    -0.04%    -2.21%
 leu        >                                       
 Croatian   <EURHRK=    7.4160    7.4175    +0.02%    -0.08%
 kuna       >                                       
 Serbian    <EURRSD=  117.8600  118.0000    +0.12%    +0.37%
 dinar      >                                       
 Note:      calculated from               1800 CET          
 daily                                              
 change                                             
                                                            
                      Latest    Previous  Daily     Change
                                close     change    in 2019
 Prague                1090.02  1085.620    +0.41%   +10.49%
                                       0            
 Budapest             42919.78  43053.87    -0.31%    +9.66%
 Warsaw                2357.11   2358.76    -0.07%    +3.54%
 Bucharest             8416.03   8416.03    +0.00%   +13.98%
 Ljubljana  <.SBITOP    887.28    884.85    +0.27%   +10.32%
            >                                       
 Zagreb                1816.08   1813.34    +0.15%    +3.85%
 Belgrade   <.BELEX1    746.26    746.26    +0.00%    -2.03%
            5>                                      
 Sofia                  573.77    573.77    +0.00%    -3.48%
                      BONDS                                 
                      Yield     Yield     Spread    Daily
                      (bid)     change    vs Bund   change
                                                    in
 Czech                                              spread
 Republic                                           
   2-year   <CZ2YT=R    1.5690   -0.1740   +218bps    -17bps
            R>                                      
   5-year   <CZ5YT=R    1.7200    0.0060   +216bps     +1bps
            R>                                      
   10-year  <CZ10YT=    1.8080   -0.0380   +183bps     -3bps
            RR>                                     
 Poland                                                     
   2-year   <PL2YT=R    1.6120   -0.1090   +223bps    -11bps
            R>                                      
   5-year   <PL5YT=R    2.2430   -0.0130   +268bps     -1bps
            R>                                      
   10-year  <PL10YT=    2.9120   -0.0180   +293bps     -1bps
            RR>                                     
            FORWARD   RATE      AGREEMEN                    
                                T                   
                      3x6       6x9       9x12      3M
                                                    interban
                                                    k
 Czech Rep                2.23      2.24      2.26      2.02
            <PRIBOR=                                
            >                                       
 Hungary                  0.30      0.44      0.61      0.16
                                                    
 Poland                   1.75      1.76      1.77      1.72
                                                    
 Note: FRA  are for ask prices                              
 quotes                                             
 *************************************************          
 *************                                      
 
 (Reporting by Sandor Peto
Editing by David Goodman)
  
 
 
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