December 20, 2017 / 10:55 AM / 6 months ago

CEE MARKETS-Prague stocks set 6-year high, zloty shrugs off EU threat

    * Prague stocks lead regional rise, set 6-year high
    * Brussels may propose Poland should lose EU voting rights
    * Polish assets shrug off Brussels threat, economy is robust
    * Romanian lawmakers seen passing rest of courts reform, leu
eases

    By Sandor Peto and Radu-Sorin Marinas
    BUDAPEST/BUCHAREST, Dec 20 (Reuters) - Prague led Central
European stock exchanges higher on Wednesday, with its main
index setting a six-year high, after the U.S. Senate passed a
sweeping tax reform.
    Expectations for tax stimulus in the world's biggest economy
have buoyed stock prices in the European Union's fast-growing
emerging markets in the past weeks.
    The region's bourses did not track a pullback from record
highs in Wall Street, which also made German stocks
retreat.
    "But you can feel the uncertainty," said Jozsef Miro,
strategist of Erste.
    "In the past, (European and U.S.) stock markets had their
own ways. Germany starting to correlate with Wall Street may not
be a good sign," he added.
    Regional equities still extended their gains on Wednesday.
    Prague's main index set a 6-year high, and gained more
than half a percent by 1011 GMT. Budapest and Bucharest
 were at their highest level since Nov. 29.
    Prague has been partly buoyed by gains of state-controlled
energy group CEZ as wholesale power prices have risen.
With 17 percent rise so far this year, Prague is still behind
Warsaw and Budapest, which have gained 27 and 21 percent,
respectively. 
    Currencies were mixed against the euro. The forint
and the leu shed, the Czech crown and the
zloty gained 0.1 percent.
    Polish markets shrugged off the risk that the European Union
may activate proceedings against Poland on Wednesday, bringing
it closer to losing its voting rights in the bloc, due to
accusations that Warsaw has weakened the rule of law.

    However, it is very difficult to bring the unprecedented
proceeding, which would punish Polish legislation including a
judiciary reform, to the end. That would require unanimous
consent from other EU members. 
    "Even though the political storm is likely to continue, we
expect the zloty to appreciate in the medium term due to robust
economic growth, a tight labour market and increasing inflation,
which are likely to affect the MPC's (central bank)  position
next year," Nordea analyst Natalia Kornela Setlak said.
    "Interest rate normalisation (rise) is approaching and we
expect to see the first hike in late 2018," she said in a note.
    Hungary weakened its own constitutional court already years
ago. An ongoing judicial reform is also a worry in Romania where
it is seen hindering efforts to fight corruption. 
    Lawmakers passed part of the reform on Tuesday and are
expected to approve the rest late on Wednesday.
    The political risk may lead to some leu weakening, ING
analysts said in a note. 
    
               CEE MARKETS  SNAPSH   AT  1111 CET         
                            OT                      
                            CURRENCIES                    
                            Latest  Previo  Daily   Change
                                    us              
                            bid     close   change  in
                                                    2017
 Czech crown                25.670  25.693   +0.09   5.21%
                                 0       0       %  
 Hungary                    313.18  312.88  -0.09%  -1.39%
 forint                         00      50          
 Polish zloty               4.1983  4.1999   +0.04   4.90%
                                                 %  
 Romanian leu               4.6250  4.6197  -0.11%  -1.95%
 Croatian                   7.5460  7.5443  -0.02%   0.12%
 kuna                                               
 Serbian                    119.20  119.00  -0.17%   3.48%
 dinar                          00      00          
 Note: daily   calculated   previo  close   1800          
 change        from         us      at      CET     
                            STOCKS                        
                            Latest  Previo  Daily   Change
                                    us              
                                    close   change  in
                                                    2017
 Prague                     1077.0  1071.2   +0.54   +16.8
                                 2       4       %      6%
 Budapest                   38855.  38807.   +0.13   +21.4
                                85      09       %      1%
 Warsaw                     2467.1  2455.9   +0.45   +26.6
                                 0       9       %      5%
 Bucharest                  7789.0  7769.4   +0.25   +9.94
                                 6       4       %       %
 Ljubljana                  790.61  786.71   +0.50   +10.1
                                                 %      8%
 Zagreb                     1846.6  1845.0   +0.09  -7.43%
                                 7       8       %  
 Belgrade                   750.33  750.27   +0.01   +4.59
                                                 %       %
 Sofia                      662.37  662.80  -0.06%   +12.9
                                                        5%
                            BONDS                         
                            Yield   Yield   Spread  Daily
                            (bid)   change  vs      change
                                            Bund    in
 Czech                                              spread
 Republic                                           
   2-year                    0.526   0.186   +120b   +17bp
                                                ps       s
   5-year                    0.792   0.064   +106b   +5bps
                                                ps  
   10-year                   1.462   0.005   +109b   +1bps
                                                ps  
 Poland                                                   
   2-year                    1.744  -0.022   +242b   -4bps
                                                ps  
   5-year                    2.661  -0.026   +293b   -4bps
                                                ps  
   10-year                   3.331   0.024   +296b   +2bps
                                                ps  
               FORWARD      RATE    AGREEMENT             
                            3x6     6x9     9x12    3M
                                                    interb
                                                    ank
 Czech Rep             <PR    1.04    1.24    1.38       0
               IBOR=>                               
 Hungary               <BU    0.03    0.13    0.19    0.03
               BOR=>                                
 Poland                <WI   1.761   1.815   1.915    1.72
               BOR=>                                
 Note: FRA     are for ask                                
 quotes        prices                               
 *********************************************************
 *****
 
 (Additional reporting by Jason Hovet in Prague)
  
 
 
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below